15. Santos v. Sps.

Arsenio and Nieves Reyes Was there a partnership that existed between
Santos, Nieves, and Zabat?
G.R. No. 135813; October 25, 2001
Held:

Facts: Yes. The Court held that there was indeed a

partnership as applying the NCC definition on
Pursuant to a lending business venture proposed
partnerships. The Court agreed with Nieves in
by Nieves Reyes, Zabat introduced Santos and
that she acted as an industrial partner without
Nieves to each other. The three then made an
which the business could not have operated. The
agreement that Santos would act as the financier
partnership indeed existed despite the lack of
of the business, while Nieves acted as
formalities regarding their business relationship
bookkeeper and Zabat as credit investigator,
and corresponding interests – which were
respectively. The three met Gregera, whom
ultimately and merely formalized as shown by the
represented Monte Maria, for a loan of the said
Articles of Agreement executed with Gregera
corporation with Gregera receiving commission.
defining the share of profits and corresponding
After some time, however, Santos and Nieves
obligations of each party. Moreover, the
found out that Zabat was conducting his own
termination of Zabat technically dissolved the first
private dealings another competing corporation.
partnership, but the said partnership is said to
Thus, Zabat was terminated as a partner.
have continued in existence since it had not
Ultimately, Gregera protested for the recovery of undergone the proper procedure relative to
his unpaid commissions. Thus, Santos filed a dissolution.
complaint for the recovery of a sum of money and
16. Moran Jr. v. CA G.R. No. L-59956 October
damages against Nieves Reyes and Arsenio
31, 1984
Reyes (who replaced Zabat) for allegedly
misappropriating Gregera’s commission. Nieves Facts:
contested that she was a partner of Santos and
On February 22, 1971 Pecson and Moran entered
that she merely received her share in the profits
into an agreement whereby both would contribute
as proven by the execution of an agreement with
P15,000 each for the purpose of printing 95,000
Gregera which showed that she was a partner
posters featuring the delegates to the 1971
with a share in the profits of the agreement. She
Constitutional Convention, with Moran actually
also averred that she was an industrial partner of
supervising the work; that Pecson would receive
the partnership with her contributing her industry.
a commission of P1,000 a month starting on April
Santos, nevertheless, maintained that Nieves was 15, 1971 up to December 15, 1971; that on
merely an employee and that he merely secured December 15, 1971, a liquidation of the accounts
her services as bookkeeper. His real partnership in the distribution and printing of the 95,000
was with Gregera. posters would be made; that Pecson gave Moran
P10,000 for which the latter issued a receipt; that
Issue:
only a few posters were printed; that on or about
May 28, 1971, Moran executed in favor of Pecson
a promissory note in the amount of P20,000 Whether or not CA grievously erred in holding
payable in two equal installments (P10,000 petitioner liable to respondent in the sum of
payable on or before June 15, 1971 and P10,000 P8,000, as supposed commission in the
payable on or before June 30, 1971), the whole partnership arising out of Pecson's investment;
sum becoming due upon default in the payment
Whether or not CA grievously erred in holding
of the first installment on the date due, complete
petitioner liable to respondent in the sum of
with the costs of collection."
P7,000 as a supposed return of investment in a
Pecson filed with the CFI of Manila alleging that: magazine venture.
(1) on the alleged partnership agreement, the
Held:
return of his contribution of P10,000.00, payment
of his share in the profits that the partnership The rule is, when a partner who has undertaken

would have earned, and, payment of unpaid to contribute a sum of money fails to do so, he

commission; (2) on the alleged promissory note, becomes a debtor of the partnership for whatever

payment of the sum of P20,000.00; and, (3) moral he may have promised to contribute and for

and exemplary damages and attorney's fees. CFI interests and damages from the time he should

held that ordering defendant Isabelo C. Moran, Jr. have complied with his obligation. Thus in Uy v.

to return to plaintiff Mariano E. Pecson the sum of Puzon (19 SCRA 598), which interpreted Art.

