CASE NO 1 immovable properties, which should be executed in a public

Effect if immovables are contributed into the partnership.
In Litonjua, Jr. vs. Litonjua, Sr., et al., G.R. No. 166299-300,
December 13, 2005, it was once again said that the contract –
validating inventory requirement under Article 1773 of the Civil Code
applies as long as real property or real rights are initially brought into
the partnership. In short, it is really of no moment which of the
partners contributed immovables. In context, the more important
consideration is that real property was contributed, in which case an
inventory of the contributed property duly signed by the parties should
be attached to the public instrument, else there is legally no
partnership to speak of.
instrument. Moreover, the contributions exceeded P3,000.00, which
should also be in a public instrument and recorded with SEC.
Moreover, an inventory had to be made and hereby attached to the
public instrument. Furthermore, the Court gave notice of the fact that
Aurelio cannot contend that the contributions of real property were
only made after the formation of the partnership as evidence proves
otherwise.
2. No. The Court held that the partnership is void, and as such,
Aurelio has no cause of action to which to enforce specific
performance.

Litonjua v. Litonjua
G.R. No. 166299-300; December 13, 2005

FACTS:
Aurelio Litonjua and Eduardo Litonjua executed a private document
entering into a partnership with Yang for the formation of a Cineplex
business. To this, Aurelio Litonjua would act as an industrial partner
and contribute his shares in the Litonjua family businesses (theatres,
shipping land development).
After the relationship between the two brothers became sour, Aurelio
filed with the court for specific performance of accounting for his share
in the business and the payment to him of such. Eduardo contended
that Aurelio had no cause of action such that the agreement forming
the partnership had not been a public instrument, and as such, is void
for violating the provisions of Art. 1771, Art. 1772, Art. 1773 of the
NCC.
ISSUES:
Is the partnership void?
May Aurelio demand specific performance of his share in the
partnership?
HELD:
1. Yes. The Court held that the partnership is void precisely because
of the legal provisions raised. Aurelio contributed real rights to

Case no. 2
HEIRS OF TAN ENG KEE vs.CA
HEIRS OF TAN ENG KEE vs.CA 341 SCRA 740, G.R. No. 126881,
October 3, 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 the deceased Tan EngKee and Tan Eng Lay are
joint adventurers and/or partners in a business venture and/or
particular partnership called Benguet Lumber and as such should
share in the profits and/or losses of the business venture or particular
partnership
 
RULING:
There was no partnership whatsoever. 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.
 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.
CASE NO. 3 However, before the partners can be paid their shares, the creditors of
VILLAREAL V. RAMIREZ the partnership must first be compensated. Therefore, the exact
GR NO. 144214 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
Facts: their share was thus erroneous.
 
