Republ

i
cofthePhi
l
ippi
nes
SUPREMECOURT
Manil
a

FI
RSTDI
VISI
ON

G.
R.No.154486       December1,
2010

FEDERI
COJARANTILLA,JR.,
 Pet
it
ioner
,
vs.
ANTONIETAJARANTILLA,BUENAVENTURAREMOTIGUE,substi
tut
edbyCYNTHI
AREMOTI
GUE,
DOROTEOJARANTILLAandTOMASJARANTI LLA,
 
Respondents.

DECISION

LEONARDO- J.
DECASTRO,
  :

Thispet
it
ionforr
evi
ewon  cer
ti
orar
i1
 seekstomodifytheDeci
sion2 
oftheCourtofAppeal
sdat
ed
July30,
2002inCA-G.R.CVNo.40887, whichsetasi
detheDecision3 
dat
edDecember18,1992of
theRegi
onalTri
alCourt(
RTC)ofQuezonCi ty,
Branch98inCivi
l CaseNo.Q-50464.

Theper
ti
nentf
act
sar
easf
oll
ows:

ThespousesAndr esJaranti
ll
aandFel i
saJalecoweresurv i
vedbyeightchi
ldr
en:Federi
co,Del
fi
n,
4
Benjami n,Conchi
ta,Rosi
ta,Paci
ta,RafaelandAntoni
eta. Peti
ti
onerFederi
coJar
antil
la,Jr
.ist
he
grandchi l
dofthelat
eJar ant
il
laspousesbyt hei
rsonFeder i
coJaranti
l
la,Sr
.andhiswifeLeda
5
Jamili
.  Peti
ti
oneral
sohast woot herbrot
hers:Dor
oteoandTomasJar anti
l
la.

Petit
ionerwasoneoft hedefendantsinthecompl ai
ntbefor
et heRTCwhi leAnt
onietaJar ant
il
la,
his
aunt,wastheplainti
ffther
ein.Hisco-respondentsbefor
ehej oinedhisauntAnt
onietainher
compl ai
nt,
werehi sl
at eauntConchitaJaranti
ll
a’
shusbandBuenav entur
aRemotigue,whodi ed
duri
ngt hependencyoft hecase,hiscousinCy nt
hiaRemot i
gue, t
headopteddaughterofConchi t
a
6
Jarantil
l
aandBuenav ent
uraRemot i
gue, andhisbrother
sDor oteoandTomasJar anti
ll
a.

In1948,t
heJar antil
l
ahei rsextr
ajudici
all
ypart
it
ionedamongstthemsel
vesthereal
properti
esof
7
thei
rdeceasedpar ents.  Wit
htheexcept ionoft
her ealpr
oper
tyadj
udi
catedtoPaci
taJaranti
lla,
the
heir
salsoagreedt oallott heproduceoft hesai
dr ealpr
oper
ti
esfort
heyears1947-
1949f orthe
8
studi
esofRafael andAnt oniet
aJar ant
il
la.

Inthesamey ear,t
hespousesRosi taJaranti
l
laandVi vencioDeocampoent eredintoanagr eement
wit
ht hespousesBuenav ent
ur aRemot igueandConchi taJarant i
l
lat opr ovidemut ualassi
stancet o
eachot herbywayoff i
nancial supporttoanycommer cialandagr icul tur
alact ivi
tyonaj oi
ntbusi ness
arr
angement .Thi
sbusi nessr elat
ionshi
ppr ovedtobesuccessf ulast heywer eabl etoestablisha
manuf actur
ingandt radingbusi ness,acquir
er eal
propert i
es,andconst r
uctbui ldi
ngs,amongot her
9 10
thi
ngs.  Thi
spar t
nershipendedi n1973whent hepart
ies, i
nan" Agr eement ,"  v
oluntar
il
yagr eedt o
11
compl etel
ydissolvetheir"j
ointbusinessr el
ati
onship/
ar rangement ."

OnApri
l29,1957,thespousesBuenaventuraandConchitaRemot i
gueexecutedadocument
wher
eintheyacknowledgedthatwhil
eregist
eredonlyinBuenav entur
aRemot igue’sname,t
heywere
nott
heonlyownersoft hecapi
taloft
hebusi nessesManil
aAt hlet
icSupply(712RaonSt r
eet,Mani
l
a),
Remoti
gueTrading(Call
eReal,I
loi
loCit
y)andRemot igueTrading(CotabatoCity).I
nthi
ssame
"Acknowl
edgementofPart
ici
pati
ngCapital
,"t
heystatedt
hepar ti
cipat
ingcapi
tal
ofthei
rco-
owner
s
asoftheyear1952,wi
thAntoni
etaJaranti
l
la’
sstat
edasei ghtt housandpesos(₱8,
000.
00)and
12
Federi
coJarant
il
la,
Jr.
’
sasf i
vethousandpesos(₱5,000.
00).

13
Thepr esentcasest emsf rom t heamendedcompl aint  datedApr il22,1987f i
ledbyAnt onieta
Jaranti
llaagainstBuenav enturaRemot igue,Cy nthiaRemot igue, FedericoJar antil
la,Jr.,Dorot eo
Jaranti
llaandTomasJar antil
la,fortheaccount i
ngoft heasset sandi ncomeoft heco- owner shi p,for
i
tspar ti
tionandthedel i
ver yofhershar ecor respondi ngt oeightper cent( 8%),andf ordamages.
Antonietaclaimedt hatin1946, shehadent eredi ntoanagr eementwi thConchi t
aandBuenav ent ur
a
Remot igue,RafaelJarantil
la,andRosi taandVi vencioDeocampot oengagei nbusi ness.Ant oni eta
all
egedt hattheinit
ialcontributionofpr opertyandmoneycamef r
om t hehei r
s’ i
nher i
tance, andher
subsequentannual inv
est mentofsev enthousandf ivehundr edpesos( ₱7,500.00)asaddi ti
onal
capitalcamef rom theproceedsofherf arm.Ant oniet
aal soal l
egedt hatf rom 1946- 1969, shehad
helpedi nthemanagementoft hebusinesst heyco- ownedwi t
houtr eceivinganysal ary.Hersal ar y
wassupposedl yroll
edbacki ntothebusi nessasaddi tional investment sinherbehal f
.Antoni eta
fur
thercl ai
medco- owner shipofcer tainpropert es14 
i (
thesubj ectrealpr operti
es)i nthenameoft he
defendant ssi
ncet heonlywayt hedefendant scoul dhav epur chasedt hesepr operti
eswer et hrough
thepar t
nershipast heyhadnoot hersourceofi ncome.

