Republic of the Philippines v. Sunlife Assurance Co. of Canada G.R. No.

158085, October
14, 2005

Facts:

On October 20, 1997, Sun Life filed filed with the CIR its insurance premium tax return
and documentary stamp tax declaration returns and paid the total amount. On December 29,
1997, the CTA rendered its decision in Insular Life Assurance Co. Ltd. v. CIR, which held that
mutual life insurance companies are purely cooperative companies and are exempt from the
payment of premium tax and DST. This pronouncement was later affirmed by SC in CIR v.
Insular Life Assurance Company, Ltd. Sun Life surmised that. Hence, on August 20, 1999, Sun
Life filed with the CIR an administrative claim for tax credit of its alleged erroneously paid
premium tax and DST for the afforested tax periods. Both CTA and CA ruled that Sun Life was a
cooperative.

Issue:
Whether or not, Sun Life is a purely cooperative and was organized and conducted
solely by the members thereof for the exclusive benefit of each member and not for profit.

Ruling:
Yes. Sun Life is a cooperative.

It is operated with money collected from its members. Since respondent is composed entirely of
members who are also its policyholders, all premiums collected obviously come only from them.

The member-policyholders constitute “both insurer and insured” who “contribute, by a system of
premiums or assessments, to the creation of a fund from which all losses and liabilities are
paid.” The premiums pooled into this fund are earmarked for the payment of their indemnity and
benefit claims. It is licensed for the mutual protection of its members, not for the profit of
anyone.

A mutual life insurance company is conducted for the benefit of its member-policyholders, who
pay into its capital by way of premiums. To that extent, they are responsible for the payment of
all its losses.

Ortega v. Court of Appeals, G.R. No. 109248, July 3, 1995

Facts:

Petitioner filed with this Commission’s Securities Investigation and Clearing Department
(SICD) a petition for dissolution and liquidation of partnership. The hearing officer rendered a
decision ruling that petitioner’s withdrawal from the law firm Bito, Misa & Lozada did not dissolve
the said law partnership. On appeal, the SEC en banc received the decision of the Hearing
Officer and held that the withdrawal of Atty. Misa had dissolved the partnership. To Commission
ruled that, being a partnership at will, the law firm could be dissolved by any partner at any time,
such as by his withdrawal therefrom, regardless of good faith or bad faith, since no partner can
be forced to continue in the partnership against his will. On appeal, the CA affirmed in toto the
SEC decision and order appealed from.

Issue:
Whether or not the CA has erred in holding that the partnership is a partnership at will.

Ruling:
Yes. Sun Life is a cooperative.

NO. The CA did not err in holding that the partnership is a partnership at will since the
partnership agreement did not provide for a specified period or undertaking.

The birth and life of a partnership at will is predicated on the mutual desire and consent of the
partners. The right to choose with whom a person wishes to associate himself is the very
foundation and essence of that partnership. Its continued existence is, in turn, dependent on the
constancy of that mutual resolve, along with each partner’s capability to give it, and the absence
of a cause for dissolution provided by the law itself. In this case, the partnership agreement did
not provide for a specified period or undertaking. The purpose of the partnership is not the
specific undertaking referred to in the law. Otherwise, all partnerships which necessarily must
have a purpose, would all be considered as partnerships for a definite undertaking..