SEVILLA v.

CA
G.R. Nos. L-41182-3; April 15, 1988
Ponente: J. Sarmiento
FACTS: On Oct. 19, 1960, the Tourist World Service, Inc. leased an office at Mabini St., Manila for the
former's use as a branch office. When the branch office was opened, the same was run by the herein
appellant Lina O. Sevilla payable to Tourist World Service Inc. by any airline for any fare brought in on the
efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by the Tourist World
Service, Inc.
On or about November 24, 1961, the Tourist World Service, Inc. appears to have been informed that Lina
Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was
anyhow losing, the Tourist World Service considered closing down its office.
This was firmed up by two resolutions of the board of directors of Tourist World Service, Inc. dated Dec. 2,
1961, the first abolishing the office of the manager and vice-president of the Tourist World Service, Inc.,
Ermita Branch, and the second, authorizing the corporate secretary to receive the properties of the Tourist
World Service then located at the said branch office. It further appears that on Jan. 3, 1962, the contract
with the appellees for the use of the Branch Office premises was terminated and while the effectivity
thereof was Jan. 31, 1962, the appellees no longer used it. As a matter of fact appellants used it since Nov.
1961. Because of this, and to comply with the mandate of the Tourist World Service, the corporate
secretary Gabino Canilao went over to the branch office, and, finding the premises locked, and, being
unable to contact Lina Sevilla, he padlocked the premises on June 4, 1962 to protect the interests of the
Tourist World Service.
When neither the appellant Lina Sevilla nor any of her employees could enter the locked premises, a
complaint was filed by the herein appellants against the appellees with a prayer for the issuance of
mandatory preliminary injunction. Both appellees answered with counterclaims. For apparent lack of
interest of the parties therein, the trial court ordered the dismissal of the case without prejudice.
ISSUE: Whether the act of Tourist World Service in abolishing its Ermita branch proper
HELD:
No, the act of Tourist World Service in abolishing its Ermita branch is not proper.
The Supreme Court held that when the petitioner, Lina Sevilla, agreed to manage Tourist World Service,
Inc.'s Ermita office, she must have done so pursuant to a contract of agency.
In the case at bar, Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist
World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. And
as we said, Sevilla herself, based on her letter of November 28, 1961, presumed her principal's authority
as owner of the business undertaking. We are convinced, considering the circumstances and from the
respondent Court's recital of facts, that the parties had contemplated a principal-agent relationship, rather
than a joint management or a partnership.
But unlike simple grants of a power of attorney, the agency that we hereby declare to be compatible with
the intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the
agency having been created for the mutual interest of the agent and the principal. Accordingly, the
revocation complained of should entitle the petitioner, Lina Sevilla, to damages
Eligio Estanislao, Jr. v. Court of Appeals ,REMEDIOS ESTANISLAO, EMILIO and LEOCADIO SANTIAGO
FACTS:
Petitioner and private respondents are brothers and sisters who are co-owners of certain lots at the corner of Annapolis and Aurora
Blvd., Quezon City which were then being leased to the Shell Company of the Philippines Limited (SHELL). They agreed to open and
operate a gas station thereat to be known as Estanislao Shell Service Station with an initial investment of P15,000.00 to be taken from
the advance rentals due to them from SHELL for the occupancy of the said lots owned in common by them.
On May 26, 1966, the parties herein entered into an Additional Agreement with a proviso that said agreement cancels and
supersedes the original agreement executed by the co-owners.

For sometime, the petitioner submitted financial statements regarding the operation of the business to private respondents, but
thereafter petitioner failed to render subsequent accounting.

A demand was made on petitioner:

to render an accounting of the profits;
to execute a public document embodying all the provisions of the partnership agreement;
to pay the plaintiffs their lawful shares and participation in the net profits of the business.
ISSUE:
IS A PARTNERSHIP a FORMED WHERE MEMBERS OF THE SAME FAMILY BIND THEMSELVES TO CONTRIBUTE
MONEY TO A COMMON FUND WITH THE INTENTION OF DIVIDING THE PROFITS AMONG THEMSELVES?
HELD:
YES. The Joint Affidavit of April 11, 1966 (Exhibit A), clearly stipulated by the members of the same family that the P15,000.00
advance rental due to them from SHELL shall augment their "capital investment" in the operation of the gasoline station.

other evidence in the record:

Petitioner submitted to private respondents periodic accounting of the business.
Petitioner gave a written authority to private respondent Remedios Estanislao, his sister, to examine and audit the books of their
"common business" (aming negosyo).