15
Ther espondent s, i
ncl udi
ngpet it
ionerher ei
n,inthei
rAnswer ,  deniedhav ingformedapar t
ner ship
withAnt oni etain1946.Theycl aimedt hatshewasi nnoposi tiont odosoasshewasst i
lli
nschool
atthatt ime.I nf act,thepr oceedsoft helandst heypar ti
ti
onedwer edev otedt oherst udies.They
alsoav er redthatwhi l
eshemayhav ehel pedi nthebusi nessest hatherol dersisterConchi tahad
formedwi thBuenav enturaRemot igue, shewaspai dherduesal ary.Theydi dnotdenyt heexi stence
andv alidityoft he" Acknowl edgementofPar t
ici
patingCapi tal"andi nfactusedt hisasev i
dencet o
suppor tt heircl
ai mt hatAnt onieta’
s8%shar ewasl imi t
edt ot hebusi nessesenumer at edther ein.
Wi t
hr egar dt oAnt onieta’
scl aimi ntheirot hercorporationsandbusi nesses, t
her espondent ssai d
theseshoul dalsobel imi
tedt othenumberofhershar esasspeci f
iedint herespectivear ti
clesof
i
ncor por ation.Ther espondent sdeni edusi ngthepar tnership’si ncomet opur chaset hesubj ectr eal
16
proper t
iesandsai dthatt hecer t
ifi
cat esoft i
tl
eshoul dbebi ndi ngonher .

Duri
ngt hecour seofthetri
alattheRTC,
peti
tionerFederi
coJar anti
ll
a,Jr
.,whowasoneoft he
17
ori
ginaldefendants,ent
eredintoacompromiseagreement  wi
thAntoni
etaJarant
il
lawher
einhe
supportedAntonieta’
sclaimsandassert
edthathet oowasent i
tl
edtosixpercent(
6%)ofthe
supposedpar tnershi
pinthesamemannerasAnt oniet
awas.Hepr ayedforafavor
ablej
udgmentin
thi
swi se:

DefendantFeder i
coJar
antil
l
a,Jr.
,herebyjoi
nsinplai
nti
ff’
sprayerforanaccounti
ngfrom theother
def
endant s, andt
hepart
it
ionoftheproperti
esoftheco-ownershi
pandt hedeli
verytotheplai
nti
ff
andtodef endantFeder
icoJarant
il
la,
Jr .oft
hei
rri
ghtful
shareoft heasset
sandpr opert
iesint
heco-
18
ownership. 1avvphi
1

19
TheRTC,inanOr der  dat
edMar
ch25, 1992,
appr
ovedtheJoi
ntMotiontoAppr
oveCompr
omi
se
20
Agreement  andonDecember18,1992,deci
dedi
nfavorofAnt
oni
eta,towit
:

WHEREFORE, pr
emisesabov
e-consi
dered,
theCourtr
ender
sjudgmentinf
avorofthepl
aint
if
f
Ant
oni
etaJaranti
ll
aandagai
nstdefendant
sCynthi
aRemotigue,
Dorot
eoJarant
il
laandTomas
Jar
ant
il
laor
der i
ngthel
att
er:

1.t
odeli
vert
othepl
aint
if
fher8%shar eoritsequi
val
entamountont herealproper
ti
es
cover
edbyTCTNos.35655,338398,338399&335395, alloft
heRegist
ryofDeedsof
QuezonCi
ty;
TCTNos.(18303)23341,142882&490007( 4615)
,al
loftheRegistr
yofDeeds
 ofRizal
;andTCTNo.T-
6309oft
heRegi
str
yofDeedsofCot
abat
obasedont
hei
rpr
esent
marketvalue;

2.t
odelivert
ot heplai
nti
ffher8%shareori
tsequival
entamountont heRemot igueAgro-
I
ndustri
alCorporati
on,Manil
aAthl
eti
cSupply,
Inc.
,MASRubberPr oducts,
Inc.andBuendi
a
Recappi
ngCor porati
onbasedonthesharesofstockspresentbookv al
ue;

3.toaccountf
ort
heasset
sandincomeoft
heco-
owner
shi
panddel
i
vert
opl
aint
if
fher
ri
ghtf
ulsharet
her
eofequi
val
entt
o8%;

4.t
opaypl
aint
if
f,j
oint
lyandsev
eral
l
y,t
hesum of₱50,
000.
00asmor
aldamages;

5.t
opay
,joi
ntl
yandsev
eral
l
y,t
hesum of₱50,
000.
00asat
tor
ney
’sf
ees;
and

21
6.t
opay
,joi
ntl
yandsev
eral
l
y,t
hecost
soft
hesui
t.

Bot
ht hepet
it
ionerandt
herespondent
sappealedt
hisdeci
siontotheCourtofAppeals.The
pet
it
ionercl
aimedthatt
heRTC" er
redi
nnotrender
ingacompl et
ejudgmentandorderingthe
22
par
ti
tionoft
heco-ownershi
pandgivi
ngto[hi
m]sixpercent
um (6%)ofthepropert
ies."

