Heirs of Jose Lim vs.

Lim
( Trucking Business )
F: Petitioners insists that Jose Lim was the
partner of Norberto and Jimmy and not
!f!edo (!ate husband of respondent) and
therefore a!! the properties ac"uired by
!f!edo and respondent form part of the
estate of Jose# ha$ing been deri$ed from the
a!!eged partnership%
&: '(N !f!edo is a partner of the said trucking
company%
):
The court app!ying *+,- of the .i$i!
.ode he!d that !f!edo is a partner%
.resencia Lim testified that /ose ga$e
!f!edo 01k# as share in the
partnership# on a date that coincided
with the payment of the initia! capita!
of the partnership
!f!edo ran the affairs of the
partnership# wie!ding abso!ute contro!#
power and authority# without
inter$ention or opposition whatsoe$er
of the petitioners herein2
3!! the properties particu!ar!y the -
trucks of the partnership were
registered in the name of !f!edo%
Jimmy testified that !f!edo did not
recei$e wages or sa!aries from the
partnership# indicating that what he
actua!!y recei$ed were shares of the
profits of the business2
None of the petitioners# as heirs of
Jose# the a!!eged partner# demanded
periodic accounting from !f!edo
during his !ifetime%
Philex Mining Corp vs. CIR
(Joint 4enture for 5ining)
F: Petitioner entered into an agreement with
Baguio 6o!d# where the former agreed to
manage the mining operations of the !atter%
The agreement was e$idenced by a 7Power
of 3ttorney8% &t was indicated in the said
document# that Baguio 6o!d wou!d contribute
P11M under its owner9s account p!us any of
its income that is !eft in the pro/ect# in
addition to its actual mining claim%
5eanwhi!e# petitioner9s contribution wou!d
consist of its expertise in the
management and operation of mines# as
we!! as the manager9s account which is
comprised of P11M in funds and property
and petitioner9s "compensation" as
manager that cannot be paid in cash%
The mining suffered serious !oses which
ended business of both parties e$idenced by
their e:ecution of a 7compromise
agreement%8
The .&; assessed Phi!e: 5ining for ta:
deficiencies% &t stressed that Phi!e: entered
into a partnership with Baguio 6o!d%
Petitioner denied the a!!egations of the .&;
and maintained that its ad$ances of money
and property to Baguio 6o!d were in a nature
of a !oan as e$idenced by the 7compromise
agreement8%
&: '(N Phi!e: and Baguio 5ining formed
partnership%
):
<es% The parties entered into the
compromise agreements as a
conse"uence of the disso!ution of their
business re!ationship% &t did not define
that re!ationship or indicate its rea!
character%
The re!ationship of the parties may be
g!eaned upon the 7power of attorney8
document entered between the =%
3n e:amination of the >Power of
3ttorney> re$ea!s that a partnership or
/oint $enture was indeed intended by
the parties% ?nder a contract of
partnership# two or more persons bind
themse!$es to contribute money#
property# or industry to a common
fund# with the intention of di$iding the
profits among themse!$es%
The term 7compensation8 found in the
said document cou!d not be deemed
as 7wages8% &t is impossib!e for a
company to gi$e a sa!ary to an
emp!oyee representing 01@ of its net
profit%
'hi!e a corporation# !ike petitioner#
cannot genera!!y enter into a contract
of partnership un!ess authoriAed by
!aw or its charter# it has been he!d that
it may enter into a /oint $enture which
is akin to a particu!ar partnership:
under Phi!ippine !aw# a /oint $enture is
a form of partnership and shou!d be
go$erned by the !aw of partnerships
Tocao vs. C
F: Petitioners maintain that there was no
partnership between petitioner Be!o# on one
hand# and respondent Nenita 3nay# on the
other hand2 and that the !atter being mere!y
an emp!oyee of petitioner Tocao% &t was
found out that Be!o sometimes wou!d
participate in 6eminesse nterprise
meetings to he!p petitioner Tocao%
&: '(N Be!o is a partner of Tocao%
):
No% Be!oBs presence in 6eminesse
nterpriseBs meetings was mere!y as
guarantor of the company and to he!p
Tocao his persona! friend%
;espondent herse!f professed !acked
of know!edge that petitioner Be!o
recei$ed any share in the profits of
6eminesse%
Cn the other hand# Tocao dec!ared
that Be!o was not entit!ed to any share
in the profits of the enterprise%
