1.HEIRS OF TAN ENG KEE vs.CA 341 SCRA 740, G.R. No.

126881, October 3, 2000

FACTS:
After the second World War, Tan EngKee and Tan Eng Lay, pooling their resources and
industry together, entered into a partnership engaged in the business of selling lumber
and hardware and construction supplies. They named their enterprise "Benguet
Lumber" which they jointly managed until Tan EngKee's death. Petitioners herein
averred that the business prospered due to the hard work and thrift of the alleged
partners. However, they claimed that in 1981, Tan Eng Lay and his children caused the
conversion of the partnership "Benguet Lumber" into a corporation called "Benguet
Lumber Company." The incorporation was purportedly a ruse to deprive Tan EngKee
and his heirs of their rightful participation in the profits of the business. Petitioners
prayed for accounting of the partnership assets, and the dissolution, winding up and
liquidation thereof, and the equal division of the net assets of Benguet Lumber. The
RTC ruled in favor of petitioners, declaring that Benguet Lumber is a joint venture which
is akin to a particular partnership. The Court of Appeals rendered the assailed decision
reversing the judgment of the trial court.
ISSUE: Whether the deceased Tan EngKee and Tan Eng Lay are joint adventurers
and/or partners in a business venture and/or particular partnership called Benguet
Lumber and as such should share in the profits and/or losses of the business venture or
particular partnership
RULING:
There was no partnership whatsoever. Except for a firm name, there was no firm
account, no firm letterheads submitted as evidence, no certificate of partnership, no
agreement as to profits and losses, and no time fixed for the duration of the partnership.
There was even no attempt to submit an accounting corresponding to the period after
the war until Kee's death in 1984. It had no business book, no written account nor any
memorandum for that matter and no license mentioning the existence of a partnership.
Also, the trial court determined that Tan EngKee and Tan Eng Lay had entered into a
joint venture, which it said is akin to a particular partnership. A particular partnership is
distinguished from a joint adventure, to wit:(a) A joint adventure (an American concept
similar to our joint accounts) is a sort of informal partnership, with no firm name and no
legal personality. In a joint account, the participating merchants can transact business
under their own name, and can be individually liable there for. (b) Usually, but not
necessarily a joint adventure is limited to a SINGLE TRANSACTION, although the
business of pursuing to a successful termination may continue for a number of years; a
partnership generally relates to a continuing business of various transactions of a
certain kind. A joint venture "presupposes generally a parity of standing between the
joint co-ventures or partners, in which each party has an equal proprietary interest in the
capital or property contributed, and where each party exercises equal rights in the
conduct of the business. The evidence presented by petitioners falls short of the
quantum of proof required to establish a partnership. In the absence of evidence, we

cannot accept as an established fact that Tan EngKee allegedly contributed his
resources to a common fund for the purpose of establishing a partnership. Besides, it is
indeed odd, if not unnatural, that despite the forty years the partnership was allegedly in
existence, Tan EngKee never asked for an accounting. The essence of a partnership is
that the partners share in the profits and losses .Each has the right to demand an
accounting as long as the partnership exists. A demand for periodic accounting is
evidence of a partnership. During his lifetime, Tan EngKee appeared never to have
made any such demand for accounting from his brother, Tang Eng Lay. We conclude
that Tan EngKee was only an employee, not a partner since they did not present and
offer evidence that would show that Tan EngKee received amounts of money allegedly
representing his share in the profits of the enterprise. There being no partnership, it
follows that there is no dissolution, winding up or liquidation to speak of.
2. G.R. No. 135813 October 25, 2001 FERNANDO SANTOS, petitioner, vs. SPOUSES
ARSENIO and NIEVES REYES, respondents. FACTS: In June 1986, Fernando Santos
(70%), Nieves Reyes (15%), and Melton Zabat (15%) orally instituted a partnership with
them as partners. Their venture is to set up a lending business where it was agreed that
Santos shall be financier and that Nieves and Zabat shall contribute their industry. **The
percentages after their names denote their share in the profit. Later, Nieves introduced
Cesar Gragera to Santos. Gragera was the chairman of a corporation. It was agreed
that the partnership shall provide loans to the employees of Grageras corporation and
Gragera shall earn commission from loan payments. In August 1986, the three partners
put into writing their verbal agreement to form the partnership. As earlier agreed, Santos
shall finance and Nieves shall do the daily cash flow more particularly from their
dealings with Gragera, Zabat on the other hand shall be a loan investigator. But then
later, Nieves and Santos found out that Zabat was engaged in another lending business
which competes with their partnership hence Zabat was expelled. The two continued
with the partnership and they took with them Nieves husband, Arsenio, who became
their loan investigator. Later, Santos accused the spouses of not remitting Grageras
commissions to the latter. He sued them for collection of sum of money. The spouses
countered that Santos merely filed the complaint because he did not want the spouses
to get their shares in the profits. Santos argued that the spouses, insofar as the dealing
with Gragera is concerned, are merely his employees. Santos alleged that there is a
distinct partnership between him and Gragera which is separate from the partnership
formed between him, Zabat and Nieves. The trial court as well as the Court of Appeals
ruled against Santos and ordered the latter to pay the shares of the spouses. ISSUE:
Whether or not the spouses are partners. HELD: Yes. Though it is true that the original
partnership between Zabat, Santos and Nieves was terminated when Zabat was
expelled, the said partnership was however considered continued when Nieves and
Santos continued engaging as usual in the lending business even getting Nieves
husband, who resigned from the Asian Development Bank, to be their loan investigator
who, in effect, substituted Zabat. There is no separate partnership between Santos