WhiletheCourtofAppealsagreedtosomeoft heRTC’sfact
ualfindi
ngs,ital
soestabli
shedthat
Antoniet
aJaranti
l
lawasnotpar tofthepartnershi
pformedin1946, andthather8%shar ewas
l
imitedtothebusinessesenumeratedintheAcknowl edgementofParti
cipati
ngCapital
.OnJuly30,
2002,theCourtofAppealsrender
edt hehereinchal
lengeddeci
sionsetti
ngasidetheRTC’ sdeci
sion,
asfoll
ows:

WHEREFORE,thedecisi
onofthet
ri
alcour
t,dat
ed18December1992i
sSETASI
DEandanewonei
s
her
ebyent
eredorder
ingthat
:

(1)aft
eraccount
ing,pl
aint
if
fAnt
oniet
aJarant
il
labegi
venhershar
eof8%intheasset
sand
profi
tsofManil
aAt hl
eti
cSuppl
y,Remoti
gueTradi
nginI
loi
l
oCityandRemoti
gueTradi
ngi
n
CotabatoCit
y;

(2)af
teraccount
ing,
defendantFeder
icoJar
anti
ll
a,Jr
.begivenhi
sshar
eof6%oft
heasset
s
andprofi
tsoftheabove-
ment i
onedenter
pri
ses;
and,hol
dingthat

(3)pl
aint
if
fAntoni
etaJarantil
l
ai sastockhol
deri
nthef
oll
owi
ngcor
por
ati
onst
otheex
tent
stat
edinthei
rArti
clesofIncorporat
ion:

(
a)Rur
alBankofBar
otacNuev
o,I
nc.
;

(
b)MASRubberPr
oduct
s,I
nc.
;

(
c)Mani
l
aAt
hlet
icSuppl
y,I
nc.
;and

(
d)B.Remot
igueAgr
o-I
ndust
ri
alDev
elopmentCor
p.

23
(
4)Nocost
s.

Therespondent
s,onAugust20,
2002, fi
l
edaMoti
onf
orPar
ti
alReconsi
der
ati
onbutt
heCour
tof
Appealsdeni
edthi
sinaResolut
ion24 
dat
edMar
ch21,
2003.
Antoniet
aJarant
il
lafi
ledbeforet hi
sCour therownpet i
ti
onforrev
iewon certi
orar
i25
 dated
September16,2002,assai
li
ngt heCour tofAppeal s’deci
sionon"simi
largroundsandsi mil
ar
26
assignment
sofer r
orsasthispr esentcase"  buti
twasdismissedonNov ember20, 2002forfai
l
ure
tofi
letheappealwit
hintheregl ement ar
yper iodoff i
ft
een(15)daysinaccordancewi thSecti
on2,
27
Rule45oftheRulesofCourt.

Pet
it
ionerf
il
edbef
oreust
hispet
it
ionf
orr
evi
ewont
hesol
egr
oundt
hat
:

THEHONORABLECOURTOFAPPEALSSERIOUSLYERREDINNOTRULI NGTHATPETI
TIONER
FEDERI
COJARANTILLA,
JR.I
SENTITLEDTOASIXPERCENTUM (6%)SHAREOFTHEOWNERSHI
P
OFTHEREALPROPERTIESACQUI
REDBYTHEOTHERDEFENDANTSUSI NGCOMMONFUNDS
28
FROM THEBUSI
NESSESWHEREHEHADOWNEDSUCHSHARE.

Petit
ionerassertsthathewasi napar tnershipwiththeRemot i
guespouses,theDeocampospouses,
RositaJarantil
l
a,RafaelJar anti
ll
a,AntonietaJarant i
l
laandQui nti
nVismanos, asevidencedbyt he
Acknowl edgementofPar t
icipati
ngCapi t
al t
heRemot iguespousesexecutedin1957.Hecont ends
thatfrom thi
spar t
nership,severalothercorporationsandbusi nesseswereest abl
i
shedandsev eral
realproperti
eswer eacquired.Inthispetit
ion,hei sessential
l
yaskingforhis6%shar ei
nt hesubject
realproperti
es.Heisr el
yingont heAcknowl edgementofPar t
ici
pati
ngCapital,onhisownt esti
mony ,
andAnt onietaJaranti
ll
a’
st estimonyt osuppor tthiscontenti
on.

Thecoreissueiswhetherornott
hepart
nershi
psubj
ectoftheAcknowledgementofParti
cipati
ng
Capit
alfundedthesubjectr
ealpr
oper
ti
es.I
notherwords,
whatisthepetit
ioner
’sr
ightov
ert hese
real
properti
es?

I
tisaset
tl
edrul
ethatinapet
it
ionf
orr
evi
ewon cer
ti
orar
i 
underRul
e45oftheRul
esofCivi
l
29
Pr
ocedur
e,onl
yquesti
onsofl
awmayberaisedbyt
heparti
esandpasseduponbyt
hisCourt
.

Aquest ionofl awar i

seswhent her eisdoubtastowhatt helawi sonacer tai
nstat eoff acts, whi l
e
thereisaquest ionoff actwhent hedoubtar i
sesast othetruthorf al
sityoftheallegedf acts.Fora
questiont obeoneofl aw,thesamemustnoti nv
olveanexami nati
onoft heprobat i
vev alueoft he
evidencepr esent edbyt helit
igant soranyoft hem.Ther esol
ut i
onoft heissuemustr estsol elyon
whatt helawpr ovidesont hegi vensetofci r
cumst ances.Oncei tisclearthatt
hei ssuei nvi
tesa
reviewoft heev idencepr esented, thequesti
onposedi soneoff act.Thus,thetestofwhet hera
questionisoneofl aworoff acti snott heappell
ati
ongivent osuchquest i
onbyt hepar tyraisingt he
same; rather,i
ti swhet hertheappel l
atecourtcandeterminethei ssuer ai
sedwithoutr eviewi ngor
30
evaluati
ngt heev i
dence, i
nwhi chcase, i
tisaquestionoflaw; otherwiseitisaquest i
onoff act .