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

CASE N0. 4
MICHAEL C. GUY, Petitioner, vs. ATTY. GLENN C. GACOTT,
Respondent.
G.R. No. 206147
FACTS:
Gacott purchased two (2) brand new transreceivers from Quantech
Systems Corp (QSC) through its employee Rey Medestomas. Due to
major defects, Gacott returned the items to QSC and requested for
replacement. However, despite several demands, Gacott was never
given a replacement or a refund. Thus, Gacott filed a complaint for
damages. Summons was served upon QSC and Medestomas,
afterwhich they filed their Answer.
RTC’s decision ordered the defendants to jointly and severally pay
plaintiff. The decision became final as QSC and Medestomas did not
interpose an appeal. Gacott then secured a Writ of Execution. During
the execution stage, Gacott learned that QSC was not a corporation,
but was in fact a general partnership. In the articles of
partnership, Guy was appointed as General Manager of QSC. The
sheriff attached Guy’s vehicle. Guy filed his Motion to Lift Attachment
Upon Personalty, arguing that he was not a judgment debtor and,
therefore, his vehicle could not be attached. On June 28, 2009, the
RTC issued an order denying Guy’s motion and his subsequent
motion for reconsideration. RTC’s ratio: All partners are liable
solidarily with the partnership for everything chargeable to the
partnership under Article 1822 and 1823. Guy to seek relief before the
CA. The CA dismissed Guy’s appeal for the same reasons given by
the trial court. Guy filed a motion for reconsideration but it was denied
by the CA.
Guy arguments:
1. That jurisdiction over the person of the partnership (QSC) was
not acquired because the summons was never served upon it
or through any of its authorized officer;
2. Article 1816 of the Civil Code which states that the liability of
the partners to the partnership is merely joint and subsidiary in
nature. And he is not solidarily liable with the partnership
because the solidary liability of the partners under Articles
1822, 1823 and 1824 of the Civil Code only applies when it
stemmed from the act of a partner. In this case, the alleged
lapses were not attributable to any of the partners.
ISSUE 1a: WON the service of summons to QSC was flawed.
HELD: YES, however, voluntary appearance cured the defect.
SC RATIO:
Under Section 11, Rule 14 of the 1997 Revised Rules
of Civil Procedure, when the defendant is a
corporation, partnership or association organized under
the laws of the Philippines with a juridical personality,
the service of summons may be made on the
president, managing partner, general manager,
corporate secretary, treasurer, or in-house counsel.
Jurisprudence is replete with pronouncements that
such provision provides an exclusive enumeration of
the persons authorized to receive summons for juridical
entities.
In this case, QSC was not served with the summons
through any of the enumerated authorized persons to
receive such, namely: president, managing partner,
general manager, corporate secretary, treasurer or in-
house counsel. Service of summons upon
persons other than those officers enumerated in
Section 11 is invalid. Even substantial compliance is
not sufficient service of summons. Nevertheless, while
 proper service of summons is necessary to vest the
court jurisdiction over the defendant, the same is
merely procedural in nature and the lack of or defect in
the service of summons may be cured by the
defendant’s subsequent voluntary submission to the
court’s jurisdiction through his filing a responsive
pleading such as an answer. In this case, it is not
disputed that QSC filed its Answer despite the
defective summons. Thus, jurisdiction over its person
was acquired through voluntary appearance.
ISSUE 1b: WON whether the trial court’s jurisdiction over QSC
extended to the person of Guy insofar as holding him solidarily liable
with the partnership.
HELD: NO.
SC RATIO:
Although a partnership is based on delectus personae or
mutual agency, whereby any partner can generally represent
the partnership in its business affairs, it is non sequitur that a
suit against the partnership is necessarily a suit impleading
each and every partner. It must be remembered that a
partnership is a juridical entity that has a distinct and separate
personality from the persons composing it.
A decision rendered on a complaint in a civil action or
proceeding does not bind or prejudice a person not impleaded
therein, for no person shall be adversely affected by the
outcome of a civil action or proceeding in which he is not a
party.
Here, Guy was never made a party to the case. He did not
have any participation in the entire proceeding until his vehicle
was levied upon and he suddenly became QSC’s “co-
defendant debtor” during the judgment execution stage. It is a
basic principle of law that money judgments are enforceable
only against the property incontrovertibly belonging to the
judgment debtor.
ISSUE 2a:
WON a partners’ liability is subsidiary and generally joint and
WON immediate levy upon the property of a partner can be
made.
HELD.
NO partner’s liability is not subsidiary and generally joint and
the partner’s property cannot be immediately levied.
SC RATIO:
Article 1816. All partners, including industrial ones, shall be
liable pro rata with all their property and after all the
partnership assets have been exhausted, for the contracts
which may be entered into in the name and for the account of
the partnership, under its signature and by a person
authorized to act for the partnership. However, any partner
may enter into a separate obligation to perform a partnership
contract.
This provision clearly states that, first, the partners’ obligation
with respect to the partnership liabilities is subsidiary in nature.
To say that one’s liability is subsidiary means that it merely
becomes secondary and only arises if the one primarily liable
fails to sufficiently satisfy the obligation.
In this case, Guy’s liability would only arise after the properties
of QSC would have been exhausted. The records, however,
miserably failed to show that the partnership’s properties were
exhausted. Clearly, no genuine efforts were made to locate the
properties of QSC that could have been attached to satisfy the
judgment − contrary to the clear mandate of Article 1816.
Second, Article 1816 provides that the partners’ obligation to
third persons with respect to the partnership liability is pro
rata or joint. Liability is joint when a debtor is liable only for the
payment of only a proportionate part of the debt. In contrast,
a solidary liability makes a debtor liable for the payment of the
entire debt. In the same vein, Article 1207 does not presume
solidary liability unless: 1) the obligation expressly so states;
or 2) the law or nature requires solidarity. With regard to
partnerships, ordinarily, the liability of the partners is not
solidary. The joint liability of the partners is a defense that can
be raised by a partner impleaded in a complaint against the
partnership.
In other words, only in exceptional circumstances shall the
partners’ liability be solidary in nature. Articles 1822, 1823 and
1824 of the Civil Code provide for these exceptional
conditions, to wit:
Article 1822. Where, by 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, loss or injury is caused to any person, not
being a partner in the partnership, or any penalty is
incurred, the partnership is liable therefor to the same
extent as the partner so acting or omitting to act.
Article 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 and the money or property so received
is misapplied by any partner while it is in the
custody of the partnership.
Article 1824. All partners are liable solidarily with the
partnership for everything chargeable to the
partnership under Articles 1822 and 1823.
In essence, these provisions articulate that it is the act of a
partner which caused loss or injury to a third person that
makes all other partners solidarily liable with the partnership
because of the words "any wrongful act or omission of any
partner acting in the ordinary course of the business," "one
partner acting within the scope of his apparent
authority" and "misapplied by any partner while it is in the
custody of the partnership." The obligation is solidary because
the law protects the third person, who in good faith relied upon
the authority of a partner, whether such authority is real or
apparent.40
In the case at bench, it was not shown that Guy or the other
partners did a wrongful act or misapplied the money or
property he or the partnership received from Gacott. A third
person who transacted with said partnership can hold the
partners solidarily liable for the whole obligation if the case of
the third person falls under Articles 1822 or
1823.41 Gacott’s claim stemmed from the alleged defective
transreceivers he bought from QSC, through the latter's
employee, Medestomas. It was for a breach of warranty in a
contractual obligation entered into in the name and for the
account of QSC, not due to the acts of any of the partners. For
said reason, it is the general rule under Article 1816 that
governs the joint liability of such breach, and not the
exceptions under Articles 1822 to 1824. Thus, it was improper
to hold Guy solidarily liable for the obligation of the
partnership.
ISSUE 2b:
WON it is necessary to implead a partner in order to be
bound by the partnership liability.