Respondent Remedios assisted in the running of the business.

1.) DAN FUE LEUNG,
petitioner, vs.
HON. INTERMEDIATE APPELLATE COURT and LEUNG YIU,
respondents.
G.R. No. 70926 January 31, 1989GUTIERREZ,
JR., J.:
FACTS:
The petitioner asks for the reversal of the decision of the then Intermediate Appellate Court in AC-G.R. No.
CV-00881 whichaffirmed the decision of the then Court of First Instance of Manila, Branch II in Civil Case
No. 116725 declaring privaterespondent Leung Yiu a partner of petitioner Dan Fue Leung in the business of
Sun Wah Panciteria and ordering thepetitioner to pay to the private respondent his share in the annual
profits of the said restaurant.This case originated from a complaint filed by respondent Leung Yiu with the
then Court of First Instance of Manila, BranchII to recover the sum equivalent to twenty-two percent (22%)
of the annual profits derived from the operation of Sun WahPanciteria since October, 1955 from petitioner
Dan Fue Leung.The Sun Wah Panciteria, a restaurant, located at Florentino Torres Street, Sta. Cruz, Manila,
was established sometime inOctober, 1955. It was registered as a single proprietorship and its licenses and
permits were issued to and in favor of petitioner Dan Fue Leung as the sole proprietor. Respondent Leung
Yiu adduced evidence during the trial of the case toshow that Sun Wah Panciteria was actually a
partnership and that he was one of the partners having contributed P4,000.00to its initial
establishment.The private respondents evidence is summarized as follows:About the time the Sun Wah
Panciteria started to become operational, the private respondent gave P4,000.00 as hiscontribution to the
partnership. This is evidenced by a receipt wherein the petitioner acknowledged his acceptance of
theP4,000.00 by affixing his signature thereto. Furthermore, the private respondent received from the
petitioner the amount of P12,000.00 covered by the latter's Equitable Banking Corporation Check from the
profits of the operation of the restaurantfor the year 1974The petitioner denied having received from the
private respondent the amount of P4,000.00. He contested and impugnedthe genuineness of the receipt.
His evidence is summarized as follows:The petitioner did not receive any contribution at the time he
started the Sun Wah Panciteria. He used his savings from hissalaries as an employee at Camp Stotsenberg
in Clark Field and later as waiter at the Toho Restaurant amounting to a littlemore than P2,000.00 as
capital in establishing Sun Wah Panciteria. Petitioner presented various government licenses andpermits
showing the Sun Wah Panciteria was and still is a single proprietorship solely owned and operated by
himself alone.Fue Leung also flatly denied having issued to the private respondent the receipt (Exhibit G)
and the Equitable BankingCorporation's Check No. 13389470 B in the amount of P12,000.00 (Exhibit B).
ISSUE: WON Private respondent is a partner of the petitioner in Sun Wah Panciteria?
HELD:
The private respondent is a partner of the petitioner in Sun Wah Panciteria. The requisites of a partnership
which are 1)two or more persons bind themselves to contribute money, property, or industry to a
common fund; and 2) intention on thepart of the partners to divide the profits among themselves (Article
1767, Civil Code; Yulo v. Yang Chiao Cheng, 106 Phil.110)-have been established. As stated by the