Sincet
heCourtofAppealsdi
dnotful
lyadoptthefact
ualf
indi
ngsoftheRTC,
t hi
sCourt
,inr
esol
vi
ng
thequesti
onsofl
awthatarenowinissue,shal
ll
ookintot
hefactsonl
yinsofarasthet
wocourtsa
quodiff
eredi
nthei
rappreci
ati
ont
hereof.

TheRTCf oundt hatanunregi

ster
edpar tnershi
pexistedsince1946whi chwasaffi
rmedinthe1957
document,the"AcknowledgementofPar t
ici
pati
ngCapi t
al."TheRTCusedt hi
sasitsbasi
sf orgiv
ing
Antoni
etaJarantill
aan8%shar einthethreebusinesseslistedther
einandintheot
herbusinesses
andrealpropert
iesoftherespondentsast heyhadsupposedl yacquiredt
hesethr
oughfundsf rom
31
thepart
nership.

TheCour tofAppeals,
ont heotherhand,agreedwit
htheRTCast oAntonieta’
s8%sharei nt
he
businessenumeratedintheAcknowl edgementofParti
cipat
ingCapital
,butnotastohersharei
nthe
othercorpor
ati
onsandr ealpropert
ies.TheCourtofAppealsrul
edthatAnt oni
eta’
scl
aim of8%is
basedont he"AcknowledgementofPar ti
cipat
ingCapi
tal
,"adulynotari
zeddocumentwhi chwas
specificast othesubjectofi
tscoverage.Hence, therewasnor easontopatter
nhersharei nthe
othercor porati
onsfr
om hershar einthepart
ner ship’
sbusi nesses.TheCour tofAppeal
sal sosai d
thathercl ai
mi ntherespondents’r
eal pr
opert
ieswasmor e" precari
ous"asthesewereallcov er edby
32
certi
ficatesoftit
lewhichservedast hebestevidenceast oal l
themat ter
scontainedt
herein.  Since
peti
tioner ’
sclai
m wasessentiall
ythesameasAnt oniet
a’s,theCour tofAppealsalsor
uledt hat
peti
tionerbegi venhis6%shar einthesamebusi nesseslistedi ntheAcknowledgementof
Parti
ci pati
ngCapital
.

Factual fi
ndingsoft hetri
alcourt,
whenconf ir
medbyt heCour tofAppeal s,aref i
nal andconcl usive
excepti nthef ol
lowingcases: (
1)whent hei nferencemadei smani fest l
ymi st aken, absurdor
i
mpossi bl
e; (
2)whent hereisagraveabuseofdi scretion;(
3)whent hef indingi sgr oundedent i
rel
y
onspecul ations,surmisesorconjectures; (4)whent hejudgmentoft heCour tofAppeal sisbasedon
misappr ehensionoff acts;(
5)whent hef indingsoff actar econf l
icting; (
6)whent heCour tof
Appeal s,i
nmaki ngitsfi
ndings,wentbey ondt heissuesoft hecaseandt hesamei scont r
ar yt
ot he
admi ssionsofbot happel l
antandappel lee;(7)whent hef i
ndingsoft heCour tofAppeal sare
contrarytot hoseoft hetri
alcourt
;(8)whent hef i
ndingsoff actar econcl usionswi t
houtci tati
onof
specificev i
denceonwhi chtheyarebased; (9)whent heCour tofAppeal smani festlyoverlooked
cert
ai nrelevantfactsnotdisputedbyt hepar ti
esandwhi ch,ifproper lyconsi der ed,woul djustif
ya
dif
ferentconcl usion;and(10)whent hef indingsoff actoft heCour tofAppeal sar epr emisedont he
33
absenceofev idenceandar econtradictedbyt heev i
denceonr ecor d.

I
nthi
scase,
wef
indnoer
rori
nther
uli
ngoft
heCour
tofAppeal
s.

Boththepet
it
ionerandAntoni
etaJaranti
ll
acharacterizetheirrelati
onshi
pwit
hther
espondent
sasa
co-
ownershi
p,butinthesamebr eat
h,assertt
hatav er balpartnershi
pwasformedi
n1946andwas
aff
ir
medi nt
he1957Acknowl edgementofPar t
ici
patingCapi tal.

34
Thereisaco-owner shipwhenanundi videdt hi
ngorr i
ghtbel ongst odi f
ferentper sons.  I
tisa
part
nershi
pwhent woormor epersonsbindt hemsel v
est ocont ri
but emoney ,pr operty
, ori ndust
ryto
35
acommonf und,witht hei ntenti
onofdi vi
dingt hepr ofi
tsamongt hemsel ves.  TheCour t,inPascual
36
v.TheCommi ssionerofI nternalRevenue,  quotedtheconcur ringopi ni
onofMr .Justi
ceAngel o
Bauti
stainEvangelistav .TheCol lect
orofI nt er
nal Revenue37 t
of urtherelucidat eont hedi sti
ncti
ons
betweenaco- owner shipandapar tnershi
p, t owit:

Iwishhowevertomakethefoll
owingobservati
on:
Arti
cl
e1769ofthenewCiv
ilCodelaysdownthe
rul
efordeter
miningwhenatransact
ionshouldbedeemedapart
nershi
poraco-ownershi
p.Sai
d
art
icl
eparagr
aphs2and3, pr
ov i
des;

(2)Co-
ownershiporco-possessi
ondoesnotit
sel
festabl
ishapar
tner
shi
p,whet
hersuchco-
ownersorco-possessorsdoordonotshareanyprof
itsmadebytheuseoft
hepropert
y;