'ith no participation in the profits#
petitioner Be!o cannot be deemed a
partner2 since the essence of a
partnership is that the partners share
in the profits and !osses%
guila! Jr. vs. C
F: Petitioner is the manager of 3%.% 3gui!a D
Eons# .o# a partnership engaged in !ending
acti$ities% Pri$ate respondent Fe!icidad
3brogar entered into a 5C3 w( 3%.% 3"ui!a D
Eons in$o!$ing a pacto de retro sa!e of a
house D !ot% 3s pri$ate respondent fai!ed to
redeem the property within the prescribed
period# petitioner caused the cance!!ation of
T.T and the issuance of the new certificate
of tit!e in the name of the partnership%
Pri$ate respondent fi!ed a petition for a
dec!aration of the nu!!ity of the deed of sa!e
and a crimina! comp!aint for forgery against
petitioner a!!eging that the signature of her
husband was a forgery because he was
a!ready dead when the deed was supposed
to ha$e been e:ecuted%
Petitioner now contends that he is not the
rea! party in interest but 3%.% 3gui!a D .o%#
against which this case shou!d ha$e been
brought%
&: '(N petitioner is the rea! party in interest%
):
3rt% *+,F of the .i$i! .ode# a
partnership has a /uridica! persona!ity
separate and distinct from that of
each partner% The partners cannot be
he!d !iab!e for the ob!igations of the
partnership un!ess it is shown that the
!ega! fiction of a different /uridica!
persona!ity is being used for
fraudu!ent# unfair# or i!!ega! purposes%
&n this case% Pri$ate respondent has
not shown that 3%.% 3gui!a D Eons#
.o%# represented by petitioner% )ence#
it is the partnership# not its officers or
agents# which shou!d be imp!eaded in
any !itigation in$o!$ing property
registered in its name%
"rtega vs. C
F: Petitioner fi!ed a 5; for the decision of the
E. en banc which disso!$ed the partnership
of 7Bito# 5isa D LoAada8 upon withdrawa! of
3tty% Joa"uin L% 5isa% )e a!so asked for an
appointment of a recei$er to take o$er the
assets of the disso!$ed partnership and to
take charge of the winding up of its affairs%
&: '(N the .3 erred in ho!ding that the
withdrawa! of pri$ate respondent disso!$ed
the partnership regard!ess of his good or bad
faith%
):
The birth and !ife of a partnership at
wi!! is predicated on the mutua! desire
and consent of the partners% The right
to choose with whom a person wishes
to associate himse!f is the foundation
and essence of partnership%
&ts continued e:istence is# in turn#
dependent on the mutua! reso!$e#
a!ong with each partnerBs capabi!ity to
gi$e it# and the absence of a cause for
disso!ution pro$ided by !aw itse!f%
4eri!y# any one of the partners may# at
his so!e p!easure# dictate disso!ution of
the partnership at wi!!% )e must
howe$er# act in good faith not that the
attendance of bad faith can pre$ent
the disso!ution of the partnership at
wi!!%
In the matter of the Petition for
uthorit# To Continue use of the firm
name $"%aeta! Romulo! etc.
F: = separate petitions were fi!ed by the
sur$i$ing partners of 3tty% 3!e:ander Eycip
and the sur$i$ing partners of )erminiano
CAaeta# praying that they be a!!owed to
continue using# in the name of their firms#
the names of partners who passed away%
3rguments:
*% ?nder the !aw# a partnership is not
prohibited from continuing its business
under a firm name which inc!udes the
name of the deceased partner%( 3rt%
*FG1 of the .i$i! .ode )
=% &n regu!ating other professions# such
as accountancy and engineering# the
!egis!ature has authoriAed the
adoption of firm names without any
restriction as to the use# in such firm
name# of the deceased partner%
H% The .anons of Professiona! thics are
not transgressed because as adopted
by 3merican Bar 3ssociation: 7the
continued use of the name of a
deceased or former partner when
permissib!e by !oca! custom is not
unethica!# but care shou!d be taken
that no imposition or deception is
practiced through this use%8
G% The deaths of the partners were we!!I
pub!iciAed%
0% No !oca! custom prohibits the
continued use of the partnerBs name in
a professiona! firmBs name%
,% The continued use of the deceased
partnerBs name in the firm name of
!aw partnerships has been consistent!y
a!!owed by ?E .ourts%
&: '(N the names of the deceased
partners shou!d be a!!owed to continue in
use in the firm name%
):
73rt% *F*0% $ery partnership sha!!