respondent, a partner shares not only in profits but also in the losses of thefirm. If excellent relations exist
among the partners at the start of business and all the partners are more interested in seeingthe firm grow
rather than get immediate returns, a deferment of sharing in the profits is perfectly plausible. It would
beincorrect to state that if a partner does not assert his rights anytime within ten years from the start of
operations, such rightsare irretrievably lost. The private respondent's cause of action is premised upon the
failure of the petitioner to give him theagreed profits in the operation of Sun Wah Panciteria. In effect the
private respondent was asking for an accounting of hisinterests in the partnership
JOHN FORTIS, plaintiff-appellee,
vs.
GUTIERREZ HERMANOS, defendants-appellants.
Plaintiff, an employee of defendants during the years 1900, 1901, and 1902, brought this action to recover a balance due
him as salary for the year 1902. He alleged that he was entitled, as salary, to 5 per cent of the net profits of the business
of the defendants for said year. The complaint also contained a cause of action for the sum of 600 pesos, money
expended by plaintiff for the defendants during the year 1903. The court below, in its judgment, found that the contract had
been made as claimed by the plaintiff; that 5 per cent of the net profits of the business for the year 1902 amounted to
26,378.68 pesos, Mexican currency; that the plaintiff had received on account of such salary 12,811.75 pesos, Mexican
currency, and ordered judgment against the defendants for the sum 13,566.93 pesos, Mexican currency, with interest
thereon from December 31, 1904. The court also ordered judgment against the defendants for the 600 pesos mentioned
in the complaint, and intereat thereon. The total judgment rendered against the defendants in favor of the plaintiff, reduced
to Philippine currency, amounted to P13,025.40. The defendants moved for a new trial, which was denied, and they have
brought the case here by bill of exceptions.
(1) The evidence is sufifcient to support the finding of the court below to the effect that the plaintiff worked for the
defendants during the year 1902 under a contract by which he was to receive as compensation 5 per cent of the net
profits of the business. The contract was made on the part of the defendants by Miguel Alonzo Gutierrez. By the
provisions of the articles of partnership he was made one of the managers of the company, with full power to transact all
of the business thereof. As such manager he had authority to make a contract of employment with the plaintiff.
(2) Before answering in the court below, the defendants presented a motion that the complaint be made more definite and
certain. This motion was denied. To the order denying it the defendants excepted, and they have assigned as error such
ruling of the court below. There is nothing in the record to show that the defendants were in any way prejudiced by this
ruling of the court below. If it were error it was error without prejudice, and not ground for reversal. (Sec. 503, Code of Civil
Procedure.)
(3) It is claimed by the appellants that the contract alleged in the complaint made the plaintiff a copartner of the
defendants in the business which they were carrying on. This contention can not bo sustained. It was a mere contract of
employnent. The plaintiff had no voice nor vote in the management of the affairs of the company. The fact that the
compensation received by him was to be determined with reference to the profits made by the defendants in their
business did not in any sense make by a partner therein. The articles of partnership between the defendants provided that
the profits should be divided among the partners named in a certain proportion. The contract made between the plaintiff
and the then manager of the defendant partnership did not in any way vary or modify this provision of the articles of
partnership. The profits of the business could not be determined until all of the expenses had been paid. A part of the
expenses to be paid for the year 1902 was the salary of the plaintiff. That salary had to be deducted before the net profits
of the business, which were to be divided among the partners, could be ascertained. It was undoubtedly necessary in
order to determine what the salary of the plaintiff was, to determine what the profits of the business were, after paying all
of the expenses except his, but that determination was not the final determination of the net profits of the business. It was
made for the purpose of fixing the basis upon which his compensation should be determined.
(4) It was no necessary that the contract between the plaintiff and the defendants should be made in writing. (Thunga Chui
vs. Que Bentec,1 1 Off. Gaz., 818, October 8, 1903.)
(5) It appearred that Miguel Alonzo Gutierrez, with whom the plaintiff had made the contract, had died prior to the trial of
the action, and the defendants claim that by reasons of the provisions of section 383, paragraph 7, of the Code of Civil