(3)Theshari
ngofgrossretur
nsdoesnotofi
tsel
festabli
shapartner
shi
p,whet
herornott
he
personsshar
ingthem hav
eaj oi
ntorcommonrightorint
eresti
nanyproper
tyf
rom whi
ch
theretur
nsarederi
ved;

From theaboveitappear sthatt hef

actt hatt
hosewhoagr eet of
or m aco-owner shi
pshareordo
notshareanyprofit
smadebyt heuseoft hepropert
yhel dincommondoesnotconv er
ttheirventur
e
i
ntoapar tner
shi
p.Ort heshar ingofthegr ossretur
nsdoesnotofi tsel
festabli
shapar t
nershi p
whetherornottheper sonsshar i
ngthereinhaveajointorcommonr i
ghtorinteresti
ntheproper t
y.
Thisonlymeanst hat,asidefrom theci r
cumstanceofpr ofi
t,t
hepr esenceofot herel
ement s
consti
tuti
ngpartnershipisnecessary ,suchastheclearintenttoform apartnership,
theexistenceof
ajuri
dicalper
sonali
tydi f
ferentfrom thatoftheindi
vidualpartner
s,andt hefreedom totr
ansf eror
assi
gnanyi
nter
esti
nthepr
oper
tybyonewi
tht
heconsentoft
heot
her
s.

Iti
sevidentthatanisol
atedtransact
ionwher
ebytwoormorepersonscont
ri
but
efundstobuy
cert
ainrealestatef
orprofi
tintheabsenceofot
herci
rcumst
ancesshowingacont
rar
yint
enti
on
cannotbeconsi der
edapar t
nership.

Per sonswhocont ri
butepropert
yorf undsf oracommonent erpr
iseandagr
eetosharethegross
returnsofthatenterpr
iseinproport
iontot heircontr
ibuti
on,butwhosever
all
yret
aintheti
tl
et ot
heir
respectiv
econtri
bution,arenotther
ebyr ender edpartner
s.Theyhavenocommonst ockorcapital
,
andnocommuni t
yofi nt
erestaspri
ncipalpr opri
etor
si nthebusi
nessit
sel
fwhichtheproceeds
derived.

Ajointpurchaseofland,bytwo,doesnotconsti
tut
eaco-par
tnershi
pinrespectt
her
eto;
nordoesan
agreementt oshar
et heprof
itsandlossesonthesaleofl
andcreateapart
nershi
p;t
hepart
iesar
e
onl
yt enantsincommon.

Whereplainti
ff
,hi
sbrot
her,andanotheragreedtobecomeowner sofasingl
etractofrealt
y,hol
ding
astenantsincommon, andtodi
videtheprofit
sofdisposingofit,
thebr
otherandtheot hernotbeing
ent
itl
edtoshar ei
nplai
nti
ff’
scommi ssi
on,nopartnershipexi
stedasbet
weent hethreeparti
es,
whateverthei
rrel
ati
onmayhav ebeenast othir
dparties.

I
nor dertoconsti
tut
eapar t
nershi
pintersesether
emustbe:( a)Anintentt
ofor
mt hesame;(b)
general
lypart
ici
pati
nginbothprofi
tsandlosses;(c)andsuchacommuni t
yofi
nter
est,
asfaras
thir
dpersonsareconcernedasenableseachpar t
yt omakecontract
,managethebusi
ness,and
disposeofthewholepropert
y.xxx.

Thecommonowner shi pofproper

tydoesnotit
selfcr
eateapartnershi
pbetweentheowners,t
hough
theymayusei tf
ort
hepur poseofmakinggains;andtheymay,withoutbecomi
ngpartner
s,agree
amongt hemselv
esast othemanagement ,
anduseofsuchpr opertyandtheappl
i
cati
onoft he
38
proceedsther
efr
om.  (
Cit
ati
onsomitt
ed.)

UnderAr ticl
e1767oft heCivi
lCode, t
herearetwoessent ialelementsinacont ractofpar tnership: (
 a)
anagr eementt ocontri
butemoney ,pr
oper t
yorindustrytoacommonf und;and( b)intenttodi vide
theprofitsamongt hecontracti
ngparti
es.Thef i
rstelementisundoubt edlypresentint hecaseatbar ,
for,
admi t
tedl
y,al
l t
heparti
esinthiscasehav eagreedt o,anddid,contr
ibutemoneyandpr opertyt o
acommonf und.Hence,
  t
heissuenarrowsdownt otheiri
ntentinactingast heydid.
39
 I
tisnotdeni ed
thatalltheparti
esinthiscasehaveagr eedtocont r
ibutecapitalt
oacommonf undtobeabl et ol ater
onshar eitsprofi
ts.Theyhaveadmi tt
edt hi
sfact,agreedtoitsveraci
ty,andev ensubmi t
tedone
commondocument ar
yevidencetoprov esuchpar t
nershi
p-t heAcknowl edgementofPar ticipating
Capital.