P17,000.00, with interest at the legal rate from the 2200 of the Civil Code of the Philippines, the

filing of the complaint on June 19, 1972. Parties Court allowed a total of P200,000.00

appealed to the CA which rendered a decision compensatory damages in favor of the appellee

against the petitioner to pay: Forty-seven because the appellant therein was remiss in his

thousand five hundred (P47,500) (the amount that obligations as a partner and as prime contractor

could have accrued to Pecson under their of the construction projects in question.

agreement); (b) Eight thousand (P8,000), (the

commission for eight months); (c) Seven
Being a contract of partnership, each partner
thousand (P7,000) (as a return of Pecson's
must share in the profits and losses of the
investment for the Veteran's Project); and (d)
venture. That is the essence of a partnership. And
Legal interest on (a), (b) and (c) from the date the
even with an assurance made by one of the
complaint was filed (up to the time payment is
partners that they would earn a huge amount of
made).
profits, in the absence of fraud, the other partner
cannot claim a right to recover the highly

Issues: speculative profits. It is a rare business venture

guaranteed to give 100% profits. The records
Whether or not CA grievously erred in holding
show that the private respondent gave
petitioner liable to respondent in the sum of
P10,000.00 to the petitioner. The latter used this
P47,500 as the supposed expected profits due
amount for the printing of 2,000 posters at a cost
him;
of P2.00 per poster or a total printing cost of
P4,000.00. The records further show that the
2,000 copies were sold at P5.00 each. The gross J.M Menzi, together with his family, owns 99% of
income therefore w as P10,000.00. Deducting the the capital stock of Menzi & Co, Inc. together with
printing costs of P4,000.00 from the gross income two others constituting the board of directors.
of P10,000.00 and with no evidence on the cost Among various businesses, Menzi & Co, Inc. is
of distribution, the net profits amount to only also engaged in the fertilizer business, which they
P6,000.00. Relative to the second alleged error, sell along with the other products they offer under
the petitioner submits that the award of P8,000.00 the company.
as Pecson's supposed commission has no
In preparation of fertilizers, they secured the
justifiable basis in law. The partnership
services of Francisco Bastida to superintend the
agreement stipulated that the petitioner would
operations of mixing the fertilizers with an
give the private respondent a monthly
agreement of giving a a 35% share (from the
commission of P1,000.00 from April 15, 1971 to
original 50%) in the sales of fertilizers prepared
December 15, 1971 for a total of eight monthly
by him – with the corporation having sole
commissions. The agreement does not state the
responsibility of accounting for their finances and
basis of the commission. The payment of the
distribution, including Bastida’s share in the
commission could only have been predicated on
profits.
relatively extravagant profits.
Bastida was not re-employed upon the expiration
There is misapprehension of facts. The evidence
of his contract with Menzi & Co. However, Bastida
of the private respondent himself shows that his
averred that the contract existing between him
investment in the "Voice of Veterans" project
and the corporation was that of a partnership for
amounted to only P3,000.00. The remaining
having contributed his industry in exchange of
P4,000.00 was the amount of profit that the
35% in the share of profits.
private respondent expected to receive.
Thus, he filed a complaint to have Menzi & Co
The respondent court erred when it concluded
give a proper accounting of his share and that the
that the project never left the ground because the
books should be revealed to him. Furthermore,
project did take place. Only it failed. It was the
for being a partner, he further prays to have his
private respondent himself who presented a copy
share in the goodwill and trademark of the
of the book entitled "Voice of the Veterans" in the
partnership.
lower court as Exhibit "L". Therefore, it would be
error to state that the project never took place and Issue:

on this basis decree the return of the private Was a partnership formed between Bastida and
respondent's investment. Menzi & Co?

17. Bastida v. Menzi & Co. Held:

G.R. No. L-354840; March 31, 1993 No. The Court held that no partnership was
formed and that Bastida was merely an employee