and Gragera. The latter being merely a commission agent of the partnership. This is
even though the partnership was formalized shortly after Gragera met with Santos (Note
that Nieves was even the one who introduced Gragera to Santos exactly for the
purpose of setting up a lending agreement between the corporation and the
partnership). HOWEVER, the order of the Court of Appeals directing Santos to give the
spouses their shares in the profit is premature. The accounting made by the trial court is
based on the total income of the partnership. Such total income calculated by the trial
court did not consider the expenses sustained by the partnership. All expenses incurred
by the money-lending enterprise of the parties must first be deducted from the total
income in order to arrive at the net profit of the partnership. The share of each one of
them should be based on this net profit and not from the gross income or total
income.
26. VILLAREAL V. RAMIREZ

VILLAREAL V. RAMIREZ

Facts:
In 1984, Villareal, Carmelito Jose and Jesus Jose formed a partnership with a capital of
P750,000for the operation of a restaurant and catering business. Respondent Ramirez
joined as a partner in the business with the capital contribution of P250,000. In 1987,
Jesus Jose withdrew from the partnership and within the same time, Villareal and
Carmelito Jose, petitioners closed the business without prior knowledge of respondents
In March 1987, respondents wrote a letter to petitioners stating that they were no longer
interested in continuing the partnership and that they were accepting the latters offer to
return their capital contribution. This was left unheeded by the petitioners, and by
reason of which respondents filed a complaint in the RTC.RTC ruled that the parties had
voluntarily entered into a partnership, which could be dissolved at any time, and this
dissolution was showed by the fact that petitioners stopped operating the restaurant. On
appeal, CA upheld RTCs decision that the partnership was dissolved and it added that
respondents had no right to demand the return of their capital contribution. However
since petitioners did not give the proper accounting for the liquidation of the partnership,
the CA took it upon itself to compute their liabilities and the amount that is proper to the
respondent. The computation of which was:(capital of the partnership outstanding
obligation) / remaining partners =amount due to private respondent
Issue: W/N petitioners are liable to respondents for the latters share in the partnership?
Ruling:
No. Respondents have no right to demand from petitioner the return of their equity
share. As found by the court petitioners did not personally hold its equity or assets. The

partnership has a juridical personality separate and distinct from that of each of the
partners. Since the capital was contributed to the partnership, not to petitioners, it is the
partnership that must refund the equity of the retiring partners. However, before the
partners can be paid their shares, the creditors of the partnership must first be
compensated. Therefore, the exact amount of refund equivalent to respondents onethird share in the partnership cannot be determined until all the partnership assets will
have been liquidated and all partnership creditors have been paid. CAs computation of
the amount to be refunded to respondents as their share was thus erroneous.
Posted by Lendferndz Biadno at 3:05 AM No comm
3.litonjua case

