1. YULO v. YANG CHIAO SENG by its charter." (Wyoming-Indiana Oil Gas Co. vs. Weston, 80 A. L. R.
by its charter." (Wyoming-Indiana Oil Gas Co. vs. Weston, 80 A. L. R., 1043, citing 2. Fletcher Cyc. of Corp.,
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) the 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, or if the owner
constructs a permanent building, or Yulo’s right of lease is terminated by the owner, then the partnership shall
be terminated even if the 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 the partnership
shall belong to Yulo but if partnership is terminated before the lapse of 1 and ½ years under any of the causes
under par. (2), Yang shall have the right to remove all improvements that the parties may place in the premises.
The 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 the 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 an indefinite
period. Owners brought their own civil action for ejectment upon Yulo and Yang.
CFI: Two cases were heard jointly; Complaint of Yulo and Yang dismissed declaring contract of lease
terminated.
CA: Affirmed the judgment.
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 the 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 Mrs. Yulo is entitled to the share in the profits of the partnership?
Held:
No.The original letter of the defendant expressly states that the agreement between the plaintiff and the
defendant was to end upon the termination of the right of the plaintiff to the lease. Plaintiff’s right having
terminated in July 1949, the partnership agreement or the agreement for her to receive a participation
of P3,000.00 automatically ceased as of said date.
2. TUASON v. BOLANOS
Facts:
Plaintiff’s complaint against defendant was to recover possession of a registered land. In the complaint, the
plaintiff is represented by its Managing Partner, Gregorio Araneta, Inc., another corporation. Defendant, in his
answer, sets up prescription and title in himself through "open, continuous, exclusive and public and notorious
possession under claim of ownership, adverse to the entire world by defendant and his predecessors in
interest" from "time immemorial". After trial, the lower court rendered judgment for plaintiff, declaring defendant
to be without any right to the land in question and ordering him to restore possession thereof to plaintiff and to
pay the latter a monthly rent. Defendant appealed directly to the Supreme Court and contended, among others,
that Gregorio Araneta, Inc. cannot act as managing partner for plaintiff on the theory that it is illegal for two
corporations to enter into a partnership
Issue: Whether or not a corporation may enter into a joint venture with another corporation?
Held:
Yes. It is true that the complaint states that the plaintiff is "represented herein by its Managing Partner Gregorio
Araneta, Inc.", another corporation, but there is nothing against one corporation being represented by another
person, natural or juridical, in a suit in court. The contention that Gregorio Araneta, Inc. cannot act as managing
partner for plaintiff on the theory that it is illegal for two corporations to enter into a partnership is without merit,
for the true rule is that "though a corporation has no power to enter into a partnership, it may nevertheless
enter into a joint venture with another where the nature of that venture is in line with the business authorized
1082.). There is nothing in the record to indicate that the venture in which plaintiff is represented by Gregorio
Araneta, Inc. as "its managing partner" is not in line with the corporate business of either of them.
3. VILLAREAL v. RAMIREZ
Facts:
In 1984, Villareal, Carmelito Jose and Jesus Jose, formed a partnership for the purpose of operating a
restaurant. Each contributed P250,000.00. In 1984, Ramirez was added as a partner after he contributed
P250,000.00. In 1987, Jesus withdrew from the partnership and his capital share of P250k was returned to
him as agreed upon by the other partners.
Thereafter, the restaurant suffered losses. Without informing Ramirez, Villareal and Carmelito shut down the
restaurant. They then turned over the restaurant equipments to Ramirez. Later, Ramirez sent a letter to
Villareal and Carmelito telling them he’s no longer interested in being a partner and that he’s demanding his
shares in the partnership. Villareal and Carmelito ignored the request
of Ramirez hence the latter sued them.
In their defense, Villareal and Carmelito said that the restaurant equipment served as payment to Ramirez
when they were delivered to them; that Ramirez cannot ask for share in equity because the restaurant incurred
debts (P240,658.00) and irreversible business losses. Ramirez argued by saying that the equipments were
merely placed in their house for storage as the two partners allegedly searched for a better restaurant location;
that he was not aware of any losses or any indebtedness because he never took part in the management of
the restaurant.