Facts: of Menzi & Co. The Court maintained that

although Bastida had a share of 35% in the net
profits of the fertilizer business in compensation
for his services of supervising the mixture of the
fertilizers, neither the provisions of the contract
nor the conduct of the parties justified the finding
that it was a contract of partnership.
Bastida never made any objection as to the
defendant’s manner of keeping the accounts or to
the charges. On the contrary, he approved and
signed every year the balance sheet and the
profit and loss statement. It was only when
plaintiff’s contract was about to expire and his
contract was not to be renewed that he made
objections. To this, the court applied Art. 116 of
the Code of Commerce – which required a
common fund to form a partnership. In the case at
bar, there was no common fund belonging to the
parties as joint owners or partners.
18. Heirs of Tan Eng Kee v. Court of Appeals
G.R. No. 126881; October 3, 2000
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.
Thus, when the said company was turned into a
corporation, Benguet Lumber Company, the heirs
filed a complaint for the proper accounting of the
assets of the partnership transferred to the
corporation and their shares of the decedent
partner Tan Eng Kee as heirs.
However, Tan Eng Lay contested that Tan Eng
Kee was merely an employee and that Benguet
Lumber was his sole proprietorship. Thus, the
heirs averred that there was an oral formation of a
partnership on the basis that:
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 held that a partnership was not
formed considering the circumstances. While the
Court acknowledged that an oral and unwritten
partnership may indeed be formed, the Court held
that the circumstances in the case at bar falls
short of proving the existence of a partnership.
Art. 1769 was applied which enumerated the
rules in determining a partnership. In this case,
the best evidence of a partnership – 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 The petitioner failed to render proper accounting
executed. of the partnership. Thus, the private respondents
filed a complaint for the petitioner to render
While it can be said that the NCC was still not in
proper accounting, and for the respondents to be
effect when the supposed partnership was
given their proper share in the profits. The
formed, the other circumstances still fall short of
petitioner contended that there was no longer a
proving a partnership.
partnership existing between him and the
Aside from respondents’ arguments, the Court respondents since
made notice of the fact that Tan Eng Kee never
The subsequent agreement expressly
asked for accounting to assess his share in the
superseded the former agreement;
profits and losses. Moreover, the alleged
contribution of Tan Eng Kee of 80 pieces of G.I. The subsequent agreement no longer referred to
sheets is insufficient to prove the existence of a as “capital investments”; and
partnership since co-ownership or co-possession
The subsequent agreement was indicated that
is not an indicium of the existence of a
the business was in the nature of a sole
partnership.
proprietorship.
19. Estanislao v. Court of Appeals
Issue:
G.R. No. L-49982; April 27, 1988
Did the subsequent agreement terminate the
existing partnership between the petitioner and
Facts: the respondents?

The petitioner and the private respondents were Held:

siblings who co-owned a certain lot in QC, which
No. The Court held that the subsequent
were being leased to Shell. They agreed to open
agreement did not terminate the partnership. The
and operate a gas station with an initial
Court maintained that the provision containing the
investment of P15,000.00 to be taken from the
terms, “cancels and supersedes” only refers to
advance rentals due to them from SHELL. Thus,
the P15,000.00 amount which moved the date
a joint affidavit was executed stating that the
from May 24, 1996 from May 25, 1996.
advanced rentals would redound to the “capital
investment” for the operation of the partnership. Furthermore, while the term “capital investment”

Consequently, the petitioner and the respondents was no longer retained in the new agreement,

executed another document entitled “Additional and that the agreement speaks of the petitioner

Cash Pledge Agreement”, with Shell as a as the sole dealer, there still was no cancellation

signatory, indicating that the advanced rentals of of the partnership since these adjustments were

the same amount would start on May 24, 1966, only proper since shell was a signatory and it was

rather than May 25, 1996 of the earlier against their company policy that business would

agreement. be a partnership and not a sole proprietorship.

Lastly, the Court made notice of the fact that the

petitioner himself gave periodic accounting of the
business, allowed authority to the respondent to part, petitioners admitted they had a trucking
examine and audit the accounts. Clearly, business in the 1950s but denied employing
therefore, they bound themselves to contribute helpers and drivers. They contend that private
money to a common fund with the intention of respondent was not illegally dismissed as a driver
dividing the profits among themselves. because he was in fact petitioner’s industrial
partner. They add that it was not until the year
20. SY vs. COURT OF APPEALS
1994, when SBT Trucking Corporation was
[G.R. No. 142293. February 27, 2003]
established, and only then did respondent Sahot
Facts:  become an employee of the company, with a

Sometime in 1958, private respondent Jaime monthly salary that reached P4,160.00 at the time

Sahot[5] started working as a truck helper for of his separation. The NLRC and the CA ruled

petitioners’ family-owned trucking business that Sahot was an employee of the petitioner.