HELD: YES. It is necessary to implead a partner.

SC RATIO:

Under Article 1821, notice to any partner of any matter

relating to partnership affairs, and the knowledge of the
partner acting in the particular matter, acquired while a
partner or then present to his mind, and the knowledge of any
other partner who reasonably could and should have
communicated it to the acting partner, operate as notice to or
knowledge of the partnership, except in the case of fraud on
the partnership, committed by or with the consent of that
partner.

A careful reading of the provision shows that notice to any

partner operates as notice to or knowledge to the
partnership only. Evidently, it does not provide for the
reverse situation, or that notice to the partnership is notice to
the partners.

SUPREME COURT RULING: WHEREFORE, the petition

is GRANTED. The June 25, 2012 Decision and the March 5, 2013
Resolution of the Court of Appeals in CA-G.R. CV No. 94816 are
hereby REVERSED and SET ASIDE. Accordingly, the Regional Trial
Court, Branch 52, Puerto Princesa City, is ORDERED TO
RELEASE Michael C. Guy's Suzuki Grand Vitara subject of the Notice
of Levy/ Attachment upon Personalty.

CASE NO. 5
PRIMELINK PROPERTIES AND DEVT CORP V. LAZATIN-MAGAT,
G.R. O 167379 (2006)
FACTS:
Primelink is a domestic corporation engaged in real estate
development while respondents Lazatin are co-owners of 2 parcels of
land in Tagaytay. In 1994, Primelink, represented by Lopez
(President) and the Lazatins entered into a joint venture agreement
(JVA) for the development of the subject property into a residential
subdivision
1. Under the JVA, the Lazatins obliged themselves to contribute
the subject property as their share and for its part, Primelink
undertook to contribute, money, labor personnel, machineries,
equipment, etc
2. For 4 years however, Primelink failed to develop the said land.
As such, the Lazatins filed a complaint to rescind the JVA
3. The trial court ruled in favor of the Lazatins and ordered
Primelink to return the possession of the property without the
Lazatins paying for said improvements.On appeal, CA affirmed
the same.
4. Primelink assaidled the order that turning over improvements
to the Lazatins without reimbursement is unjust; that Lazatin
did not ask the properties to be placed under their possession
but merely asked for rescission of the JVA
ISSUE: WON the improvements made by Primelink should also be
turned over under the possession of respondent Lazatin
RULING: Yes. The order of the court for Primelink to return
possession of the real estate property belonging to Lazatin including
all improvements thereon was not a judgment that was different in
kind that what was prayed for by the Lazatins; it was just a necessary
consequence to the order of rescission.
As a general rule, the relation of the parties in joint ventures is
government by their agreement. When the agreement is silent on any
particular issue, the general principles of partnership may be resorted
to.
The legal concept of a joint venture is of common law origin. It has
generally been understood to mean an organization formed for some
temporary purpose. It is, in fact, hardly distinguishable from
partnership since elements are similar—community of interest in the
business, sharing of profits and losses, and a mutual right of control.
The main distinction is that partnership contemplates a general
business with some degree of continuity, while a joint venture is
formed for the execution of a single transaction, and is thus of a
temporary nature.
With the rescission of the JVA on account of petitioner’s fraudulent
acts, all authority of any partner to act for the partnership is terminated
except insofar 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
partnership and discharging the obligations of the partnership.
It must be stressed that although respondents 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 under Art 1837 and 1838 NCC, and
subject to the outcome of the settlement of the accounts between the
parties as provided in Art 1839, absent any agreement of the parties
in their JVA to the contrary. Until the partnership accounts are
determined, it cannot be ascertained how much any of the parties is
entitled, if at all.

