Case #1 EUFEMIA EVANGELISTA, MANUELA EVANGELISTA, and FRANCISCA

EVANGELISTA vs. THE COLLECTOR OF INTERNAL REVENUE and THE COURT OF TAX
APPEALS

FACTS:

Petitioners borrowed sum of money from their father (Sugar Daddy Material chz) and together
with their own personal funds they used said money to buy several real properties. They then
appointed their brother (Simeon) as manager of the said real properties with powers and
authority to sell, lease or rent out said properties to third persons. They realized rental income
from the said properties for the period 1945-1949.

On September 24, 1954 respondent Collector of Internal Revenue demanded the payment of
income tax on corporations, real estate dealer's fixed tax and corporation residence tax for the
years 1945-1949. The letter of demand and corresponding assessments were delivered to
petitioners hence they instituted the present case in the Court of Tax Appeals, with a prayer that
"the decision of the respondent contained in his letter of demand dated September 24, 1954" be
reversed, and that they be absolved from the payment of the taxes in question.

CTA denied their petition and subsequent MR and New Trials were denied. Hence this petition
for review.

ISSUE:

Whether or not petitioners have formed a partnership and consequently, are subject to Tax on
Corporations, Residence tax for corporations and the Real Estate Dealers Fixed Tax.

RULING:

YEZ NAMARN!

As to Tax on Corporation

Tthe issue hinges on the meaning of the terms "corporation" and "partnership," as used in
section 24 and 84 of said Code, the pertinent parts of which read:

SEC. 24. Rate of tax on corporations. —There shall be levied, assessed, collected, and paid
annually upon the total net income received in the preceding taxable year from all sources by
every corporation organized in, or existing under the laws of the Philippines, no matter how
created or organized but not including duly registered general co-partnerships a tax upon such
income equal to the sum of the following: . . .

SEC. 84 (b). The term 'corporation' includes partnerships, no matter how created or organized,
joint-stock companies, joint accounts (cuentas en participacion), associations or insurance
companies, but does not include duly registered general copartnerships. (compañias
colectivas).
The essential elements of a partnership are two, namely: (a) an agreement to contribute
money, property or industry to a common fund; and (b) intent to divide the profits among
the contracting parties. The first element is present in the case at bar because petitioners
have agreed to, and did, contribute money and property to a common fund. It was established
that their purpose was to engage in real estate transactions for monetary gain and then divide
the same among themselves, because of the following observations, among others: (1) Said
common fund was not something they found already in existence; (2) They invested the same,
not merely in one transaction, but in a series of transactions; (3) The aforesaid lots were not
devoted to residential purposes, or to other personal uses, of petitioners herein. Although, taken
singly, they might not suffice to establish the intent necessary to constitute a partnership, the
collective effect of these circumstances is such as to leave no room for doubt on the existence
of said intent in petitioners herein.

To begin with, the tax in question is one imposed upon "corporations” which are distinct and
different from "partnerships". When our Internal Revenue Code includes "partnerships"
among the entities subject to the tax on "corporations", said Code must imply, therefore,
to organizations which are not necessarily "partnerships", in the technical sense of the
term. Thus, for instance, section 24 of said Code exempts from the aforementioned tax "duly
registered general partnerships which constitute precisely one of the most typical forms of
partnerships in this jurisdiction. Likewise, as defined in section 84(b) of said Code, "the term
corporation includes partnerships, no matter how created or organized." This qualifying
expression clearly indicates that a joint venture need not be undertaken in any of the standard
forms, or in conformity with the usual requirements of the law on partnerships, in order that one
could be deemed constituted for purposes of the tax on corporations.

For purposes of the tax on corporations, our National Internal Revenue Code, includes these
partnerships — with the exception only of duly registered general co-partnerships — within the
purview of the term "corporation." It is, therefore, clear to our mind that petitioners herein
constitute a partnership, insofar as said Code is concerned and are subject to the income tax for
corporations

As to residence of tax for corporations

Considering that the pertinent part of this provision is analogous to that of section 24 and 84 (b)
of our National Internal Revenue Code. (yung nasa unahan ng ruling nitong digest) and that the
latter was approved on June 15, 1939, the day immediately after the approval of said
Commonwealth Act No. 465 (June 14, 1939), it is apparent that the terms "corporation" and
"partnership" are used in both statutes with substantially the same meaning. Consequently,
petitioners are subject, also, to the residence tax for corporations.