named Vicente Sy Trucking. In 1965, he became  

a truck driver of the same family business,
Issue: Whether Sahot is an industrial partner
renamed T. Paulino Trucking Service, later 6B’s
Trucking Corporation in 1985, and thereafter Ruling:
known as SBT Trucking Corporation since 1994.
No. Article 1767 of the Civil Code states that in a
Throughout all these changes in names and for
contract of partnership two or more persons bind
36 years, private respondent continuously served
themselves to contribute money, property or
the trucking business of petitioners. When Sahot
industry to a common fund, with the intention of
was 59 years old, he incurred several absences
dividing the profits among themselves. Not one of
due to various ailments. Particularly causing him
these circumstances is present in this case. No
pain was his left thigh, which greatly affected the
written agreement exists to prove the partnership
performance of his task as a driver. He inquired
between the parties. Private respondent did not
about his medical and retirement benefits with the
contribute money, property or industry for the
Social Security System (SSS) on April 25, 1994,
purpose of engaging in the supposed business.
but discovered that his premium payments had
There is no proof that he was receiving a share in
not been remitted by his employer.Sahot filed a
the profits as a matter of course, during the period
week-long leave to get medical attention. He was
when the trucking business was under operation.
treated for EOR, presleyopia, hypertensive
Neither is there any proof that he had actively
retinopathy G II and heart enlargement. Because
participated in the management, administration
of such, Belen Paulino of the SBT Trucking
and adoption of policies of the business. Thus,
Service management told him to file a formal
the NLRC and the CA did not err in reversing the
request for extension of his leave. When Sahot
finding of the Labor Arbiter that private
applied for an extended leave, he was threatened
respondent was an industrial partner from 1958 to
of termination of employment should he refuse to
1994. On this point, the Court affirmed the
go back to work. Eventually, Sahot was dismissed
findings of the appellate court and the NLRC.
from employment which prompted the latter to file
Private respondent Jaime Sahot was not an
an illegal dismissal case with the NLRC. For their
industrial partner but an employee of petitioners
from 1958 to 1994. The existence of an employer-
employee relationship is ultimately a question of
fact and the findings thereon by the NLRC, as
affirmed by the Court of Appeals, deserve not
only respect but finality when supported by
substantial evidence. Substantial evidence is
such amount of relevant evidence which a
reasonable mind might accept as adequate to
justify a conclusion.
21. Heirs of Lim v. Lim
G.R. No. 172690; March 3, 2010
Facts:
Jose, together with Jimmy Yu and Norberto Yu
formed a partnership to engage in a trucking
business. After a year, Jose died leaving the heirs
of Jose including Elfledo Lim, wherein the latter
continued with the management of the trucking
business.
Eventually, Lim died. Thus, the heirs of Jose filed
a complaint for their share in the profits as heirs
of Jose and the proper accounting of the
partnership from when Jose died and Elfledo
handled the partnership. They aver, based on the
testimony of the only surviving partner of the
business, Jimmy Yu, that Elfledo was not a
partner in the business.
However, Elfledo contended that he was indeed a
partner on the following basis:
Jose himself gave Elfledo P50,000.00 as a share
in the partnership;
Elfledo ran the affairs of the partnership, wielding
absolute control, power, and authority, without
any intervention or opposition whatsoever from
any of the petitioners;
Elfledo did not receive any wages or salaries;
that the heirs failed to demand periodic
accounting from Elfledo during his lifetime; and
all the properties of the business were registered
under the name of Elfledo.
Issue:
Was Elfledo a partner in the business?
Held:
Yes. The Court held that Elfledo was indeed a
partner in the business. The Court had the view
that the sole testimony of Jimmy Yu that Elfledo
was a not a partner cannot establish such fact in
the absence of any other evidence.
The Court must apply the rule on preponderance
of evidence (Rule 133, Section 1) and Art. 1769
of the NCC. The Court agreed with all of the facts
raised by Elfledo in establishing that he is a
partner. Furthermore, the Court maintains that
demand for periodic accounting is evidence of
partnership.
22. Arbes v. Polistico
G.R. No. 31057; September 7, 1929
Facts:
An association called “Turnuhan Polistico & Co”
was deemed by the court-appointed
commissioner, to which the court declared as
well, as an unlawful partnership. The defendants
objected to the trial court’s report. Consequently,
they filed a motion for a charitable institution to be
included as a party defendant applying the
provisions of Art. 1666 of the NCC which
provides:
“A partnership must have a lawful object and
must be established for the common benefit of
the partners. When the dissolution of an unlawful
partnership is decreed, the profits shall be given
to charitable institutions of the domicile of the
partnership, or, in default of such, to those of the
province.”
Issue:
May a charitable institution be a party defendant
based on the provisions of Art. 1666?
Held:
No. The Court held that the application for the
said article is improper.  An unlawful partnership
is a void contract, and as such, no right or cause
of action can flow from it.
The Court made reference to Manresa which
propounded that the relevant logic that members
of an unlawful partnership should not be able to
recover profits since in the eyes of the law, the
partnership had not come into existence and that
no judicial action may flow from the contract.
However, such members may recover what they
have contributed not on the basis of the contract,
but on the basis of the mere contribution they
have made on the capital and to disable them to
do so would be an unjust sanction.
23. Woodhouse v. Halili
G.R. No. L-4811; July 31, 1953
Facts:
The plaintiff and the defendant entered into a
written agreement that, in the future, they shall
organize a partnership for the bottling and
distribution of Mission soft drinks with the plaintiff
to act as industrial partner or manager, and the
defendant as capitalist.
The agreement was entered into after the plaintiff
intimated to the defendant that he had an
exclusive franchise that of the bottling and
distribution of the said soft drinks and that it would
be transferred to the partnership or the plaintiff
after they go to Mission’s main base of operations
in California. Unfortunately, upon arrival, the
defendant has come to know that the exclusive
rights for the plaintiff had not yet been secured
and was only about to be secured.
Thus, the defendant refused to go further with the
agreement. The plaintiff then filed a complaint for
the execution of a contract of partnership and a
share of 30% in the profits.
Issues:
Is the agreement null and void?
May the execution of a contract of partnership be
enforced?
Held:
1)  No. The Court held that the agreement is
binding. The Court concluded that the contract
cannot be null and void since the plaintiff’s
consent in entering the contract is not vitiated.
What was vitiated was his consent in allowing the
plaintiff 30% in the net share of the profits should
the partnership agreement push through, not the
contract itself.
2. No. The Court held that the plaintiff’s consent
to enter into the contract of partnership as
stipulated in the agreement is an obligation to do,
which cannot be forced by the Courts for being
unconstitutional. The contract itself indicated that
they shall enter into a partnership – in the future –
and not that the partnership was to be in force
after the conditions are fulfilled.

