HEIRS OF JOSE LIM, represented by
ELENITO LIM v.
JULIET VILLA LIM
G.R. No. 172690, 03 March 2010
Nachura, J.
DOCTRINE
A partnership exists when two or more persons
agree to place their money, effects, labor, and
skill in lawful commerce or business, with the
understanding that there shall be a proportionate
sharing of the profits and losses among them.
FACTS
A complaint for partition, accounting and
damages was filed by the Petitioner Heirs of
Jose Lim against the Respondent Juliet Villa
Lim, widow of the ELFLEDO Lim, who was the
eldest son of Jose and Cresencia Lim. The
Petitioners alleged that the deceased Jose Lim
and his friends, Jimmy Yu and Norberto Uy,
formed a partnership in 1980 to engage in the
trucking business with an initial contribution of ₱
50,000.00 each. Also in the same year, Jose
gave his eldest son, ELFLEDO, ₱ 50,000.00 as
the latter’s capital in the said partnership. Upon
Jose’s death, the heirs and partners agreed to
continue the business under the Management of
ELFLEDO. Further, the shares of the
partnership profits and income formed part of
the estate of Jose, held in trust by ELFLEDO.
The Petitioners’ gave ELFLEDO the authority to
use, purchase, and acquire properties using the
said funds. Thus, he was never a partner
thereof, but merely supervised and managed the
trucking business of the partners.
On the other hand, the Respondent claimed that
ELFLEDO was a partner, stating that Jose gave
him ₱ 50,000.00 as his capital to the
partnership. He managed the trucking business,
which flourished through his effort. Further, the
partnership was able to engage in other
business ventures and acquire real properties.
Thus, he was a partner separate and distinct
from Jose, especially after the latter died. His
assets arising from the now-ceased partnership
must not be subject of the complaint.
The Regional Trial Court (RTC) rendered its
decision in favor of the Petitioners. Aggrieved,
the Respondent appealed to the Court of
Appeals (CA). On appeal, the CA reversed the
RTC decision. Hence, this Petition.
ISSUE
Whether or not ELFLEDO was a partner of the
partnership formed by Jose and his friends.
RULING
The Court ruled in the affirmative. A partnership
exists when two or more persons agree to place
their money, effects, labor, and skill in lawful
commerce or business, with the understanding
that there shall be a proportionate sharing of the
profits and losses among them. In determining
whether a partnership exists, Article 1769 of the
Civil Code provides the rules to be applied. It
specifically provides under Paragraph 4 that the
receipts by a person of a share of the profits of a
business is a prima facie evidence that he is a
partner in the business, but not such inference
shall be drawn if such profits were received in
payment: (a) as a debt by installment or
otherwise; (b) as wages of an employee or rent
to a landlord; (c) as an annuity to a widow or
representative of a deceased partner; (d) as
interest on a loan, though the amount of
payment vary with the profits of the business;
and, (e) as the consideration for the sale of a
goodwill of a business or other property by
installments or otherwise.
Applying the legal provision above-mentioned, it
was clearly established that ELFLEDO himself
was the partner of Jimmy and Norberto through
the following circumstances: (1) Jose gave
ELFLEDO ₱ 50,000.00 as share in the
partnership; (2) Elfedeo ran the affairs of the
partnership, having absolute control, power, and
authority without any intervention from the
Petitioners; (3) all of the properties of the
partnership were registered under the name of
ELFLEDO; (4) ELFLEDO did not receive wages
or salaries from the partnership, indicating that
he was actually receiving shares of the profits of
the business; and (5) none of the Petitioners
demanded periodic accounting accounting from
ELFLEDO during his lifetime. Thus, there is no
denying that ELFLEDO was a partner and not
merely hired in the partnership of the trucking
business.
DISPOSITIVE PORTION
Petition is DENIED. The decision of the CA is
AFFIRMED.