As to Real Estate Dealers Fixed Tax

Lastly, the records show that petitioners have habitually engaged in leasing the properties
above mentioned for a period of over twelve years. Thus, they are subject to the tax provided in
section 193 (q) of our National Internal Revenue Code, for "real estate dealers," inasmuch as,
pursuant to section 194 (s) thereof:

'Real estate dealer' includes any person engaged in the business of buying, selling, exchanging,
leasing, or renting property or his own account as principal and holding himself out as a full or
part time dealer in real estate or as an owner of rental property or properties rented or offered to
rent for an aggregate amount of three thousand pesos or more a year. . . (emphasis supplied.)

BAKIT BA KASI TAYO NAGRERECITE DITO EH NA SOSO-WHAT LANG NAMAN TAYO

CASE 2
G.R. No. L-7991. May 21, 1956.
PAUL MACDONALD, ET AL., Petitioners, vs. THE NATIONAL CITY BANK OF NEW YORK,
Respondent.
4 ang issues dito 😊

FACTS:
Ito ang overview para gets natin yung characters sa story: STASIKINOCEY is a
partnership doing business in San Juan, Rizal, and formed by Alan W. Gorcey, Louis F. da
Costa, Jr., William Kusik and Emma Badong Gavino. This partnership was denied registration in
the Securities and Exchange Commission, and while it is confusing to see in this case that the
CARDINAL RATTAN, sometimes called the CARDINAL RATTAN FACTORY, is treated as a co-
partnership, of which Defendants Gorcey and da Costa are considered general partners, we are
satisfied that, as alleged in various instruments appearing of record, said Cardinal Rattan is
merely the business name or style used by the partnership Stasikinocey.
Prior to June 3, 1949, Defendant Stasikinocey had an overdraft account with The National City
Bank of New York, a foreign banking association duly licensed to do business in the Philippines
which showed a balance of P6,134.92 against the Defendant Stasikinocey or the Cardinal
Rattan which account, due to the failure of the partnership to make the required payment, was
converted into an ordinary loan for which the corresponding promissory ‘joint note non-
negotiable’ was executed on June 3, 1949 by Louis F. da Costa for and in the name of the
Cardinal Rattan, Louis F. da Costa and Alan Gorcey. This promissory note was secured on
June 7, 1949, by a chattel mortgage (for 3 vehicles ito. Truck, sedan, tas pick-up)
executed by Louis F. da Costa, Jr., General Partner for and in the name of Stasikinocey, alleged
to be a duly registered Philippine partnership, doing business under the name and style of
Cardinal Rattan.
The mortgage deed was fully registered in RoD and among other provisions it contained the
following:
(a) That the mortgagor shall not sell or otherwise dispose of the said chattels without the
mortgagee’s written consent;
(b) That the mortgagee may foreclose the mortgage at any time, after breach of any condition
thereof, the mortgagor waiving the 30- day notice of foreclosure.
On June 7, 1949, the same day of the execution of the chattel mortgage aforementioned,
Gorcey and Da Costa executed an agreement purporting to convey and transfer all their rights,
title and participation in Defendant partnership to Shaeffer, allegedly in consideration of the
cancellation of an indebtedness of P25,000 owed by them and Defendant partnership to the
latter which transaction is said to be in violation of the Bulk Sales Law (Act No. 3952 of the
Philippine Legislature).
While the said loan was still unpaid and the chattel mortgage subsisting, Defendant partnership,
through Defendants Gorcey and Da Costa transferred to Defendant McDonald the Fargo truck
and Plymouth sedan on June 24, 1949. The Fargo pickup was also sold on June 28, 1949, by
William Shaeffer to Paul McDonald. (so nagkbentahan at nagkapasahan na ng mga sasakyan
kahit may lien na nga yung chattel hays). Paul Mcdonald, notwithstanding Plaintiff’s existing
mortgage lien, in turn transferred the Fargo truck and the Plymouth sedan to Benjamin
Gonzales.
The National City Bank of New York, Respondent herein, upon learning of the transfers made
by the partnership Stasikinocey to subsequent parties, filed a case against Stasikinocey to
recover credit and to foreclose the corresponding chattel mortgage. McDonald and Gonzales
were made Defendants because they claimed to have a better right over the pledged vehicle.
CFI Manila Ruling: Rendered judgment in favor of the Respondent, annulling the sale of the
vehicles in question to Benjamin Gonzales; Da Costa and Gorcey to pay to the Respondent
jointly and severally the sum of P6,134.92, with legal interest from the debt of the promissory
note involved; Petitioner Gonzales to deliver the vehicles in question to the Respondent for sale
at public auction if Da Costa and Gorcey should fail to pay the money judgment; sentencing Da
Costa, Gorcey and Shaeffers to pay to the Respondent jointly and severally any deficiency that
may remain unpaid should the proceeds of the sale not be sufficient sentencing Gorcey, Da
Costa, McDonald and Shaeffer to pay the costs.
Only Paul McDonald and Benjamin Gonzales appealed to the Court of Appeals which rendered
a decision the dispositive part.
CA Ruling: Affirmed and Modified CFI Ruling, relieving Appellant William Shaeffer of the
obligation of paying, jointly and severally, together with Alan W. Gorcey and Louis F. da Costa,
Jr., any deficiency that may remain unpaid after applying the proceeds of the sale of the said
motor vehicles which shall be undertaken upon the lapse of 90 days from the date this decision
becomes final, if by then Defendants Louis F. da Costa, Jr., and Alan W. Gorcey had not paid
the amount of the judgment debt. With this modification the decision appealed from is in all
other respects affirmed, with costs against Appellants. This decision is without prejudice to
whatever action Louis F. da Costa, Jr., and Alan W. Gorcey may take against their co-partners
in the Stasikinocey unregistered partnership.