operate under a firm name# which
may or may not inc!ude the name
of one or more of the partners%8
7Those who# not being members of
the partnership# inc!ude their
names in the firm name# sha!! be
sub/ect to the !iabi!ity of a partner%8
(partners shou!d be !i$ing persons
who can be sub/ected to !iabi!ity)
3rt% *FG1 treats more of a
commercia! partnership with a
good wi!! to protect rather than a
professiona! partnership# with no
sea!ab!e good wi!! but whose
reputation depends on the persona!
"ua!ifications of its indi$idua!
members%
The partnership for the practice of
!aw cannot be !ikened to
partnerships formed by other
professiona!s or for business% The
practice of !aw is a!so a specia!
pri$i!ege# high!y persona! and
partaking of the nature of a pub!ic
trust%
Firm names# under !oca! customs#
identify the more acti$e and more
senior members or partners of the
!aw firm%
The possibi!ity of deception upon
the pub!ic# rea!# or conse"uentia!#
where the name of a deceased
partner continues to be used
cannot be ru!ed out%
NB: ;u!e H%1= of the .P; appro$ed and
promu!gated by the E. on June =*#*-FF in
effect abandoned the ru!ing in the Eycip
case% (see 3rt% *F*0 .i$i! .ode)
Pascual vs. CIR
F: The petitioners Pascua! and dragon bought
0 parce!s of !and% The first = were so!d in
*-,F# whi!e the remaining H were so!d in
*-+1% Petitioners paid the corresponding
capita! gains ta:es on both sa!es a$ai!ing the
ta: amnesties way back in *-+G% )owe$er#
the .&; assessed and re"uired petitioners to
pay corporate income ta:es for the said
years% ;espondent insisted that in both
years# petitioners as coIowners in the rea!
estate transactions formed an unregistered
partnership ta:ab!e as corporation%
&: '(N petitioners formed a partnership in
both transactions%
):
No% There is no e$idence that the
petitioners entered into an agreement
to contribute money# property or
industry in a common fund# and that
they intended to di$ide the profits
among themse!$es% ;espondent .&;
/ust assumed these conditions to be
present on the basis of the fact that
petitioners purchased certain parce!s
of !and and became coIowners
thereof%
The transactions were iso!ated% The
character of habitua!ity pecu!iar to
business transactions for the purpose
of gain was not present%
The sharing of returns does not in
itse!f estab!ish a partnership whether
or not the persons sharing therein
ha$e a /oint or common right or
interest in the property% There must
be a c!ear intent to form a
partnership# the e:istence of a
/uridica! persona!ity different from the
indi$idua! partners# and the freedom
of each party to transfer or assign the
who!e property%
ur&ach vs. 'anitar# (ares
(Partnership2 Joint 4enture2 Foreign and
Jomestic .orp)
F: This conso!idated petition assai!ed the
decision of the .3 directing a certain
53NN; CF L.T&CN CF CFF&.;E &N T)
BC3;J CF J&;.TC;E
KThere are two groups in this case# the
Lag)ameo group composed of Fi!ipino
in$estors and the merican 'tan)ar) Inc%
(3E&) composed of foreign in$estors%
The 3E& 6roup and petitioner Ea!aAar (6%;%
Nos% +0-+0I+,) contend that the actua!
intention of the parties shou!d be $iewed
strict!y on the >3greement> dated 3ugust
*0#*-,= wherein it is c!ear!y stated that the
parties9 intention was to form a corporation
and not a /oint $enture%
&: The main issue hinges on who were the
du!y e!ected directors of Eaniwares for the
year *-FH during its annua! stockho!ders9
meeting he!d on 5arch F# *-FH% To answer
this "uestion the fo!!owing factors shou!d be
determined:
K(*) the nature of the business estab!ished
by the parties whether it was a /oint $enture
or a corporation and
):
'hi!e certain pro$isions of the
3greement wou!d make it appear that
the parties thereto disc!aim being
partners or /oint $enturers such
disc!aimer is directed at third parties
and is not inconsistent with# and does
not prec!ude# the e:istence of two
distinct groups of stockho!ders in
Eaniwares one of which (the Phi!ippine
&n$estors) sha!! constitute the
ma/ority# and the other 3E& sha!!