24. 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
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 immovable
properties, which should be executed in a public
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.
25. Evangelista & CO. v. Abad Santos
G.R. No. L-31684; June 28, 1973
Ponente: J. Makalintal
Facts:
On October 9, 1954 a co-partnership was formed
under the name of "Evangelista & Co." On June
land
7, 1955 the Articles of Co-partnership were
amended so as to include herein respondent,
Estrella Abad Santos, as industrial partner, with
herein petitioners Domingo C. Evangelista, Jr.,
Leonarda Atienza Abad Santos and Conchita P.
Navarro, the original capitalist partners, remaining
in that capacity, with a contribution of P17,500
each
On December 17, 1963 herein respondent filed
suit against the three other partners, alleging that
the partnership, which was also made a party-
defendant, had been paying dividends to the
partners except to her; and that notwithstanding
her demands the defendants had refused and
continued to refuse to let her examine the
partnership books or to give her information
regarding the partnership affairs or to pay her any
share in the dividends declared by the partnership
The defendants, in their answer, denied ever
having declared dividends or distributed profits of
the partnership; denied likewise that the plaintiff
ever demanded that she be allowed to examine
the partnership books; and by way of affirmative
defense alleged that the amended Articles of Co-
partnership did not express the true agreement of
the parties, which was that the plaintiff was not an
industrial partner; that she did not in fact licenses and permits were issued to and in favor
contribute industry to the partnership. of petitioner Dan Fue Leung as the sole
proprietor. Respondent Leung Yiu adduced
Issue:
evidence during the trial of the case to show that
Whether Abad Santos is entitled to see the Sun Wah Panciteria was actually a partnership
partnership books because she is an industrial and that he was one of the partners having
partner in the partnership contributed P4,000.00 to its initial

Held: establishment.Lower court ruled in favor of the

private respondent. Petitioner appealed the trial
Yes, Abad Santos is entitled to see the
court's amended decision. However,the
partnership books.
questioned decision was further modified and
The Supreme Court ruled that according to affirmed by the appellate court. 