ISSUES:
I
WHETHER OR NOT AN UNREGISTERED COMMERCIAL CO-PARTNERSHIP WHICH HAS
NO INDEPENDENT JURIDICAL PERSONALITY CAN HAVE A ‘DOMICILE SO THAT A
CHATTEL MORTGAGE REGISTERED IN THAT ‘DOMICILE’ WOULD BIND THIRD PERSONS
WHO ARE INNOCENT PURCHASERS FOR VALUE.
II
WHETHER OR NOT A CHATTEL MORTGAGE EXECUTED BY ONE OF THE MEMBERS OF
AN UNREGISTERED COMMERCIAL CO-PARTNERSHIP WITHOUT JURIDICAL
PERSONALITY INDEPENDENT OF ITS MEMBERS, NEED NOT BE REGISTERED IN THE
ACTUAL RESIDENCE OF THE MEMBERS WHO EXECUTED SAME
III
WHETHER OR NOT A A CHATTEL MORTGAGOR WHICH EXECUTES AN AFFIDAVIT OF
GOOD FAITH BEFORE A NOTARY PUBLIC OUTSIDE OF THE TERRITORIAL
JURISDICTION OF THE LATTER, THE AFFIDAVIT IS VOID AND THE CHATTEL
MORTGAGE IS NOT BINDING ON THIRD PERSONS WHO ARE INNOCENT PURCHASERS
FOR VALUE; 
IV
WHETHER OR NOT A LETTER AUTHORIZING ONE MEMBER OF AN UNREGISTERED
COMMERCIAL CO-PARTNERSHIP ‘TO MAKE ALL OFFICIAL AND BUSINESS
ARRANGEMENTS WITH THE NATIONAL CITY BANK OF NEW YORK IN ORDER TO
SIMPLIFY ALL MATTERS RELATIVE TO LCS CABLE TRANSFERS, DRAFTS, OR OTHER
BANKING MEDIUMS,’ WAS SUFFICIENT AUTHORITY FOR THE SAID MEMBER TO
EXECUTE A CHATTEL MORTGAGE IN ORDER TO GIVE THE BANK SECURITY FOR A
PRE-EXISTING OVERDRAFT, GRANTED WITHOUT SECURITY. WHICH THE BANK HAD
CONVERTED INTO A DEMAND LOAN UPON FAILURE TO PAY SAME AND BEFORE THE
CHATTEL MORTGAGE WAS EXECUTED.

RULING:

1. YES. While an unregistered commercial partnership has no juridical personality,

nevertheless, where two or more persons attempt to create a partnership failing to
comply with all the legal formalities, the law considers them as partners and the
association is a partnership in so far as it is a favorable to third persons, by reason of the
equitable principle of estoppel.