Aurelio and Eduardo are brothers. In 1973, Aurelio alleged that Eduardo entered into a
contract of partnership with him. Aurelio showed as evidence a letter sent to him by
Eduardo that the latter is allowing Aurelio to manage their family business (if Eduardos
away) and in exchange thereof he will be giving Aurelio P1 million or 10% equity, whichever
is higher. A memorandum was subsequently made for the said partnership agreement. The
memorandum this time stated that in exchange of Aurelio, who just got married, retaining
his share in the family business (movie theatres, shipping and land development) and some
other immovable properties, he will be given P1 Million or 10% equity in all these
businesses and those to be subsequently acquired by them whichever is greater.
In 1992 however, the relationship between the brothers went sour. And so Aurelio
demanded an accounting and the liquidation of his share in the partnership. Eduardo did not
heed and so Aurelio sued Eduardo.
ISSUE: Whether or not there exists a partnership.
HELD: No. The partnership is void and legally nonexistent. The documentary evidence
presented by Aurelio, i.e. the letter from Eduardo and the Memorandum, did not prove
partnership.
The 1973 letter from Eduardo on its face, contains typewritten entries, personal in tone, but
is unsigned and undated. As an unsigned document, there can be no quibbling that said
letter does not meet the public instrumentation requirements exacted under Article 1771
(how partnership is constituted) of the Civil Code. Moreover, being unsigned and doubtless
referring to a partnership involving more than P3,000.00 in money or property, said
letter cannot be presented for notarization, let alone registered with the Securities and
Exchange Commission (SEC), as called for under the Article 1772 (capitalization of a
partnership) of the Code. And inasmuch as the inventory requirement under the succeeding
Article 1773 goes into the matter of validity when immovable property is contributed to the
partnership, the next logical point of inquiry turns on the nature of Aurelios contribution, if
any, to the supposed partnership.

The Memorandum is also not a proof of the partnership for the same is not a public
instrument and again, no inventory was made of the immovable property and no inventory
was attached to the Memorandum. Article 1773 of the Civil Code requires that if immovable
property is contributed to the partnership an inventory shall be had and attached to the
contract.
5. sunga v. chua

n 1977, Chua and Jacinto Sunga verbally agreed to form a partnership for the sale and
distribution of Shellane LPGs. Their business was very profitable but in 1989 Jacinto died.
Upon Jacintos death, his daughter Lilibeth took over the business as well as the business
assets. Chua then demanded for an accounting but Lilibeth kept on evading him. In 1992
however, Lilibeth gave Chua P200k. She said that the same represents a partial payment;
that the rest will come after she finally made an accounting. She never made an accounting
so in 1992, Chua filed a complaint for Winding Up of Partnership Affairs, Accounting,
Appraisal and Recovery of Shares and Damages with Writ of Preliminary Attachment
against Lilibeth.
Lilibeth in her defense argued among others that Chuas action has prescribed.
ISSUE: Whether or not Chuas claim is barred by prescription.
HELD: No. The action for accounting filed by Chua three (3) years after Jacintos death was
well within the prescribed period. The Civil Code provides that an action to enforce an oral
contract prescribes in six (6) years while the right to demand an accounting for a partners
interest as against the person continuing the business accrues at the date of dissolution, in
the absence of any contrary agreement. Considering that the death of a partner results in
the dissolution of the partnership, in this case, it was after Jacintos death that Chua as the
surviving partner had the right to an account of his interest as against Lilibeth. It bears
stressing that while Jacintos death dissolved the partnership, the dissolution did not
immediately terminate the partnership. The Civil Code expressly provides that upon
dissolution, the partnership continues and its legal personality is retained until the complete
winding up of its business, culminating in its termination.

12.

EVANGELISTA & CO v. ABAD SANTOS (G.R. No. 31684; June 28, 1973)

FACTS: On October 9, 1954 a co-partnership was formed under the name of "Evangelista &
Co." On June 7, 1955the Articles of Co-partnership was amended as to include herein
respondent, Estrella Abad Santos, as industrialpartner, with herein petitioners Domingo C.
Evangelista, Jr., Leonardo Atienza Abad Santos and Conchita P.Navarro, the original capitalist
partners, remaining in that capacity, with a contribution of P17,500 each. Theamended Articles
provided,