The trial court ruled in favor of Ramirez. The Court of Appeals affirmed the trial court and it further ordered
Villareal and Carmelito to pay Ramirez P253,114.00. The computation was done as follows:
(Original Partnership Capital – Partnership Debt = Partnership Asset) ÷ Number of partners; hence:
(P1,000,000.00 – P240,658.00 = P759,342.00) ÷ 3 = P253,114.00.
Issue: Whether or not the Court of Appeals is correct?
Held: No. It is impossible that the said P1,000,000.00 original capital did not fluctuate. It could not have
remained stagnant. Further, the Court of Appeals missed to note that one partner left and his contribution was
returned (Jesus Jose). Generally, in the pursuit of a partnership business, its capital is either increased by
profits earned or decreased by losses sustained. It does not remain static and unaffected by the changing
fortunes of the business.
The Supreme Court also noted that Ramirez cannot demand his equity shares from Villareal and Carmelito –
because it should be the partnership – the partners and the partnership has a separate and distinct personality.
In determining Ramirez’ share in the equity, losses must be accounted for. He cannot ask for an amount
equivalent to his capital contribution especially in this case where the partnership incurred debts and losses.
At any rate, Ramirez’ share is 1/3 of whatever assets the partnership still has after debts and losses are
deducted. Hence, there is a need for a proper proceeding for the accounting, liquidation, and distribution of
the remaining partnership assets. A share in a partnership can be returned only after the completion of
the latter’s dissolution, liquidation and winding up of the business.
4. ABONG v. WCC
Facts:
Aladino Dionson, Filomeno Umbria, Noel Lahao-lahao, Juanita Monteroyo and Wilfredo Monteroyo and
Demetrio Escoreal, all decent were members of a fishing outfit, the "IWAG" or more popularly called the
"ALEX", owned by petitioner herein, Dr. Agustino R. Abong.
On May 15, 1966, this fishing outfit set out to sea somewhat off the coast of Northern Negros. The decedents
were among the 70 crew members who were loaded on two big bancas, 8 small fishing boats locally known
as "lawagan" and one towing motorboat. While they were, thus, fishing, typhoon "IRMA" passed along their
way, scattering the boats and blowing them far out into the open sea. The tragedy netted eight (8) dead while
some sixty (60) men survived the disaster.
As a consequence of the incident, claims for death compensation were filed with the Bacolod Sub-Regional
Office against Dr. Abong, the decedents’ employer, since their deaths arose out of and in the course of their
employment as "washing" or helpers and light tenders of the latter.
After due hearing before Acting Referee, Bertito D. Dadivas, Dr. Abong was then ordered to pay compensation
to claimants by virtue of the WCC. Said decision was affirmed by Associate (Medical) Commissioner Herminia
Castelo-Sotto, M.D., of the Workmen Compensation Commission. Aggrieved, Dr. Abong filed this present
petition seeking the reversal of the adverse decision against him contending that he was not the employer of
the decedents because of an alleged partnership agreement between him and a certain Simplicio Panganiban,
the former being the “Financier” and the latter as his “Team leader.”
Issue: Whether or not Dr. Abong is not liable for the claims by virtue of the partnership agreement between
him and Panganiban thus binding the decedents?
Held:
No. We are inclined to agree with the proposition, advanced by the claimant's counsel that there existed an
employer-employee relationship between the respondent and the decedents. Not only that the said deceased
workers worked for and in the interest of the business of the herein respondent. But that they were subject to
the control, supervision, and dismissal of the respondent, through its agent, Simplicio Panganiban, the alleged
"partner" of herein respondent. The intervention of Simplicio Panganiban, in this case, is merely that of an
agent or intermediary between the owner of the fishing boat and the members of its crew. In short, Panganiban
is merely the person charged by Dr. Abong to recruit the said fishermen to work for and for the enforcement
of the business venture of herein respondent.
