JARANTILLA, JR. vs.

JARANTILLA
636 SCRA 299, G.R. No. 154486, December 1, 2010
FACTS:

The present case stems from the complaint filed by Antonieta Jarantilla against Buenaventura
Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla and Tomas Jarantilla, for the
accounting of the assets and income of the co-ownership, for its partition and the delivery of her share
corresponding to eight percent (8%), and for damages. Antonieta claimed that in 1946, she had entered
into an agreement with the defendants to engage in business through the execution of a document
denominated as "Acknowledgement of Participating Capital”.

Antonieta also alleged that she had helped in the management of the business they co-owned
without receiving any salary. Antonieta further claimed co-ownership of certain properties (the subject
real properties) in the name of the defendants since the only way the defendants could have purchased
these properties were through the partnership as they had no other source of income. The respondents
did not deny the existence and validity of the "Acknowledgement of Participating Capital" and in fact
used this as evidence to support their claim that Antonieta’s 8% share was limited to the businesses
enumerated therein. The respondents denied using the partnership’s income to purchase the subject
real properties. During the course of the trial at the RTC, petitioner Federico Jarantilla, Jr., who was one
of the original defendants, entered into a compromise agreement with Antonieta Jarantilla wherein he
supported Antonieta’s claims and asserted that he too was entitled to six percent (6%) of the supposed
partnership in the same manner as Antonieta was.

ISSUE:

Whether or not the partnership subject of the Acknowledgement of Participating Capital funded
the subject real properties.

HELD:

Under Article 1767 of the Civil Code, there are two essential elements in a contract of
partnership:

(a) an agreement to contribute money, property or industry to a common fund

(b) intent to divide the profits among the contracting parties.

The first element is undoubtedly present in the case at bar, for, admittedly, all the parties in this
case have agreed to, and did, contribute money and property to a common fund.

Hence, the issue narrows down to their intent in acting as they did. It is not denied that all the
parties in this case have agreed to contribute capital to a common fund to be able to later on share its
profits. They have admitted this fact, agreed to its veracity, and even submitted one common
documentary evidence to prove such partnership - the Acknowledgement of Participating Capital. The
petitioner himself claims his share to be 6%, as stated in the Acknowledgement of Participating Capital.
However, petitioner fails to realize that this document specifically enumerated the businesses covered
by the partnership: Manila Athletic Supply, Remotigue Trading in Iloilo City and Remotigue Trading in
Cotabato City. Since there was a clear agreement that the capital the partners contributed went to the
three businesses, then there is no reason to deviate from such agreement and go beyond the
stipulations in the document. There is no evidence that the subject real properties were assets of the
partnership referred to in the Acknowledgement of Participating Capital. Petition denied.
 BENJAMIN YU v. NLRC, GR No. 97212, 1993-06-30
Facts:

Petitioner Benjamin Yu was formerly the Assistant General Manager of the marble quarrying
and export business operated by a registered partnership with the firm name of "Jade Mountain
Products Company Limited" ("Jade Mountain").

The partnership business consisted of exploiting a marble deposit found on land owned by the
Sps. Ricardo and Guillerma Cruz, situated in Bulacan Province, under a Memorandum Agreement.

Benjamin Yu was hired by virtue of a Partnership Resolution dated 14 March 1985, as Assistant
General Manager with a monthly salary of P4,000.00. According to petitioner Yu, however, he actually
received only half of his stipulated monthly salary, since he had accepted the promise of the partners
that the balance would be paid when the firm shall have secured additional operating funds from
abroad.

Sometime in 1988, without the knowledge of Benjamin Yu, the general partners Lea Bendal and
Rhodora Bendal sold and transferred their interests in the partnership to private respondent Willy Co
and to one Emmanuel Zapanta. Mr. Yu Chang, a limited partner, also sold and transferred his interest in
the partnership to Willy Co. The partnership now constituted solely by Willy Co and Emmanuel Zapanta
continued to use the old firm name of Jade Mountain, though they moved the firm's main office from
Makati to Mandaluyong, Metropolitan Manila.

All the employees of the partnership continued working in the business. Benjamin Yu reported
to the Mandaluyong office for work and met private respondent Willy Co for the first time. Petitioner
was informed by Willy Co that the latter had bought the business from the original partners and that it
was for him to decide whether or not he was responsible for the obligations of the old partnership,
including petitioner's unpaid salaries. Petitioner was in fact not allowed to work anymore in the Jade
Mountain business enterprise. His unpaid salaries remained unpaid. Benjamin Yu filed a complaint for
illegal dismissal and recovery of unpaid salaries.

The partnership and Willy Co denied petitioner's charges, contending that Benjamin Yu was
never hired as an employee by the present or new partnership.

Labor Arbiter Nieves Vivar-De Castro rendered a decision holding that petitioner had been
illegally dismissed.

National Labor Relations Commission ("NLRC") reversed the decision of the Labor Arbiter and
dismissed petitioner's complaint.

The basic contention of petitioner is that the NLRC has overlooked the principle that a
partnership has a juridical personality separate and distinct from that of each of its members. Such
independent legal personality subsists, petitioner claims, notwithstanding changes in the identities of
the partners. Consequently, the employment contract between Benjamin Yu and the partnership Jade
Mountain could not have been affected by changes in the latter's membership.