inter alia
, that "the contribution of Estrella Abad Santos consists of her industry beingan industrial
partner", and that the profits and losses "shall be divided and distributed among the partners ...
in theproportion of 70% for the first three partners, Domingo C. Evangelista, Jr., Conchita P.
Navarro and LeonardoAtienza Abad Santos to be divided among them equally; and 30% for the
fourth partner Estrella Abad Santos."On December 17, 1963 herein respondent filed suit against
the three other partners in the Court of First Instance of Manila, alleging that the partnership,
which was also made a party-defendant, had been paying dividends to thepartners except to her;
and that notwithstanding her demands the defendants had refused and continued to refuse andlet
her examine the partnership books or to give her information regarding the partnership affairs to
pay her anyshare in the dividends declared by the partnership. She therefore prayed that
the defendants be ordered to render accounting to her of the partnership business and to pay
her corresponding share in the partnership profits after suchaccounting, plus attorney's fees and
costs.ISSUE: Whether or not Abad Santos is an industrial partner and is entitled to the shares
of the partnership?HELD: Yes. It is not disputed that the provision against the industrial partner
engaging in business for himself seeksto prevent any conflict of interest between the industrial
partner and the partnership, and to insure faithfulcompliance by said partner with this prestation.
That appellee has faithfully complied with her prestation withrespect to appellants is clearly
shown by the fact that it was only after filing of the complaint in this case and theanswer thereto
appellants exercised their right of exclusion under the codal art just mentioned by alleging
in their Supplemental Answer, subsequent to the filing of defendants' answer to the complaint,
defendants reached anagreement whereby the herein plaintiff been excluded from, and deprived
of, her alleged share, interests or participation, as an alleged industrial partner, in the defendant
partnership and/or in its net profits or income, on theground plaintiff has never contributed her
industry to the partnership, instead she has been and still is a judge of theCity Court (formerly
Municipal Court) of the City of Manila, devoting her time to performance of her duties as
suchjudge and enjoying the privilege and emoluments appertaining to the said office, aside from
teaching in law schoolin Manila, without the express consent of the herein defendants'. Having
always knows as a appellee as a City judgeeven before she joined appellant company as an
industrial partner, why did it take appellants many yearn beforeexcluding her from said company
as aforequoted allegations? And how can they reconcile such exclusive with their main theory
that appellee has never been such a partner because "The real agreement was to grant the
appellee ashare of 30% of the net profits which the appellant partnership may realize from June
7, 1955, until the mortgage of P30,000.00 obtained from the Rehabilitation Finance Corporal
shall have been fully paid.
7. PASCUAL v. Commissioner of InternalRevenue #10 BUSORG
G.R. No. 78133 October 18, 1988
GANCAYCO, J.:
FACTS:
On June 22, 1965, petitioners bought two (2)parcels of land from Santiago
Bernardino, et al.and on May 28, 1966, they bought anotherthree (3) parcels

of land from Juan Roque. Thefirst two parcels of land were sold by
petitionersin 1968 to Marenir Development Corporation,while the three
parcels of land were sold bypetitioners to Erlinda Reyes and Maria Samsonon
March 19,1970. Petitioner realized a netprofit in the sale made in 1968 in the
amount of P165, 224.70, while they realized a net profit of P60,000 in the
sale made in 1970. Thecorresponding capital gains taxes were paid
bypetitioners in 1973 and 1974 .Respondent Commissioner informed
petitionersthat in the years 1968 and 1970, petitioners asco-owners in the
real estate transactions formedan unregistered partnership or joint
venturetaxable as a corporation under Section 20(b)and its income was
subject to the taxesprescribed under Section 24, both of theNational Internal
Revenue Code; that theunregistered partnership was subject tocorporate
income tax as distinguished fromprofits derived from the partnership by
themwhich is subject to individual income tax.
ISSUE:
Whether petitioners formed an unregisteredpartnership subject to corporate
income tax(partnership vs. co-ownership)
RULING:
Article 1769 of the new Civil Code lays down therule for determining when
a transaction shouldbe deemed a partnership or a co-ownership.Said article
paragraphs 2 and 3, provides:(2) Co-ownership or co-possession does not
itself establish a partnership, whether such co-ownersor co-possessors do or
do not share any profitsmade by the use of the property; (3) Thesharing of
gross returns does not of itself establish a partnership, whether or not
thepersons sharing them have a joint or commonright or interest in any
property from which thereturns are derived;The sharing of returns does not
in itself establish a partnership whether or not thepersons sharing therein
have a joint or commonright or interest in the property. There must bea
clear intent to form a partnership, theexistence of a juridical personality
different fromthe individual partners, and the freedom of eachparty to
transfer or assign the whole property.In the present case, there is clear
evidence of co-ownership between the petitioners. There isno adequate basis
to support the propositionthat they thereby formed an
unregisteredpartnership. The two isolated transactionswhereby they
purchased properties and sold thesame a few years thereafter did not
therebymake them partners. They shared in the grossprofits as co- owners
and paid their capital gainstaxes on their net profits and availed of the
taxamnesty thereby. Under the circumstances, theycannot be considered to
have formed anunregistered partnership which is thereby liablefor corporate
income tax, as the respondentcommissioner
proposes. And even assuming for the sake of argumentthat such
unregistered partnership appears tohave been formed, since there is no
suchexisting unregistered partnership with a distinctpersonality nor with
assets that can be heldliable for said deficiency corporate income tax,then