The said contract of partnership while it may be considered as valid and lawful, between the signatories
thereto, the respondent Dr. Abong and his "partner" or agent, Simplicio Panganiban, nowhere in that said
agreement did the decedents or their heirs in interests take any participation or manifested their conformity to
the said covenant. Thus, even if we consider this contract as valid and enforceable between them, it cannot
bind the non-signatories thereto, like the deceased fishermen.
The appellants refer to article 1666 of the Civil Code, which provides: A partnership must have a lawful object,
and must be established for the common benefit of the partners. When the dissolution of an unlawful
partnership is decreed, the profits shall be given to charitable institutions of the domicile of the partnership, or,
in default of such, to those of the province.
Issue: Whether or not the charitable institutions are considered as necessary parties for the total disposition
of this case?
Held:
No. The partnership is an unlawful partnership. According to paragraph 2 of Article 1666 of the Civil Code,
when an unlawful partnership is judicially dissolved, the earnings shall not be disposed of as profits, but shall
be given to charitable institutions. But in a case like the one at bar, whose object is to determine the rights of
the parties, and to liquidate the unlawful partnership, no charitable institution should be included as a
defendant, as the appellants content, because it is not a necessary party to the case.
Art. 1666 of the Civil Code allows no action for the purpose of obtaining the earnings made by the unlawful
partnership, during its existence, as a result of the business in which it was engaged; because for that purpose
the partner will have to base his action on the partnership contract which is null and without legal existence by
reason of its unlawful object, and it is self-evident that what does not exist cannot be a cause of action. Hence,
paragraph 2 of the same article provides that when the dissolution of the unlawful partnership is decreed, the
profits cannot inure to the benefit of the partners, but must be given to some charitable institution.The
profits are so applied, and not the contributions, because this would be an excessive and unjust sanction for,
as we have seen, there is no reason, in such a case, for depriving the partner of the portion of the capital that
he contributed, the circumstances of the two cases being entirely different.
Art. 1807. Every partner must account to the partnership for any benefit, and hold as trustee for it any profits
derived by him without the consent of the other partners from any transaction connected with the formation,
conduct, or liquidation of the partnership or from any use by him of its property.

Furthermore, even if Panganiban will be considered as an independent contractor, which he is not, his position
as such will not relieve the employer, respondent Abong, from his liability under the Act. It is well-defined in
the Act, that an employer includes every person or association of persons, incorporated or not, public or
private, and the legal representatives of the deceased employer. It includes the owner or manager of the
business carried on in the establishment or place of work but who, for the reason that there is an independent
contractor in the same, or for any other reason, is not the direct employer of laborers employed there. (Section
39, paragraph[s], Workmen's Compensation Act, as amended).

5. ARBES v. POLISTICO

Facts:
Arbes et al. (plaintiffs) were members or shareholders of Turnuhan Polistico and Polistico et al. (defendants)
were directors, president-treasurer and secretary of the association. This case has been brought for the
second time to the SC. The first one was when the same plaintiffs appeared from the order of the court below
sustaining the defendant's demurrer, and requiring the former to amend their complaint within a period, so as
to include all the members of "Turnuhan Polistico & Co.," either as plaintiffs or as defendants. This court held
then that in an action against the officers of a voluntary association to wind up its affairs and enforce an
accounting for money and property in their possessions, it is not necessary that all members of the association
be made parties to the action. (Borlasa vs. Polistico, 47 Phil., 345.) Quintos, of the Insular Auditor's Office,
was appointed to examine all the books, documents, and accounts of "Turnuhan Polistico & Co.," and to
receive whatever evidence the parties might desire to present. Polistico et al objected to the
commissioner's report.

The RTC, however, held that the association "Turnuhan Polistico & Co." is unlawful, and sentenced the
defendants jointly and severally to return the amount of P24,607.80, as well as the documents
showing the uncollected credits of the association, to Arbes, et al in and to the rest of the members of the
said association represented by said plaintiffs. Polistico et al contend that because "Turnuhan
Polistico & Co.," is unlawful, some charitable institution to whom the partnership funds may be ordered to be
turned over, should be included, as a party defendant.