In Jo Chung Chang vs. Pacific Commercial Co., 45 Phil., 145, it was held “that although
the partnership with the firm name of ‘Teck Seing and Co. Ltd.,’ could not be regarded
as a partnership de jure, yet with respect to third persons it will be considered a
partnership with all the consequent obligations for the purpose of enforcing the rights of
such third persons.” Da Costa and Gorcey cannot deny that they are partners of the
partnership Stasikinocey, because in all their transactions with the Respondent they
represented themselves as such. Petitioner McDonald cannot disclaim knowledge of the
 partnership Stasikinocey because he dealt with said entity in purchasing two of the
vehicles in question through Gorcey and Da Costa.

As was held in Behn Meyer & Co. vs. Rosatzin, 5 Phil., 660, where a partnership not
duly organized has been recognized as such in its dealings with certain persons, it shall
be considered as “partnership by estoppel” and the persons dealing with it are estopped
from denying its partnership existence. The sale of the vehicles in question being void as
to Petitioner McDonald, the transfer from the latter to Petitioner Benjamin Gonzales is
also void, as the buyer cannot have a better right than the seller.

It results that if the law recognizes a defectively organized partnership as de facto as far
as third persons are concerned, for purposes of its de facto existence it should have
such attribute of a partnership as domicile. In Hung-Man Yoc vs. Kieng-Chiong-Seng, 6
Phil., 498, it was held that although “it has no legal standing, it is a partnership de facto
and the general provisions of the Code applicable to all partnerships apply to it.” The
registration of the chattel mortgage in question with the Office of the Register of Deeds
of Rizal, the residence or place of business of the partnership Stasikinocey being San
Juan, Rizal, was therefore in accordance with section 4 of the Chattel Mortgage Law.
Ito sabi ng SC with regard to issues 2 and 3: These two questions have become academic
by reason of the answer to the first question, namely, that as a de facto partnership,
Stasikinocey had its domicile in San Juan, Rizal.
It is noteworthy that the chattel mortgage in question is in the form required by law, and there is
therefore the presumption of its due execution which cannot be easily destroyed by the biased
testimony of the one who executed it. The interested version of Da Costa that the affidavit of
good faith appearing in the chattel mortgage was executed in Quezon City before a notary
public for and in the City of Manila was correctly rejected by the trial court and the Court of
Appeals. Indeed, cumbersome legal formalities are imposed to prevent fraud. As aptly pointed
out in El Hogar Filipino vs. Olviga, 60 Phil., 17, “If the biased and interested testimony of a
grantor and the vague and uncertain testimony of his son are deemed sufficient to overcome a
public instrument drawn up with all the formalities prescribed by the law then there will have
been established a very dangerous doctrine which would throw wide open the doors to fraud.”

4. YES. In view of the conclusion that Stasikinocey is a de facto partnership, and Da Costa
appears as a co-manager in the letter of Gorcey to the Respondent and in the promissory note
executed by Da Costa, and that even the partners considered him as such, as stated in the
affidavit of April 21, 1948, to the effect that “That we as the majority partners hereby agree to
appoint Louis da Costa co-managing partner of Alan W. Gorcey, duly approved managing
partner of the said firm,” the “partner” who executed the chattel mortgage in question must be
deemed to be so fully authorized. Section 6 of the Chattel Mortgage Law provides that when a
partnership is a party to the mortgage, the affidavit may be made and subscribed by one
member thereof. In this case the affidavit was executed and subscribed by Da Costa, not only
as a partner but as a managing partner.
There is no merit in Petitioners’ pretense that the motor vehicles in question are the common
property of Da Costa and Gorcey. Petitioners invoke article 24 of the Code of Commerce in
arguing that an unregistered commercial partnership has no juridical personality and cannot
execute any act that would adversely affect innocent third persons. Petitioners forget that the
Respondent is a third person with respect to the partnership, and the chattel mortgage executed
by Da Costa cannot therefore be impugned by Gorcey on the ground that there is no
partnership between them and that the vehicles in question belonged to them in common. As a
matter of fact, the Respondent and the Petitioners are all third persons as regards the
partnership Stasikinocey and even assuming that the Petitioners are purchasers in good faith
and for value, the Respondent having transacted with Stasikinocey earlier than the Petitioners, it
should enjoy and be given priority.
Wherefore, the appealed decision of the Court of Appeals is affirmed with costs against the
Petitioners.