Asthiscaser
evolvesar
oundthel
egalef
fectsoftheAcknowledgementofPar
ti
cipat
ingCapi
tal
,i
t
wouldbeinst
ruct
ivetoexami
nethepert
inentpor
tionsoft
hisdocument:

ACKNOWLEDGEMENTOF
PARTI
CIPATI
NGCAPI
TAL

KNOW ALLMENBYTHESEPRESENTS:

Thatwe,t
hespousesBuenav
entur
aRemoti
gueandConchi
taJarant
il
ladeRemot
igue,
bot
hofl
egal
age,Fi
l
ipi
nosandresi
dent
sofLoyol
aHei
ghts,
QuezonCit
y,P.
I.her
ebystat
e:
ThattheManilaAt
hlet
icSuppl yat712Raon,Mani l
a,t
heRemot igueTradingofCall
eReal
,Il
oil
oCit
y
andtheRemot i
gueTrading,Cotabat
oBranch,Cotabato,P.
I.
,alldeal
inginathl
eti
cgoodsand
equi
pment s,
andgeneralmer chandi
searerecordedinthei
rrespecti
vebookswi t
hBuenaventur
a
Remot i
gueastheregi
steredownerandar ebeingoperatedbythem assuch:

Thattheyarenott
heonlyownersoft
hecapi
taloft
hethr
eeestabl
ishment
sandthei
rpar
tici
pat
ioni
n
thecapit
alofthet
hreeest
abl
ishment
stoget
herwit
htheotherco-
ownersasoft
heyear1952are
stat
edasf ol
lows:

1.Buenav
ent
uraRemot
igue(
TWENTY-
FIVETHOUSAND)
₱25,
000.
00

2.Conchi
taJar
ant
il
ladeRemot
igue(
TWENTY-
FIVETHOUSAND)
…25,
000.
00

3.Vi
cenci
oDeocampo(
FIFTEENTHOUSAND)
……15,
000.
00

4.Rosi
taJ.Deocampo(
FIFTEENTHOUSAND)
…..
..15,
000.
00

5.Ant
oni
etaJar
ant
il
la(
EIGHTTHOUSAND)
……….
.8,
000.
00

6.Raf
ael
Jar
ant
il
la(
SIXTHOUSAND)
…………….
...
.6,
000.
00

7.Feder
icoJar
ant
il
la,
Jr.(
FIVETHOUSAND)
……….
.5,
000.
00

8.Qui
nti
nVi
smanos(
TWOTHOUSAND)
………….
..2,
000.
00

Thatasidefr
om t
hepersonsmentionedi
nthenextprecedi
ngpar
agr
aph,
noot
herper
sonhasany
i
nterestint
heabove-
mentionedt
hreeest
abli
shments.

I
NWI TNESSWHEREOF,
theysi
gnt
hisi
nst
rumenti
ntheCi
tyofMani
l
a,P.
I.
,thi
s29t
hdayofApr
il
,
1957.

[
Sgd.]
BUENAVENTURAREMOTI
GUE

[
Sgd.
]
CONCHI
TAJARANTI GUE40
LLADEREMOTI

TheAcknowledgementofPart
ici
pati
ngCapi
tali
sadulynotari
zeddocumentv ol
unt
ari
l
yexecut edby
Conchit
aJar
antil
la-
Remoti
gueandBuenaventur
aRemot i
guein1957.Peti
ti
onerdoesnotdisputeit
s
content
sandisactual
l
yrel
yingonittopr
ovehispar
ti
cipat
ioninthepar
tnershi
p.Ar
ti
cle1797oft he
Civi
lCodepr
ov i
des:

Art.1797.Thelossesandpr
ofit
sshall
bedist
ri
butedi
nconfor
mit
ywiththeagr
eement
.Ifonl
ythe
shareofeachpar t
nerint
heprofi
tshasbeenagr
eedupon,t
heshareofeachi
nthel
ossesshal
lbein
thesamepr oporti
on.

Intheabsenceofst i
pulat
ion,theshar eofeachpar t
nerintheprofi
tsandlossesshallbein
propor
tiontowhathemayhav econtributed,butthei
ndustri
alpart
nershallnotbel
iableforthe
l
osses.Asf ortheprofi
ts,t
hei ndustr
ialpartnershal
lrecei
vesuchshareasmaybej ustandequitabl
e
underthecircumstances.Ifbesideshisserv i
ceshehascont r
ibut
edcapit
al,heshallalsorecei
vea
sharei
nt heprofi
tsinproporti
ont ohiscapi t
al.(
Emphasessuppl i
ed.)
Iti
scl earfrom thef oregoingt hatapar tneri senti
tledonlytohisshar easagr eedupon, orinthe
absenceofanysuchst i
pulations, thent ohi sshar einproporti
ont ohiscont r
ibut
iont othe
partnership.Thepet it
ionerhi msel fclaimshi sshar etobe6%, asst atedint heAcknowl edgementof
Partici
patingCapital.Howev er,pet i
tionerf ail
stor eali
zethatthisdocumentspeci ficall
yenumer at
ed
thebusi nessescov eredbyt hepar tnershi p:ManilaAt hl
eti
cSuppl y,Remot igueTr adinginIl
oiloCit
y
andRemot i
gueTradi ngi nCot abat oCi ty.Si ncether ewasacl earagreementt hatthecapitalthe
partnerscont r
ibutedwentt ot het hr eebusi nesses, thenthereisnor easont odeviatefrom such
agreementandgobey ondt hest ipulationsi nthedocument .Therefore,t
heCour tofAppeal sdidnot
erri
nl imiti
ngpet i
tioner ’
sshar et ot heasset soft hebusinessesenumer atedi nthe
Acknowl edgementofPar ti
ci patingCapi tal.

41
InVi
ll
arealv
.Ramir
ez,  t
heCourthel
dthatsinceapart
nershi
pisaseparat
ejur
idical
enti
ty,
the
shar
est obepai
douttothepart
nersisnecessari
l
yli
mitedonlyt
oit
stotalr
esources,t
owit:

Sinceitisthepart
nership,asasepar ateanddi st
inctenti
ty,t
hatmustr efundt hesharesoft he
partner
s, t
heamountt ober efundedi snecessar i
lyli
mitedtoitstotalresour ces.I
not herwor ds,
it
canonl ypayoutwhati thasini t
scof fers,
whi chconsistsofallit
sasset s.Howev er,beforethe
partner
scanbepai dt heirshares, thecreditorsofthepar t
nershipmustf irstbecompensat ed.After
al
l t
hecr edit
orshavebeenpai d,what everisleftofthepartnershipassetsbecomesav ail
ableforthe
42
paymentoft hepartners’shares.