Issues:

Whether or not the partnership which had hired petitioner Yu as Assistant General Manager had
been extinguished and replaced by a new partnership composed of Willy Co and Emmanuel Zapanta.

Ruling:

A withdrawing partner remains liable to a third party creditor of the old partnership. The liability
of the new partnership, upon the other hand, in the set of circumstances obtaining in the case at bar, is
established in Article 1840 of the Civil Code which reads as follows:

"Art. 1840. In the following cases creditors of the dissolved partnership are also creditors of the person
or partnership continuing the business:

(1) When any new partner is admitted into an existing partnership, or when any partner retires and
assigns (or the representative of the deceased partner assigns) his rights in partnership property to two
or more of the partners, or to one or more of the partners and one or more third persons, if the
business is continued without liquidation of the partnership affairs;
(2) When all but one partner retire and assign (or the representative of a deceased partner assigns) their
rights in partnership property to the remaining partner, who continues the business without liquidation
of partnership affairs, either alone or with others;

(3) When any Partner retires or dies and the business of the dissolved partnership is continued as set
forth in Nos. 1 and 2 of this article, with the consent of the retired partners or the representative of the
deceased partner, but without any assignment of his right in partnership property;

(4) When all the partners or their representatives assign their rights in partnership property to one or
more third persons who promise to pay the debts and who continue the business of the dissolved
partnership;

(5) When any partner wrongfully causes a dissolution and remaining partners continue the business
under the provisions of article 1837, second paragraph, No. 2, either alone or with others, and without
liquidation of the partnership... affairs;

(6) When a partner is expelled and the remaining partners continue the business either alone or with
others without liquidation of the partnership affairs;

When the business of a partnership after dissolution is continued under any conditions set forth
in this article the creditors of the retiring or deceased partner or the representative of the deceased
partner, have a prior right to any claim of the retired partner or the representative of the deceased
partner against the person or partnership continuing the business on account of the retired or deceased
partner's interest in the dissolved partnership or on account of any consideration promised for such
interest or for his right in partnership property.

Under Article 1840 above, creditors of the old Jade Mountain are also creditors of the new Jade
Mountain which continued the business of the old one without liquidation of the partnership affairs.
Indeed, a creditor of the old Jade Mountain, like petitioner Benjamin Yu in respect of his claim for
unpaid wages, is entitled to priority vis-a-vis any claim of any retired or previous partner insofar as such
retired partner's interest in the dissolved partnership is concerned. It is not necessary for the Court to
determine under which one or more of the above six (6) paragraphs, the case at bar would fall, if only
because the facts on record are not detailed with sufficient precision to permit such determination. It is,
however, clear to the Court that under Article 1840 above, Benjamin Yu is entitled to enforce his claim
for unpaid salaries, as well as other claims relating to his employment with the previous partnership,
against the new Jade Mountain.
 ROJAS VS MAGLANA, G.R.No. 30616, December 10, 1990
Facts:
Maglana and Rojas executed their Articles of Co-Partnership called Eastcoast Development
Enterprises (EDE). It was a partnership with an indefinite term of existence. Maglana shall manage the
business affairs while Rojas shall be the logging superintendent and shall manage the logging operation.
They shall share in all profits and loss equally. Due to difficulties encountered they decided to avail of
the sources of Pahamatong as industrial partners. They again executed their Articles of Co-Partnership
under EDE. The term is 30 years. After sometime Pamahatong sold his interest to Maglana and Rojas
including equipment contributed. After withdrawal of Pamahatong, Maglana and Rojas continued the
partnership. After 3 months, Rojas entered into a management contract with another logging enterprise.
He left and abandoned the partnership. He even withdrew his equipment from the partnership and was
transferred to CMS. He never told Maglana that he will not be able to comply with the promised
contributions and he will not work as logging superintendent. Maglana then told Rojas that the latter
share will just be 20% of the net profits. Rojas took funds from the partnership more than his
contribution. Thus, Maglana notified Rojas that he dissolved the partnership.

Issue: 

Whether or not there was a new partnership constituted at will after Pahamotang retired from
the second partnership. 

Held:

No. It was not the intention of the partners to dissolve the first partnership, upon the
constitution of the second one, which they unmistakably called “additional agreement.” Except for the
fact that they took in one industrial partner; gave him an equal share in the profits and fixed the term of
the second partnership to (30) years, everything else was the same. Otherwise stated even during the
existence of the second partnership, all business transactions were carried out under the duly registered
articles. No rights and obligations accrued in the name of the second partnership except in favor of
Pahamatong which was fully paid by the duly registered partnership.  
 EMNACE VS CA, G.R. No. 126334, November 23, 2001
FACTS:

Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a business concern
known as Ma. Nelma Fishing Industry. Sometime in January of 1986, they decided to dissolve their
partnership and executed an agreement of partition and distribution of the partnership properties
among them.

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.
Tabanao's filed against petitioner an action for accounting, payment of shares, division of assets and
damages.

ISSUE:

Whether or not the heirs of Vicente Tabanao Lacks the capacity to sue the petitioner.

HELD:

No. 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, which is a mode of
acquisition by virtue of which the property, rights and obligations to the extent of the value of the
inheritance of a person are transmitted. Moreover, respondents became owners of their respective
hereditary shares from the moment Vicente Tabanao died.