MARJORIE TOCAO and WILLIAM T. BELO, v.

COURT OF APPEALS and

NENITA A. ANAY.
[G.R. No. 127405. October 4, 2000.]
YNARES-SANTIAGO,
J.
:
FACTS:
Private respondent Nenita A. Anay met petitioner William T. Belo who introduced Anay to
petitioner Marjorie Tocao. Thethree agreed to form a joint venture for the importation and local
distribution of kitchen cookwares. Under the joint venture, Belo contributedP2.5 million, Tocao
contributed some cash and acted as president and general manager, and Anay acted as head of
the marketing departmentand later, vice-president for sales.Operating under the name of
Geminesse Enterprise, the sole proprietorship was registered in Marjorie Tocao's name.
Theparties agreed that Anay would be entitled to:
(1) ten percent (10%) of the annual net profits of the business;
(2) overriding commission ofsix percent (6%) of the overall weekly production; (3) thirty
percent
(30%) of the sales she would make; and
(4) two percent (2%) for herdemonstration services. The agreement was not reduced to writing,
likewise, the parties agreed that Belo's name should not appear in any documentsrelating to
their transactions with West Bend Company. Anay secured the distributorship of cookware
products from the West BendCompany and organized the administrative staff and the sales
force, the cookware business took off successfully with West Bend.In 1987, Anay learned that
Marjorie Tocao had signed a letter addressed to the Cubao sales office informing to the effect
thatshe was no longer the vice-president of Geminesse Enterprise. Anay wrote Belo twice to
demand her overriding commission for the periodof January 8, 1988 to February 5, 1988 and
the audit of the company to determine her share in the net profits. Anay still received her
fivepercent (5%) overriding commission up to December 1987. The following year, 1988, she
did not receive the same commission although thecompany netted a gross sales of P
13,300,360.00.On April 5, 1988, Nenita A. Anay filed Civil Case No. 88-509, a complaint for
sum of money with damages against MarjorieD. Tocao and William Belo before the Regional
Trial Court of Makati, Branch 140. Tocao and Belo, in their Answer responded that thealleged
agreement was not reduced to writing nor ratified therefore either unenforceable or void or
inexistent and that Anay was only amarketing demonstrator for a renumeration. The trial court
held that there was an "oral partnership agreement between the plaintiff and the defendants and
thereforegranted damages. The Court of Appeals affi rmed the lower court’s decision; hence,
the petition.
ISSUES:
1. Whether there is a partnership.2. Whether respondent is entitled to the payment of damages
upon her expulsion from the partnership.
RULING:
1. Yes, the parties involved in this case formed a partnership. The Supreme Court held that to be
considered a juridicalpersonality, a partnership must fulfill these requisites:
(1) two or more persons bind themselves to contribute money, property or industry toa
common fund; and
(2) intention on the part of the partners to divide the profits among themselves. It may be
constituted in any form; apublic instrument is necessary only where immovable property or real
rights are contributed thereto. This implies that since a contract of partnership is consensual, an
oral contract of partnership is as good as a written one. It did not matter that the agreement was
not in writing because Article 1771 of the Civil Code provides that a partnership may be
"constituted in any form."In the case at hand, Belo acted as capitalist while Tocao as president
and general manager, and Anay contributed expertise tothe partnership and hence, under the
law, she was the industrial or managing partner. Furthermore, Anay was entitled to a percentage
of thenet profits of the business.

2. Yes, the Supreme Court noted that a partner who is excluded wrongfully from a partnership
is an innocent partner. Hence,the guilty partner must give him his due upon the dissolution of
the partnership as well as damages or share in the profits "realized from theappropriation of the
partnership business and goodwill." An innocent partner thus possesses "pecuniary interest in
every existing contractthat was incomplete and in the trade name of the co-partnership and
assets at the time he was wrongfully expelled. The partnership exists until dissolved under the
law. Since the partnership created by petitioners and private respondent hasno fixed term and is
therefore a partnership at will predicated on their mutual desire and consent, it may be dissolved
by the will of a partner. Thus:
“
The right to choose with whom a person wishes to associate himself is the very foundation and
essence of that partnership.
Its continued existence is, in turn, dependent on the constancy of that mutual resolve, along with
each partner’s capability to give it, and the absence of cause for dissolution provided by the law
itself. Verily, any one of the partners may, at his sole pleasure, dictate a dissolution ofthe
partnership at will. He must, however, act in good faith, not that the attendance of bad faith can
prevent the dissolution of the partnership but that it can result in a liability for damages."

ALFREDO N. AGUILA, JR, petitioner, vs.

HONORABLE COURT OF APPEALS and
FELICIDAD S. VDA. DE ABROGAR, respondents.
Facts:
-AC Aguila & Sons Co. (a partnership) thru petitioner, entered into a contact of sale of certain
real property, with right to repurchase, with the private respondent and her late husband, Ruben
M. Abrogar.
-Private respondent failed to repurchase the property within the grace period. Hence, pursuant
to the special power of attorney executed by the respondent in the event she failed to redeem the
properry, petitioner caused the cancellation of TCT No. 195101 and the issuance of a new
certificate of title in the name of A.C. Aguila and Sons, Co.
-Upon demand by the petitioner, respondent refused to vacate the property which led the
petitioner to file an ejectment case against her in the MTC- Marikina, Metro Manila which
decided in favor of the petitioner.
-Respondent then filed a petition for declaration of nullity of a deed of sale against petitioner
Alfredo N. Aguila, Jr.(manager of Aguila & Sons) with the RTC-Marikina, Metro Manila, she
averred that the signature of her husband was forged.
-RTC dismissed the case, but the CA reversed the decision saying that the transaction between
plaintiff-appellant and defendant-appellee is indubitably an equitable mortgage.
Issue:
WON the partnership Aguila & Sons is not necessary to pleaded in the petition for annulment
of Deed of Sale.

Held:
No, a partnership has a juridical personality separate and distinct from that of each of the
partners. The partners cannot be held liable for the obligations of the partnership unless it is
shown that the legal fiction of a different juridical personality is being used for fraudulent,
unfair, or illegal purposes. In this case, private respondent has not shown that A.C. Aguila &
Sons, Co., as a separate juridical entity, is being used for fraudulent, unfair, or illegal purposes.
Moreover, the title to the subject property is in the name of A.C. Aguila & Sons, Co. and the
Memorandum of Agreement was executed between private respondent, with the consent of her
late husband, and A. C. Aguila & Sons, Co., represented by petitioner. Hence, it is the
partnership, not its officers or agents, which should be impleaded in any litigation involving
property registered in its name. A violation of this rule will result in the dismissal of the
complaint.