CASE 3

Commission on Internal Revenue (CIR) VS. SUTER AND CTA G.R. No. L-25532
February 28, 1969
FACTS:
 A limited partnership named “William J. Suter 'Morcoin' Co., Ltd.," was formed on Sept.
30, 1947 by respondent William J. Suter as the general partner and Julia Spirig and Gustav
Carlson, as the limited partners. The partners contributed respectively P20,000.00, P18,000.00,
and P2,000.00 to the partnership. It was later registered with the Securities and Exchange
Commission. The firm engaged in the importation, marketing, distribution and operation of
automatic phonographs, radios, television sets and amusement machines, their parts and
accessories It had an office and held itself out as a limited partnership, handling and carrying
merchandise, using invoices, bills and letterheads bearing its trade-name, maintaining its own
books of accounts and bank accounts, and had a quota allocation with the Central Bank.
In 1948, Suter and Spirig got married. Later, limited partner Carlson sold his share in the
partnership to Suter and his wife. The sale was duly recorded with the SEC.
The limited partnership had been filing its income tax returns as a corporation, without
objection by petitioner CIR. However, in assessment in 1959, CIR consolidated the individual
incomes of partners-spouses resulting to deficiency income tax against Suter in the amount of
P2,678.06 for 1954 and P4,567.00 for 1955.
Respondent Suter protested the assessment, and requested its cancellation and
withdrawal, but this request was denied. On appeal to the CTA, it reversed the CIR.
ISSUE/S:
1. WON the corporate personality of the William J. Suter "Morcoin" Co., Ltd. should be
disregarded for income tax purposes, considering that respondent William J. Suter and
his wife, Julia Spirig Suter actually formed a single taxable unit?
2. WON the limited partnership was dissolved after the marriage of the partners,
respondent William J. Suter and Julia Spirig Suter and the subsequent sale to
them by the remaining partner, Gustav Carlson, of his participation of P2,000.00 in
the partnership for a nominal amount of P1.00. (MAIN ISSUE)
Petitioner’s Contention: The marriage of Suter and Spring and their subsequent acquisition of
the interests of remaining partner Carlson in the partnership dissolved the limited partnership
and if they did not, the fiction of juridical personality of the partnership should be disregarded for
income tax purposes because the spouses have exclusive ownership and control of the
business; consequently the income tax return of respondent Suter for the years in question
should have included his and his wife's individual incomes and that of the limited partnership.
Respondent’s Contention: Suter maintains, as the Court of Tax Appeals held, that his
marriage with limited partner Spirig and their acquisition of Carlson's interests in the partnership
in 1948 is not a ground for dissolution of the partnership, either in the Code of Commerce or in
the New Civil Code, and that since its juridical personality had not been affected and since, as a
limited partnership, as contra distinguished from a duly registered general partnership, it is
taxable on its income similarly with corporations, Suter was not bound to include in his individual
return the income of the limited partnership.
RULING: Petitioner’s appeal is NOT meritorious.
1. NO. Section 24 of the Internal Revenue Code merges registered general co-
partnerships (compañias colectivas) with the personality of the individual partners for income tax
purposes. However, the limited partnership's separate individuality makes it impossible to
equate its income with that of the component members.
As the limited partnership under consideration is taxable on its income, to require that
income to be included in the individual tax return of respondent Suter is to overstretch the letter
and intent of the law. In fact, it would even conflict with what it specifically provides in its Section
24: for the appellant Commissioner's stand results in equal treatment, tax wise, of a general
copartnership (compañia colectiva) and a limited partnership, when the code plainly
differentiates the two.
Thus, the code taxes the latter on its income, but not the former, because it is in the
case of compañias colectivas that the members, and not the firm, are taxable in their individual
capacities for any dividend or share of the profit derived from the duly registered general
partnership.
2. NO. The petitioner-appellant has evidently failed to observe the fact that William J.
Suter "Morcoin" Co., Ltd. was not a universal partnership, but a particular one, since the
contributions of the partners were fixed sums of money, P20,000.00 by William Suter and
P18,000.00 by Julia Spirig and neither one of them was an industrial partner. It follows that
William J. Suter "Morcoin" Co., Ltd. was not a partnership that spouses were forbidden to enter
by Article 1677 of the Civil Code of 1889.
Nor could the subsequent marriage of the partners operate to dissolve it, such marriage
not being one of the causes provided for that purpose either by the Spanish Civil Code or the
Code of Commerce.
The appellant's view, that by the marriage of both partners the company became a
single proprietorship, is equally erroneous. The capital contributions of partners William J. Suter
and Julia Spirig were separately owned and contributed by them before their marriage; and after
they were joined in wedlock, such contributions remained their respective separate property
under the Spanish Civil Code.
Thus, the individual interest of each consort in William J. Suter "Morcoin" Co., Ltd. did
not become common property of both after their marriage in 1948.
The difference in tax rates between the income of the limited partnership being
consolidated with, and when split from the income of the spouses, is not a justification for
requiring consolidation; the revenue code, as it presently stands, does not authorize it, and even
bars it by requiring the limited partnership to pay tax on its own income.
Petition is DISMISSED. Decision under review is affirmed.