constitute the minority stockho!der% &n
any e$ent# the evi)ent intention of
the Phi!ippine &n$estors and 3E& in
entering into the 3greement is to
enter into a *oint venture
enterprise
3n e:amination of the 3greement
shows that certain pro$isions were
inccuded to protect the interests of
3E& as the minority% For e:amp!e# the
$ote of + out of - directors is re"uired
in certain enumerated corporate acts%
3E& is contractua!!y entit!ed to
designate a member of the :ecuti$e
.ommittee and the $ote of this
member is re"uired for certain
transactions
The 3greement a!so re"uires a +0@
superIma/ority $ote for the
amendment of the artic!es and byI
!aws of Eaniwares% 3E& is a!so gi$en
the right to designate the president
and p!ant manager %The 3greement
further pro$ides that the sa!es po!icy
of Eaniwares sha!! be that which is
norma!!y fo!!owed by 3E& and that
Eaniwares shou!d not e:port
>Etandard> products otherwise than
through 3E&9s :port 5arketing
Eer$ices% ?nder the 3greement# 3E&
agreed to pro$ide techno!ogy and
knowIhow to Eaniwares and the !atter
paid roya!ties for the same%
The legal concept of a *oint
venture is of common !aw origin% &t
has no precise !ega! definition but it
has been genera!!y understood to
mean an organization formed for
some temporary purpose. It is in fact
hardly distinguishable from the
partnership, since their elements are
similar community of interest in the
business, sharing of profits and losses,
and a mutual right of control.
The main distinction cited by most
opinions in common !aw /urisdictions is
that the partnership contemplates
a general &usiness +ith some
)egree of continuit## whi!e the
*oint venture is forme) for the
execution of a single transaction!
an) is thus of a temporar# nature%
"na vs. CIR
F: &n *-GG LorenAo Cna was appointed
administrator of the estate of his !ate wife
Ju!ia Buna!es% The administrator submitted
the pro/ect of partition# which was appro$ed
by the court% )owe$er# there was no attempt
was made to di$ide the properties among his
0 chi!dren% &nstead# the properties remained
under the management of LorenAo who used
the said properties in business by !easing or
se!!ing them and in$esting the income
deri$ed therefrom%
&n the years *-GG to *-0G# respondent .&;
did treat petitioners as coIowners# not !iab!e
to corporate ta:# and it was on!y from *-00
that .&; considered them as ha$ing formed
an unregistered partnership%
&: '(N an unregistered partnership was
formed%
):
<es% &t is admitted that a!! profits from
these $entures were di$ided among
petitioners proportionate!y in
accordance with their respecti$e
shares in the inheritance%
From the moment petitioners a!!owed
not on!y the incomes from their
respecti$e shares but e$en the
properties themse!$es to be used by
LorenAo as a common fund in
undertaking se$era! transactions or
business# with the intention of
deri$ing profit to be shared by them
proportionate!y# such act was
tantamount to actua!!y contributing
such incomes to a common fund and#
in effect they thereby formed an
unregistered partnership ta:ab!e by
!aw%
Re#es vs. CIR
F: Petitioners purchased a !ot and bui!ding%
The initia! payment was shared e"ua!!y by
the respondents% 3t the time of the
purchase# the bui!ding was !eased to $arious
tenants# whose rights under the !ease
contracts with the origina! owners# the
purchasers# petitioners herein# agreed to
respect% The administration of the bui!ding
was entrusted to an administrator who
co!!ected the rents2 kept books and records
and rendered statement of accounts to the
owners% Petitioners di$ided e"ua!!y the
income of operation and maintenance%
The .T3 he!d that petitioners formed a
partnership ta:ab!e by !aw app!ying the
ru!ing in $ange!ista case%
&: '(N petitioners indeed formed a
partnership as contemp!ated by !aw%
):
<es% The essentia! e!ements of
partnerships are present in this case#
name!y2 (a) an agreement to
contribute money# property# or
industry to a common fund2 and (b)
intent to di$ide the profits among the
contracting parties%
The first was a!ready admitted and
therefore it boi!s down to their intent
in acting as they did%
?pon consideration of the
circumstances surrounding the case# it
was found out that the petitionerBs
purpose was to engage in rea! estate
transactions for monetary gain and
then di$ide the same among
themse!$es%
&n the case at bar# there was a
common fund used in a series of
transactions2 the property thus
ac"uired was not used for residentia!