CASE NO. 6
Emnace v. CA
GR No. 126334 (23 November 2001)
Ynares-Santiago, J. kmd
SUBJECT MATTER: Partnerships; Rights of a partner
CASE SUMMARY:
Emnace, Tabanao, and Divina-Gracia were partners in a fishing
industry. They decided to dissolve their partnership. However
hroughout the existence of the partnership, and even after Vicente
Tabanao’s demise, Emnace failed to submit to Tabanao’s heirs any
statement of assets and liabilities of the partnership, and to render an
accounting of the partnership’s finances. Emnace also failed to turn
over Tabanao’s shares. Heirs of Tabanao filed an action for
accounting and payment of shares against Emnace. The issue in this
case is WON the heirs action for accounting has prescribed. The SC
ruled in favor of Emnace.
DOCTRINE:
For as long as the partnership exists, any of the partners may demand
an accounting of the partnership’s business, and prescription of the
said right starts to run only upon the dissolution of the partnership
when the final accounting is done.
FACTS:
Emilio Emnace, Vicente Tabanao and Jacinto Divina-gracia were
partners in a fishing business, Ma. Nelma Fishing Industry.
After Jacinto Divinagracia’s withdrew from the partnership, they
decided to dissolve their partnership and executed an agreement of
partition and distribution of the partnership properties among them
some time in January of 1986. Assets to be distributed were five (5)
fishing boats, six (6) vehicles, and two (2) parcels of land.
Tabanao died in 1994.
Throughout the existence of the partnership, and even after Vicente
Tabanao’s demise, petitioner failed to submit to Tabanao’s heirs any
statement of assets and liabilities of the partnership, and to render an
accounting of the partnership’s finances. Petitioner also reneged on
his promise to turn over to Tabanao’s heirs the deceased’s 1/3 share
in the total assets of the partnership, amounting to P30,000,000.00, or
the sum of P10,000,000.00, despite formal demand for payment
thereof.
Consequently, Tabanao’s heirs, respondents herein, filed against
petitioner an action for accounting, payment of shares, division of
assets and damages.
Petitioner filed a motion to dismiss the complaint on the grounds of
improper venue, lack of jurisdiction over the nature of the action or
suit, and lack of capacity of the estate of Tabanao to sue.
Trial court denied the motion to dismiss.
Respondents filed an amended complaint, incorporating the additional
prayer that petitioner be ordered to “sell all (the partnership’s) assets
and thereafter pay/remit/deliver/surrender/yield to the plaintiffs” their
corresponding share in the proceeds thereof.
Petitioner filed a manifestation and motion to dismiss. As an additional
ground, petitioner raised prescription warranting the outright dismissal
of the complaint trial court denying the motion to dismiss
Trial court ruled that prescription begins to run only upon the
dissolution of the partnership when the final accounting is done.
Hence, prescription has not set in the absence of a final accounting.
Court of Appeals rendered the assailed decision, dismissing the
petition for certiorari.
Petitioner filed the instant petition for review.
ISSUE/S:
1. WON the action for accounting was filed in an improper venue.
(NO)
2. WON the surviving spouse of Tabunao has legal capacity to
sue. (YES)
 3. WON the action for accounting has prescribed. (NO) 
TOPICAL
HOLDING/RATIO:
1. Petitioner’s argument:
Petitioner insists that venue was improperly laid since the
action is a real action involving a parcel of land that is located
outside the territorial jurisdiction of the court a quo.
SC ruled that there was no error on the part of the trial court
and the Court of Appeals in holding that it was filed in correct
venue.
An action for accounting, payment of partnership shares,
division of assets and damages is a personal action which,
under the Rules, may be commenced and tried where the
defendant resides or may be found, or where the plaintiffs
reside, at the election of the latter
2. Petitioner’s argument:
Petitioner asserts that the surviving spouse of Vicente
Tabanao has no legal capacity to sue since she was never
appointed as administratrix or executrix of his estate.
SC ruled that petitioner’s objection in this regard is misplaced.
The surviving spouse does not need to be appointed as
executrix or administratrix of the estate before she can file the
action. She and her children are complainants in their own
right as successors of Vicente Tabanao. From the very
moment of Vicente Tabanao’s death, his rights insofar as the
partnership was concerned were transmitted to his heirs, for
rights to the succession are transmitted from the moment of
death of the decedent.
Whatever claims and rights Vicente Tabanao had against the
partnership and petitioner were transmitted to respondents by
operation of law, more particularly by succession. Moreover,
respondents became owners of their respective hereditary
shares from the moment Vicente Tabanao died.
As successors who stepped into the shoes of their decedent
upon his death, they can commence any action originally
pertaining to the decedent. From the moment of his death, his
rights as a partner and to demand fulfillment of petitioner’s
obligations as outlined in their dissolution agreement were
transmitted to respondents. They, therefore, had the capacity
to sue and seek the court’s intervention to compel petitioner to
fulfill his obligations.
3. Petitioner’s argument:
Petitioner contends that the trial court should have
dismissed the complaint on the ground of prescription,
arguing that respondents’ action prescribed four (4) years
after it accrued in 1986.
The three (3) final stages of a partnership are: (1)
dissolution; (2) winding-up; and (3) termination. The
partnership, although dissolved, continues to exist and its
legal personality is retained, at which time it completes
the winding up of its affairs, including the partitioning and
distribution of the net partnership assets to the partners.
For as long as the partnership exists, any of the partners
may demand an accounting of the partnership’s business.
Prescription of the said right starts to run only upon the
dissolution of the partnership when the final accounting is
done.
The SC found that prescription had not even begun to run in
the absence of a final accounting.
Article 1842 of the Civil Code provides:
The right to an account of his interest shall accrue to any
partner, or his legal representative as against the winding up
partners or the surviving partners or the person or partnership
continuing the business, at the date of dissolution, in the
absence of any agreement to the contrary.
The provision states that the right to demand an
accounting accrues at the date of dissolution in the
absence of any agreement to the contrary. When a final
accounting is made, it is only then that prescription
begins to run. In the case at bar, no final accounting has
been made, and that is precisely what respondents are
 seeking in their action before the trial court, since
petitioner has failed or refused to render an accounting of
the partnership’s business and assets. Hence, the said
action is not barred by prescription.
WHEREFORE, in view of all the foregoing, the instant petition is
DENIED for lack of merit, and the case is REMANDED to the
Regional Trial Court
agreed that any loss or profit from the sale and operation of the boats
would be divided equally among them also shows that they had
indeed formed a partnership. The principle of corporation by estoppel
cannot apply in the case as Lim Tong Lim also benefited from the use
of the nets in the boat, which was an asset of the partnership. Under
the law on estoppel, those acting in behalf of a corporation and those
benefited by it, knowing it to be without valid existence are held liable
as general partners. Hence, the question as to whether such was
legally formed for unknown reasons is immaterial to the case.