Therei
snoevidencet
hatthesubj
ectr
ealpr
oper
ti
eswer
easset
soft
hepar
tner
shi
pref
err
edt
oint
he
Acknowl
edgementofPart
ici
pati
ngCapi
tal
.

Thepet i
ti
onerfurtherasser
tst hathei senti
tl
edt orespondents’propertiesbasedontheconceptof
tr
ust.Hecl ai
mst hatsincethesubj ectrealpr
oper t
ieswerepur chasedusi ngfundsofthepar
tner
shi
p,
whereinhehasa6%shar e,then"lawandequi tymandat esthatheshoul dbeconsider
edasaco-
43 44
owneroft hosepropertiesi
nsuchpr oporti
on."  I
nPigaov.Rabani l
lo,  t
hisCourtexpl
ainedt
he
conceptoft r
usts,towit:

Expresstrustsarecreatedbyt heintentionoft hetrustororoft hepar ti

es,whi l
eimpliedt rustscome
i
ntobeingbyoper at
ionofl aw,eit
hert hr
oughi mpl i
cat i
onofani ntenti
ont ocreateat r
ustasamat t
er
oflawort hroughtheimposi ti
onoft het rustir
respect i
veof,andev encont r
aryto,anysuchi ntenti
on.
Inturn,
impl i
edtrustsareeitherresulti
ngorconst r
uct i
vetrusts.Resul t
ingtrustsarebasedont he
equit
abledoct ri
nethatvaluableconsider ati
onandnotl egaltit
ledet erminestheequi t
abl et i
tl
eor
i
nterestandar epresumedal waystohav ebeencont emplatedbyt heparti
es.Theyar isefr om the
natureorci r
cumstancesoft heconsi derationinvol
v edinat ransact i
onwher ebyoneper sont hereby
becomesi nvest
edwi t
hlegal ti
tl
ebuti sobl i
gatedinequi t
yt ohol dhislegaltit
leforthebenef i
tof
45
another.

Onpr
ovi
ngt
heexi
stenceofat
rust
,thi
sCour
thel
dthat
:

Respondenthaspr
esentedonlybareassert
ionsthatat
rustwascr
eat
ed.Not
ingt
heneedt
opr
ove
theexi
stenceofat
rust,
thisCourthasheldthus:

"Asarule,t
heburdenofprovi
ngtheexi stenceofatrustisonthepartyassertingit
sexi stence,and
suchproofmustbeclearandsatisfact
or i
lyshowtheexistenceofthetrustandi t
selement s.While
i
mpliedtrust
smaybepr ovedbyor alevidence,t
heevidencemustbet rustworthyandr eceiv edbyt he
cour
tswi t
hextr
emecaut i
on,andshouldnotbemadet orestonloose,equivocalorindefinite
46
decl
arati
ons.Tr
ustwort
hyevidencei sr
equi r
edbecauseor alevi
dencecaneasi lybefabr i
cated."
 

Thepet
it
ionerhasf
ail
edt
opr
ovet
hatt
her
eexi
stsat
rustov
ert
hesubj
ectr
eal
proper
ti
es.Asi
def
rom
hi
sbar eal
legati
ons,hehasf ail
edtoshowt hatt
herespondentsusedthepar t
nership’
smoneyto
purchasethesaidpropert
ies.Evenassumi ngarguendothatsomepar tnershipincomewasusedt o
acquir
etheseproperti
es,thepetit
ionershouldhavesuccessful
lyshownt hatthesef undscamefr
om
hi
sshar ei
nt hepart
nershi
ppr ofi
ts.Aft
erall,byhi
sownadmi ssion,andasst atedi nthe
AcknowledgementofPar t
icipati
ngCapital
, heownedamer e6%equi tyint hepartnershi
p.

Inessence, t
hepet iti
oneri sclai
mi nghi s6%shar ei nt hesubj ectr eal proper t
ies, byr el
yingonhi s
ownsel f-
ser vingt estimonyandt heequal l
ybi asedt est i
monyofAnt oni etaJar ant i
ll
a.Pet i
tionerhas
notpr esent edev idence, ot herthant heseunsubst ant i
atedt est imoni es, toprov et hatther espondent s
didnothav ethemeanst of undt heirot herbusi nessesandr eal proper tieswit houtt hepar tnership’s
i
ncome.Ont heot herhand, therespondent shav enotonl y
, byt estimoni alevidence, pr
ov ent hei
rcase
againstt hepet iti
oner ,buthav eal sopr esent edsuf ficientdocument ar yev i
dencet osubst ant i
atet heir
claims, all
egat ionsanddef enses.Theypr esent edpr eponder antpr oofonhowt heyacqui redand
47
fundedsuchpr oper ti
esi naddi t
iont otaxr eceiptsandt axdecl arati
ons.  I
thasbeenhel dt hat"whi le
taxdecl arat i
onsandr eal tytaxrecei ptsdonotconcl usiv el
ypr ov eowner ship,t heymayconst it
ute
strongev idenceofowner shipwhenaccompani edbypossessi onf oraper iodsuf fi
cientfor
48
prescription."  Mor eover ,itisar ulei nthisjurisdicti
ont hatt est imoni alev i
dencecannotpr evailov er
49
document aryev idence.  ThisCour thadonsev eral occasi ons, expressedourdi sapproval onusi ng
50
mer esel f-
ser vingt estimoni estosuppor tone’scl aim.I nOcampov .Ocampo,  acaseonpar ti
ti
onof
aco- owner ship, wehel dt hat:

Petit
ioner
sasser tt
hatthei
rcl
aim ofco-
ownershipofthepropert
ywassuf f
icientl
yprov
edbyt hei
r
witnesses--LuisaOcampo-Ll
ori
nandMel i
taOcampo.Wedi sagr
ee.Thei rt
est i
moniescannotprevai
l
overthearrayofdocumentspresentedbyBelen.Aclai
m ofowner shipcannotbebasedsi mplyon
51
thetesti
moni esofwit
nesses;muchlessonthoseofinter
estedpar t
ies,sel
f-servi
ngastheyare.