Both the trial court and the appellate court

ART. 1299. Any partner shall have the right to a
declared that the private petitioner is a partner
formal account as to partnership affairs:
and is entitled to a share of the annual profits of
the restaurant. Hence, an appeal to the SC.The
(1)If he is wrongfully excluded from the
petitioner argues that private respondent
partnership business or possession of its property
extended 'financial assistance' to herein petitioner
by his co-partners;
at the time of the establishment of the Sun Wah
(2)If the right exists under the terms of any
Panciteria, in return of which private respondent
agreement;
allegedly will receive a share in the profits of the
(3)As provided by article 1807;
restaurant. It was, therefore, error for the
(4)Whenever other circumstances render it just
Appellate Court to interpretor construe 'financial
and reasonable."
assistance' to mean the contribution of capital by
a partner to a partnership.
In the case at hand, the company is estopped
from denying Abad Santos as an industrial Issue:

partner because it has been 8 years and the
company never corrected their agreement in
order to show their true intentions. The company
never bothered to correct those up until Abad
Santos filed a complaint.
26. Dan Fue Leung vs IAC and Leung Yiu
G.R. No. 70926 January 31, 1989
Facts:
Dan Fue Leung.The Sun Wah Panciteria was
registered as a single proprietorship and its
WON the private respondent is a partner of the
petitioner in the establishment of Sun Wah
Panciteria.
Held:
In essence, the private respondent alleged that
when Sun Wah Panciteria was established, he
gave P4,000.00 to the petitioner with the
understanding that he would be entitled to twenty-
two percent (22%) of the annual profit derived
from the operation of the said panciteria. These
allegations, which were proved, make the private
respondent and the petitioner partners in the
establishment of Sun Wah Panciteria because
Article 1767 of the Civil Code provides that"By the
contract of partnership two or more persons bind
themselves to contribute money, property or
industry to a common fund, with the intention of
dividing the profits among themselves".
Therefore, the lower courts did not err in
construing the complaint as one wherein the
private respondent asserted his rights as partner
of the petitioner in the establishment of the Sun
Wah Panciteria, notwithstanding the use of the
term financial assistance therein.SC affirmed
appellate court's decision and ordered the
dissolution of the partnership.
27. Lim Tanhu v. Hon. Jose R. Ramolete
G.R. No. L-40098; August 29, 1975
Ponente: J. Barredo
Facts:
Tan alleged that she is the widow of Tee Hoon
Lim Po Chuan, who was a partner in the
commercial partnership, Glory Commercial
Company with Antonio Lim Tanhu and Alfonso Ng
Sua". 
Defendant Antonio Lim Tanhu, Alfonso Leonardo
Ng Sua, Lim Teck Chuan, and Eng Chong
Leonardo, through fraud and machination, took
actual and active management of the partnership
and although Tee Hoon Lim Po Chuan was the
manager of Glory Commercial Company,
defendants managed to use the funds of the
partnership to purchase lands and buildings in the
cities of Cebu, Lapulapu, Mandaue, and the
municipalities of Talisay and Minglanilla.
She alleged in her complaint that after the death
of Tee Hoon Lim Po Chuan, the defendants,
without liquidation, continued the business of
Glory Commercial Company, by purportedly
organizing a corporation known as the Glory
Commercial Company, Incorporated and
sometime in the month of November, 1967,
defendants, particularly Antonio Lim Tanhu, by
means of fraud deceit, and misrepresentations
did then and there, induce and convince her to
execute a quitclaim of all her rights and interests,
in the assets of the partnership of Glory
Commercial Company.
Thereafter, in the year 1968-69, the defendants
who had earlier promised to liquidate the
aforesaid properties and assets in favor, among
others of plaintiff and until the middle of the year
1970 when the plaintiff formally demanded from
the defendants the accounting of real and
personal properties of the Glory Commercial
Company, defendants refused and stated that
they would not give the share of the plaintiff.
Issue:
Whether Tan has a right over the liquidated
properties of the partnership
Held:
No, Tan has no right over the liquidated