Case 4

G.R. No. L-35469 March 17, 1932

E. S. LYONS, plaintiff-appellant,
vs.
C. W. ROSENSTOCK, Executor of the Estate of Henry W. Elser, deceased, defendant-
appellee.

Summary of the Case:

This action was instituted by E.S. Lyons against C.W. Rosenstock, as executor of H. W.
Elser, deceased, consequent upon the taking of an appeal by the executor from the allowance
of the claim sued upon by the committee on claims in the said estate. The action was filed to
recover four hundred fourty-six and two thirds shares of the stock of J.K. Pickering together with
the sum of P125,000, representing the dividends which accrued on said stock with lawful
interest. Trial court absolved the defendant executor from the complaint; plaintiff appealed.

Facts:

Henry W. Elser was engaged in buying, selling, and administering real estate. E. S. Lyons
joined him and the profits became shared by the two in equal parts.

Lyons, whose regular vocation was that of a missionary or missionary agent of the Methodist
Episcopal Church, went on leave to the United States and was gone for nearly a year and a
half. Elser made written statements showing that Lyons was, at that time, half owner with
Elser of three particular pieces of real property. Concurrently with this act Lyons execute in
favor of Elser a general power of attorney empowering him to manage and dispose of said
properties at will and to represent Lyons fully and amply, to the mutual advantage of both.

The attention of Elser was drawn to a piece of land, referred to as the San Juan Estate. He
obtained the loan of P50,000 to complete the amount needed for the first payment on the San
Juan Estate. The lender insisted that he should procure the signature of the Fidelity & Surety
Co. on the note to be given for said loan. Elser mortgaged to the Fidelity & Surety Co. the
equity of redemption in the property owned by himself and Lyons on Carriedo Street to secure
the liability thus assumed by it.

The case for the plaintiff supposes that, when Elser placed a mortgage for P50,000 upon the
equity of redemption in the Carriedo property, Lyons, as half owner of said property, became,
as it were, involuntarily the owner of an undivided interest in the property acquired partly by
 that money; and it is insisted for him that, in consideration of this fact, he is entitled to the four
hundred forty-six and two-thirds shares of J. K. Pickering & Company, with the earnings
thereon, as claimed in his complaint.

Issue: Whether or not there was a general relation of partnership.

Held:

No, there was no general relation of partnership and the position of the appellant is untenable.
If Elser had used any money actually belonging to Lyons in this deal, he would under article
1724 of the Civil Code and article 264 of the Code of Commerce, be obligated to pay interest
upon the money so applied to his own use.

Under the prevailing law in this jurisdiction a trust does not ordinarily attach with respect to
property acquired by a person who uses money belonging to another (Martinez vs. Martinez,
1 Phil., 647; Enriquez vs. Olaguer, 25 Phil., 641.). Of course, if an actual relation of
partnership had existed in the money used, the case might be different; and much emphasis
is laid in the appellant's brief upon the relation of partnership which, it is claimed, existed.

But there was clearly no general relation of partnership as defined under article 1678 of the
Civil Code. It is clear that Elser, in buying the San Juan Estate, was not acting for any
partnership composed of himself and Lyons, and the law cannot be distorted into a
proposition which would make Lyons a participant in this deal contrary to his express
determination.

It seems to be supposed that the doctrines of equity worked out in the jurisprudence of
England and the United States with reference to trust supply a basis for this action. The
doctrines referred to operate, however, only where money belonging to one person is used by
another for the acquisition of property which should belong to both; and it takes but little
discernment to see that the situation here involved is not one for the application of that
doctrine, for no money belonging to Lyons or any partnership composed of Elser and Lyons
was in fact used by Elser in the purchase of the San Juan Estate. Of course, if any damage
had been caused to Lyons by the placing of the mortgage upon the equity of redemption in the
Carriedo property, Elser's estate would be liable for such damage. But it is evident that Lyons
was not prejudice by that act.

Judgment appealed from is affirmed. Costs against appellant