CASE NO. 7
Lim vs. Philippine Fishing Gear Industries Inc. [GR 136448, 3
November 1999]

FACTS: Lim Tong Lim requested Peter Yao and Antonio Chuato

engage in commercial fishing with him. The three agreed to purchase
two fishing boats but since they do not have the money they borrowed
from one Jesus Lim the brother of Lim Tong Lim. Subsequently, they
again borrowed money for the purchase of fishing nets and other
fishing equipments. Yao and Chua represented themselves as acting
in behalf of “Ocean Quest Fishing Corporation” (OQFC) and they
contracted with Philippine Fishing Gear Industries (PFGI) for the
purchase of fishing nets amounting to more than P500k. However,
they were unable to pay PFGI and hence were sued in their own
names as Ocean Quest Fishing Corporation is a non-existent
corporation. Chua admitted his liability while Lim Tong Lim refused
such liability alleging that Chua and Yao acted without his knowledge
and consent in representing themselves as a corporation.
 
 
ISSUE: Whether Lim Tong Lim is liable as a partner
 
 
HELD: Yes. It is apparent from the factual milieu that the three
decided to engage in a fishing business. Moreover, their Compromise
Agreement had revealed their intention to pay the loan with the
proceeds of the sale and to divide equally among them the excess or
loss. The boats and equipment used for their business entails their
common fund. The contribution to such fund need not be cash or fixed
assets; it could be an intangible like credit or industry. That the parties