properties of the partnership
The Supreme Court held that there is no
alternative but to hold that plaintiff Tan Put's
allegation that she is the widow of Tee Hoon Lim
Po Chuan has not been satisfactorily established
and that, on the contrary, the evidence on record
convincingly shows that her relation with said
deceased was that of a common-law wife.
Moreover, the Supreme Court said that the lower
courts committed an error by awarding 1/3 of the
partnership properties to Tan because there has
been no liquidation proceedings yet. And if there
has not yet been any liquidation of
partnership, the only right plaintiff could have
would be to what might result after much
liquidation to belong to the deceased partner (her
alleged husband) and before this is finished, it is
impossible to determine, what rights or interest, if
any the deceased had.  1971 and May 24, 1971, respectively. Said notice
In other words, no specific amounts or properties
may be adjudicated to the heir or
representative of the deceased partner without
the liquidation being first terminated.
28. Ramnani v. CA
196 scra 731; May 7, 1991
Ponente: J. Gancayco
Facts:
Ishwar, Choithram and Navalrai, all surnamed
Jethmal Ramnani, are brothers of the full blood.
Ishwar and his spouse Sonya had their main
business based in New York. Realizing the
difficulty of managing their investments in the
Philippines they executed a general power of
attorney on January 24, 1966 appointing Navalrai
and Choithram as attorneys-in-fact, empowering
them to manage and conduct their business
concern in the Philippines
On February 1, 1966 and on May 16, 1966,
Choithram entered into two agreements for the
purchase of two parcels of land located in Barrio
Ugong, Pasig, Rizal, from Ortigas & Company,
Ltd. Partnership. A building was constructed
thereon by Choithram in 1966. Three other
buildings were built thereon by Choithram through
a loan of P100,000.00 obtained from the
Merchants Bank as well as the income derived
from the first building.
Sometime in 1970 Ishwar asked Choithram to
the account for the income and expenses relative to
these properties during the period 1967 to 1970.
Choithram failed and refused to render such
accounting. Thereafter, Ishwar revoked the
general power of attorney. Choithram and Ortigas
were duly notified of such revocation on April 1,
was also registered with the Securities and
Exchange Commission on March 29, 1971 and
legal
was published in the April 2, 1971 issue of The
Manila Times for the information of the general
public. 
Nevertheless, Choithram, transferred all rights
and interests of Ishwar and Sonya in favor of his
daughter-in-law, Nirmla Ramnani, on February
19, 1973.
On October 6, 1982, Ishwar and Sonya filed a
complaint against Choitram and/or spouses
Nirmla and Moti and Ortigas for reconveyance of
said properties or payment of its value and
damages.
Issue:
Whether Ishram can recover the entire properties
subject in the ligitation
Held:
No, Ishram cannot recover the entire properties
subject.
The Supreme Court held that despite the fact that
Choithram, et al., have committed acts which
demonstrate their bad faith and scheme to
defraud spouses Ishwar and Sonya of their
rightful share in the properties in litigation, the
Court cannot ignore the fact that Choithram must
have been motivated by a strong conviction that
as the industrial partner in the acquisition of said
assets he has as much claim to said properties as
Ishwar, the capitalist partner in the joint
venture.      

Choithram in turn decided to invest in the real

estate business. He bought the two (2) parcels of
land in question from Ortigas as attorney-in-fact
of Ishwar. Instead of paying for the lots in cash,
he paid in installments and used the balance of
the capital entrusted to him, plus a loan, to build
two buildings. Although the buildings were burned
later, Choithram was able to build two other
buildings on the property. He rented them out and
collected the rentals. Through the industry and
genius of Choithram, Ishwar's property was
developed and improved into what it is now.

Justice and equity dictate that the two share

equally the fruit of their joint investment and
efforts. Perhaps this Solomonic solution may
pave the way towards their reconciliation. Both
would stand to gain. No one would end up the
loser. After all, blood is thicker than water.