or other purposes other than !easing%
Euch properties ha$ing been under
management by one person with fu!!
power to !ease and such condition
e:isted for *1 years a!ready%
The co!!ecti$e effect of these
circumstances is such as to !ea$e no
room for doubt on the e:istence of
said intent in the petitioners herein%
'ar)ane vs. C
F: Petitioner ad$anced the theory that he is a
partner of pri$ate respondent and not a mere
emp!oyee indebted to the !atter% PetitionerBs
bases are the promissory notes e:ecuted by
pri$ate respondent in fa$or of petitioner as
a!!eged!y his share or contribution for the
partnership%

&: '(N there e:ists a partnership between
petitioner and pri$ate respondent%
):
No% 'hi!e receipt of a share in the
profits of the business is a prima facie
e$idence that the person is recei$ing
the same as a partner# no inference
sha!! be drawn if such profits were
recei$ed in payment of his wages as
an emp!oyee%
,allemit vs. Ta&liran
(.oIownership2 'ithout intent for profit)
F: This suit concerns the partition of a piece
of !and he!d pro indiviso which the p!aintiff
and the defendant had ac"uired in common
from its origina! owner% By the refusa! of the
defendant to di$ide the property# the p!aintiff
was compe!!ed to bring the proper action for
the enforcement of partition%
Petitioner asserts that a contract of
partnership was created between them%
Jefendant simp!y denied the its e:istence%
&: '(N partnership e:ists%
):
No% &t does not appear that any
contract of partnership whate$er was
made between them for the purposes
e:pressed in artic!e *,,0 of the .i$i!
.ode# for the sole transaction
performe) &# them +as the
ac-uisition *ointl# by mutua!
agreement of the lan) in -uestion#
since it was undi$ided# under the
condition that they each shou!d pay
oneIha!f of the price thereof and that
the property so ac"uired shou!d be
di$ided between the two purchasers2
and as# under this tit!e# the p!aintiff
and the defendant are the coIowners
of the said !and# the partition or
di$ision of such property he!d in /oint
tenancy must of course be a!!owed#
and the present possessor of the !and
has no right to deny the p!aintiff9s
c!aim on grounds or reasons
unsupported by proof%
"&illos vs. CIR
(Profit mere!y incidenta!)
F: This case is about the income ta: !iabi!ity
of four brothers and sisters who so!d two
parce!s of !and which they had ac"uired from
their father%
Commissioner of Internal Revenue
re-uire) the four petitioners to pa#
corporate income tax on the tota! profit of
P*HG#HH, in addition to indi$idua! income ta:
on their shares thereof )e assessed PH+#1*F
as corporate income ta:# P*F#01- as 01@
fraud surcharge and P*0#0G+%0, as G=@
accumu!ated interest# or a tota! of
P71,074.5%
The .ommissioner acted on the theory that
the four petitioners had formed an
unregistered partnership or /oint $enture
within the meaning of sections =G(a) and
FG(b) of the Ta: .odeL
&: '(N an unregistered partnership was
formed%
):
No% Their origina! purpose was to
di$ide the !ots for residentia! purposes%
&f !ater on they found it not feasib!e to
bui!d their residences on the !ots
because of the high cost of
construction# then they had no choice
but to rese!! the same to disso!$e the
coIownership%
The di$ision of the profit was mere!y
incidenta! to the disso!ution of the coI
ownership which was in the nature of
things a temporary state% &t had to be
terminated sooner or !ater%
3rtic!e *+,-(H) of the .i$i! .ode
pro$ides that >the sharing of gross
returns does not of itse!f estab!ish a
partnership# whether or not the
persons sharing them ha$e a /oint or
common right or interest in any
property from which the returns are
deri$ed>% There must &e an
unmista.a&le intention to form a
partnership or *oint venture.