Procedure, plaintiff could not be a witness at the trial. That paragraph provides that parties to an action against an
executor or aministrator upon a claim or demand against the estate of a deceased person can not testify as to any matter
of fact occurring before the death of such deceased person. This action was not brought against the administrator of
Miguel Alonzo, nor was it brought upon a claim against his estate. It was brought against a partnership which was in
existence at the time of the trial of the action, and which was juridical person. The fact that Miguel Alonzo had been a
partner in this company, and that his interest therein might be affected by the result of this suit, is not sufficient to bring the
case within the provisions of the section above cited.
(6) The plaintiff was allowed to testify against the objection and exception of the defendants, that he had been paid as
salary for the year 1900 a part of the profits of the business. This evidence was competent for the purpose of
corroborating the testimony of the plaintiff as to the existence of the contract set out in the complaint.
(7) The plaintiff was allowed to testify as to the contents of a certain letter written by Miguel Glutierrez, one of the partners
in the defendant company, to Miguel Alonzo Gutierrez, another partner, which letter was read to plaintiff by Miguel Alonzo.
It is not necessary to inquire whether the court committed an error in admitting this evidence. The case already made by
the plaintiff was in itself sufficient to prove the contract without reference to this letter. The error, if any there were, was not
prejudicial, and is not ground for revesal. (Sec. 503, Code of Civil Procedure.)
(8) For the purpose of proving what the profits of the defendants were for the year 1902, the plaintiff presented in evidence
the ledger of defendants, which contained an entry made on the 31st of December, 1902, as follows:
Perdidas y Ganancias ...................................... a Varios Ps. 527,573.66 Utilidades liquidas obtenidas durante el
ano y que abonamos conforme a la proporcion que hemos establecido segun el convenio de sociedad.
The defendant presented as a witness on, the subject of profits Miguel Gutierrez, one of the defendants, who testiffied,
among other things, that there were no profits during the year 1902, but, on the contrary, that the company suffered
considerable loss during that year. We do not think the evidence of this witnees sufficiently definite and certain to
overcome the positive evidence furnished by the books of the defendants themselves.
(9) In reference to the cause of action relating to the 600 pesos, it appears that the plaintiff left the employ of the
defendants on the 19th of Macrh, 1903; that at their request he went to Hongkong, and was there for about two months
looking after the business of the defendants in the matter of the repair of a certain steamship. The appellants in their brief
say that the plaintiff is entitled to no compensation for his services thus rendered, because by the provisions of article
1711 of the Civil Code, in the absence of an agreement to the contrary, the contract of agency is supposed to be
gratuitous. That article i not applicable to this case, because the amount of 600 pesos not claimed as compensation for
services but as a reimbursment for money expended by the plaintiff in the business of the defendants. The article of the
code that is applicable is article 1728.
The judgment of the court below is affirmed, with the costs, of this instance against the appellants. After the expiration of
twenty days from the date of this decision let final judgment be entered herein, and ten days thereafter let the case be
remanded to the lower court for execution. So ordered.
Facts:
Plaintiff Fortis is an employee of defendant Gutierrez Hermanos. Theformer brought an action to recover a balance due
him as salary forthe year 1902. He also alleged that he was entitled, as salary, to 5 percent of the net profits of the
business of the defendants for said year. The complaint also contained a cause of action for the sum of 600pesos, money
expended by plaintiff for the defendants during the year1903. The lower court ruled in favor of the plaintiff. The total
judgmentrendered amounted to P13, 025.40, which was reduced to Philippinecurrency. The defendants moved for new
trial but were denied. They brought the case in the SC thru bill of exceptions; the appellants(defendants) alleged that that
the contract made the plaintiff acopartner of the defendants in the business, which they were carrying on.
Issue: WON the plaintiff is a co-partner of the defendants in the business.
Ruling:

NO. It was a mere contract of employment. The plaintiff had neithervoice nor vote in the management of the affairs of the
company. Thefact that the compensation received by him was to be determined withreference to the profits made by the
defendants in their business didnot in any sense make by a partner therein. The articles of partnershipbetween the
defendants provided that the profits should be dividedamong the partners named in a certain proportion. The contract
madebetween the plaintiff and the then manager of the defendantpartnership did not in any way vary or modify this
provision of thearticles of partnership.

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

E. S. LYONS vs. C. W. ROSENSTOCK,Executor of the Estate of Henry W. Elser, deceasedFACTS:
Henry W. Elser was engaged in buying, selling, and administering real estate. E. S.Lyons joined with him,
the profits being shared by the two in equal parts.Lyons, whose regular vocation was that of a missionary
or missionary agent, of theMethodist 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, atthat time, half
owner with Elser of three particular pieces of real property. Concurrentlywith this act Lyons execute in favor
of Elser a general power of attorney empoweringhim to manage and dispose of said properties at will and
to represent Lyons fully andamply, to the mutual advantage of both.The attention of Elser was drawn to a
piece of land, referred to as the San JuanEstate. He obtained the loan of P50,000 to complete the amount
needed for the firstpayment on the San Juan Estate. The lender insisted that he should procure
thesignature 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 ownedby 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 P50,000upon the equity of redemption in the Carriedo property, Lyons, as half owner of
saidproperty, became, as it were, involuntarily the owner of an undivided interest in theproperty acquired
partly by that money; and it is insisted for him that, in considerationof 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 there was a general relation of partnership.
RULING:
NO,
The position of the appellant is, in our opinion, untenable. If Elser hadused any money actually belonging
to Lyons in this deal, he would under article 1724of the Civil Code and article 264 of the Code of
Commerce, be obligated to payinterest upon the money so applied to his own use. Under the law
prevailing in this jurisdiction a trust does not ordinarily attach with respect to property acquired by aperson
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 partnershiphad existed in the money used, the case might be
different; and much emphasis islaid in the appellant's brief upon the relation of partnership which, it is
claimed,existed. But there was clearly no general relation of partnership, 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 intoa proposition which would make Lyons a participant
in this deal contrary to hisexpress determination.It seems to be supposed that the doctrines of equity
worked out in the jurisprudenceof 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 oneperson 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 partnershipcomposed of Elser and Lyons was in fact used by Elser in the purchase of the
SanJuan 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 estatewould be liable for such damage. But it is
evident that Lyons was not prejudice by thatact