COMMISSIONER OF INTERNAL REVENUE, petitioner

Versus
WILLIAM J. SUTER AND THE COURT OF TAX
APPEALS, respondents
G.R. No. L-25532 February 28,1969

Facts:
"William J. Suter 'Morcoin' Co., Ltd.," a limited partnership was
formed on 30 of September 1947 by the general partner namely William J.
Suter, and limited partners namely Julia Spirig and Gustav Carlson. The
partners contributed money to the partnership and it was duly registered with
the Securities and Exchange Commission. Some events takes place, wherein
the general partner Suter and limited partner Spirig got married on 1948 and,
thereafter, a limited partner Carlson decided to sold his share in the
partnership to Suter and his wife. The proceeds of sale of the share of limited
partner Carlson was duly recorded with the Securities and Exchange
Commission. The limited partnership had been filing its income tax returns
as a corporation without objection by the Commissioner of Internal
Revenue, until in1959 when the latter, in an assessment, consolidated the
income of the firm and the individual incomes of the partners-spouses Suter
and Spirig, resulting in a determination of a deficiency income tax against
respondent Suter, for the respective two years. Partner-Spouses Suter
protested the assessment.
Issue:
Whether or not the partnership was dissolved after the marriage of
the partners, William J .Suter and Julia Spirig Suter and the subsequent sale
to them by the remaining partner, Gustav Carl-son of his participation of
P2,000.00 in the partnership for a nominal amount of P1.00.

Decision:
1. Where a company is not a universal partnership
When the contributions of the partners were fixed sums of money and
neither one of them was an industrial partner, it follows that the firm
was not a partnership wherein spouses are forbidden to enter. Nor
could the subsequent marriage of the partners operate to dissolve it,
such marriage not being one of the causes provided for that purpose
by law. The marriage of the partners doesn’t make the company a sole
proprietorship when the capital contributions of partners William J.
Suter and Julia Spirig were separately owned and contributed by them
before their marriage; and after they were joined in wedlock, such
contributions remained their respective separate property.