Santos v.

Arsenio
GR No. 135813

FACTS:
Nieves, Zabat, and Santos made an agreement that Santos would act as the financier of the business,
while Nieves acted as bookkeeper and Zabat as credit investigator, respectively. The three met Gregera,
whom represented Monte Maria, for a loan of the said corporation. After some time, however, Santos
and Nieves found out that Zabat was conducting his own private dealings another competing
corporation. Thus, Zabat was terminated as a partner.

Ultimately, Gregera protested for the recovery of his unpaid commissions. Thus, Santos filed a
complaint for the recovery of a sum of money and damages against Nieves Reyes and Arsenio Reyes
(who replaced Zabat) for allegedly misappropriating Gregera’s commission. Nieves contested that she
was a partner of Santos. She also contends that she was an industrial partner of the partnership with her
contributing her industry.

ISSUE:
Was there a partnership that existed between Santos, Nieves, and Zabat?

HELD:
Yes. The Supreme Court Laid down a Decision in the Affirmative.

In the case at bar, Nieves acted as an Industrial Partner in which the partnership cannot exist if not for
his services rendered. The Partnership exist even without the formalities between the Three Partners.

Hence, The Partnership is not Dissolve upon the termination of Zabat because it does not undergoe the
proper procedure for Dissolution.
Yulo v. Yang Chiao Seng
GR No. 12541

Facts:
On 1945, Yang Chiao Seng proposed a partnership to the plaintiff Mrs. Rosario U. Yulo, to run and
operate a theatre in Manila.

Their Agreement is composed of the Following:

(1)Yang Chiao Seng shall pay Mrs. Yulo a monthly participation of P3,000
(2) that the partnership shall be for a period of two years.and six months, with a particular condition
(3) that Mrs. Yulo may conduct such business in the lobby of the building as is ordinarily carried on in
lobbies of theatres in operation,
(4) all improvements placed by the partnership shall belong to Mrs. Yulo,

Upon agreement by Mrs. Yulo & Yang, they executed a partnership agreement establishing
“Yang & Company, Ltd”. The capital is fixed at P100,000, P80,000 shouldered by Yang Chiao Seng
and P20,000, by Mrs. Yulo. All gains and profits are distributed among the partners in the same
proportion as their capital contribution.

Problem arised when the owner of the land canceled the contract of lease of Mrs Yulo.

The Municipal Court of Manila rendered judgment ordering the ejectment of Mrs. Yulo and Mr. Yang.

Issue WON the agreement was that of a contract of lease or partnership

Held: The agreement was a sublease not a partnership. The following are the requisites of partnership:

(1) two or more persons who bind themselves to contribute money, property or industry to a common
fund;
(2) the intention on the part of the partners to divide the profits among themselves (Article 1761, CC)

Plaintiff did not furnish the supposed P20,000 capitalnor did she furnish any help or intervention in the
management of the theatre.

Hence, The Petition is Dismissed.

Heirs of Tan Eng Kee v. Court of Appeals
GR No. 126881

FACTS:

Tan Eng Kee and Tan Eng Lay was alleged by the heirs of Tan Eng Kee to have formed a partnership
under the name Benguet Lumber.
When the said company was turned into a corporation, the heirs filed a complaint for the proper
accounting of the assets of the partnership

However, Tan Eng Lay contested that Tan Eng Kee was merely an employee and that Benguet Lumber
was his sole proprietorship. Thus, the heirs asserted that there was an oral formation of a partnership

Tan Eng Kee commanded and supervised the employees along with Tan Eng Lay;
Tan Eng Kee also determined the price at which the stocks were sold;
Tan Eng Kee also placed orders to the suppliers; and
Both partners’ families lived together in the same compound.
Tan Eng Lay, however, protested that:

Even a mere supervisor could give orders to subordinates;

Even a messenger can order materials from suppliers; and
Tan Eng Kee and Tan Eng Lay are brothers so that the privilege was accorded due to their personal
relations.

ISSUE:
Was a partnership formed based on the circumstances?

HELD:
No. The Court ruled in Negative.

The Case at Bar fall short in proving the existence of a Partnership.

Art. 1769 enumerated the rules in determining a partnership. In the case at bench, a contract of
partnership or articles of partnership – was non-existent.

Furthermore, the NCC provides that in case of real property or where the capital is more than
P3,000.00, the execution of a contract is necessary and that a public instrument must be executed.

Accordingly, The Contract is Void ab Initio and the petition is Dismissed.

CIR v. Sutter
GR No. L-25532

Facts:
A limited partnership, named "William J. Suter 'Morcoin' Co., Ltd.," was formed by herein respondent
William J. Suter as the general partner, and Julia Spirig and Gustav Carlson, as the limited partner and
was registered with SEC.

The partners contributed, respectively, P20,000.00, P18,000.00 and P2,000.00 to the partnership.

The firm engaged, among other activities, in the importation, marketing, distribution and operation of
automatic phonographs, radios, television sets and amusement machines, their parts and accessories

In 1948, however, general partner Suter and limited partner Spirig got married and, thereafter, on 18
December 1948, limited partner Carlson sold his share in the partnership to Suter and his wife.

In 1959, Commissioner of Internal Revenue 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.

The Court of Tax Appeals reversed the decision of the CIR.

Issues Ratio:
Whether or not the marriage of Suter and Spirig and their subsequent acquisition of the interests of
remaining partner Carlson in the partnership dissolved the limited partnership

No. The Court ruled in Negative

In the case at Bar, William J. Suter "Morcoin" Co., Ltd. was not a universal partnership, but a
particular one.

Hence, such marriage not being one of the causes provided for in the Law, The Petition is Dismissed.