I
tistruethatacer ti
ficateoft i
tl
ei smer el
yanev idenceofowner shiporti
tl
eov erthepar ti
cul
ar
propertydescribedt herein.Registrati
onintheTor renssy stem doesnotcreateorv esttitl
eas
regi
strati
onisnotamodeofacqui ri
ngowner ship;hence,thiscannotdepriv
eanaggr ievedpart
yofa
52
remedyi nlaw.  Howev er,peti
ti
onerasser tsowner shi
pov erporti
onsofthesubj ectr ealproper
ti
es
onthest rengt
hofhi sownadmi ssionsandont het esti
monyofAnt oni
etaJarantil
la.  Asheldbythi
s
1avv
phi
1

53
CourtinRepubl icoft hePhi l
ippinesv .Orf
inada,Sr. :

Indeed,aTorrensti
t l
eisgeneral
lyconclusiveevi
denceofowner shi
pofthelandr eferredtot her
ein,
andast rongpresumpt i
onexiststhataTor r
enstit
lewasr egul
arl
yissuedandv ali
d.ATor rensti
tl
eis
i
ncont r
overt
ibleagainstanyi
 nf
ormaci onpossessori
a,ofotherti
tl
eexist
ingpriortot heissuance
thereofnotannotatedont heTorrenstit
le.Moreover
,personsdeali
ngwithpropert ycoveredbya
54
Torrenscerti
fi
cateoft i
tl
earenotr equir
edtogobey ondwhatappear sonitsface.

Aswehav eset t
ledt hatthisact i
onneverreal
lywasforpart
it
ionofaco- ownership,topermit
peti
ti
oner ’
sclaim ont hesepr oper ti
esi
stoall
owacol l
ater
al,i
ndirectattackonr espondents’
admittedtit
les.Inthewor dsoft heCourtofAppeals,
"suchev i
dencecannotov erpowerthe
conclusiv
enessoft hesecer ti
ficatesoft
it
le,moresosinceplai
nt i
ff
’s[peti
ti
oner’s]cl
aimsamountt
o
acoll
at er
alattack,whi chispr ohibit
edunderSecti
on48ofPr esidenti
alDecreeNo.1529, t
he
55
PropertyRegistrat
ionDecr ee.
"

SEC.48. Cert
ifi
cat
enotsubjectt
ocollat
eralatt
ack.–Acer t
if
icat
eoft
it
leshall
notbesubjectt
o
coll
ater
al at
tack.I
tcannotbealt
ered,
modi f
ied,orcancel
l
edexcepti
nadirectproceedi
ngin
accordancewi t
hlaw.

Thi
sCourthasdeemedanacti
onorproceedi
ngtobe"anat
tackonati
tl
ewhenit
sobject
iveisto
56
nul
l
ifyt
heti
tle,
ther
ebychal
l
engi
ngthejudgmentpur
suantt
owhicht
hetit
lewasdecr
eed.
"  I
n
 57
Aguil
arv.Alf
aro,  t
hisCour
tfur
therdi
sti
ngui
shedbet
weenadi
rectandani
ndi
rectorcol
l
ater
al
at
tack,asfol
lows:

Acol l
ater
alatt
acktranspireswhen, i
nanot heract
iontoobtainadi f
ferentrel
iefandasani nci
dentto
thepresentacti
on,anat t
ackismadeagai nstthejudgmentgrantingthet i
tl
e.Thismannerofat tack
i
st obedisti
nguishedfrom adi r
ectattackagainstajudgmentgr anti
ngt heti
tle,
throughanact i
on
whosemai nobjecti
veist oannul,setaside,orenj
ointheenforcementofsuchj udgmenti fnotyet
i
mpl emented,ortoseekr ecoveryift
hepr opert
ytitl
edunderthejudgmenthadbeendi sposedof.xx
x.

Pet
iti
oner
’sonlypieceofdocumentaryevidenceistheAcknowledgementofPar
tici
pat
ingCapit
al,
whi
chasdi scussedabove,f
ail
edtoprov ethatthereal
propert
iesheiscl
aimi
ngco-ownershi
pof
wereacquir
edoutoft hepr
oceedsoft hebusinessescoveredbysuchdocument.Ther
efore,
pet
it
ioner
’stheoryhasnofactual
orlegal l
egtostandon.

WHEREFORE,t
hePet
iti
onisher
eby DENI
ED andt
heDeci
sionoft
heCour
tofAppeal
sinCA-
G.R.CV
No.40887,
dat
edJul
y30,2002is 
AFFIRMED.

SOORDERED.

TERESITAJ.LEONARDO-
DECASTRO
Associ
ateJust
ice

WECONCUR:

RENATOC.CORONA
Chi
efJusti
ce
Chai
rperson

DI
OSDADOM.PERALTA* ROBERTOA.ABAD* *
Associ
ateJust
ice Associ
ateJust
ice
JOSEPORTUGALPEREZ
Associ
ateJust
ice

CERTIFICATION

Pursuantt
oSecti
on13,Arti
cleVI
IIoftheConsti
tut
ion,Icer
ti
fyt
hatt
heconcl
usionsi
ntheabov
e
Decisi
onhadbeenreachedinconsul
tati
onbeforethecasewasassi
gnedtothewrit
eroft
heopini
on
oftheCourt’
sDi
vi
sion.

RENATOC.CORONA
Chi
efJust
ice