petitioners can be held individually liable aspartners for this unpaid

obligation of thepartnership
8.) 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
9. TOCAO V. CA

G.R. No. 127405; October 4, 2000

Ponente: J. Ynares-Santiago
FACTS:
Private respondent Nenita A. Anay met petitioner William T. Belo, then
the vice-president for operations of Ultra Clean Water Purifier, through her
former employer in Bangkok. Belo introduced Anay to petitioner Marjorie
Tocao, who conveyed her desire to enter into a joint venture with her for the
importation and local distribution of kitchen cookwares
Under the joint venture, Belo acted as capitalist, Tocao as president
and general manager, and Anay as head of the marketing department and
later, vice-president for sales
The parties agreed that Belo's name should not appear in any documents
relating to their transactions with West Bend Company. Anay having secured
the distributorship of cookware products from the West Bend Company and
organized the administrative staff and the sales force, the cookware business
took off successfully. They operated under the name of Geminesse
Enterprise, a sole proprietorship registered in Marjorie Tocao's name.
The parties agreed further that Anay would be entitled to:
(1) ten percent (10%) of the annual net profits of the business;
(2) overriding commission of six percent (6%) of the overall weekly
production;
(3) thirty percent (30%) of the sales she would make; and
(4) two percent (2%) for her demonstration services. The agreement was not
reduced to writing on the strength of Belo's assurances that he was sincere,
dependable and honest when it came to financial commitments.

On October 9, 1987, Anay learned that Marjorie Tocao had signed a

letteraddressed to the Cubao sales office to the effect that she was no longer
the vice-president of Geminesse Enterprise.
Anay attempted to contact Belo. She wrote him twice to demand her
overriding commission for the period of January 8, 1988 to February 5, 1988
and the audit of the company to determine her share in the net profits.
Anay still received her five percent (5%) overriding commission up to
December 1987. The following year, 1988, she did not receive the same
commission although the company netted a gross sales of P 13,300,360.00.
On April 5, 1988, Nenita A. Anay filed Civil Case No. 88-509, a
complaint for sum of money with damages against Marjorie D. Tocao and
William Belo before the Regional Trial Court of Makati, Branch 140
The trial court held that there was indeed an "oral partnership
agreement between the plaintiff and the defendants. The Court of Appeals
affirmed the lower courts decision.
ISSUE:
Whether the parties formed a partnership
HELD:
Yes, the parties involved in this case formed a partnership
The Supreme Court held that to be considered a juridical personality, a
partnership must fulfill these requisites:
(1) two or more persons bind themselves to contribute money, property or
industry to a common fund; and
(2) intention on the part of the partners to divide the profits among
themselves. It may be constituted in any form; a public instrument is
necessary only where immovable property or real rights are contributed
thereto.
This implies that since a contract of partnership is consensual, an oral
contract of partnership is as good as a written one.
In the case at hand, Belo acted as capitalist while Tocao as president
and general manager, and Anay as head of the marketing department and
later, vice-president for sales. Furthermore, Anay was entitled to a
percentage of the net profits of the business.
Therefore, the parties formed a partnership.

10.torres v.ca

In 1969, sisters Antonia Torres and Emeteria Baring entered into a joint venture agreement
with Manuel Torres. Under the agreement, the sisters agreed to execute a deed of sale in
favor Manuel over a parcel of land, the sisters received no cash payment from Manuel but
the promise of profits (60% for the sisters and 40% for Manuel) said parcel of land is to be
developed as a subdivision.
Manuel then had the title of the land transferred in his name and he subsequently
mortgaged the property. He used the proceeds from the mortgage to start building roads,
curbs and gutters. Manuel also contracted an engineering firm for the building of housing
units. But due to adverse claims in the land, prospective buyers were scared off and the
subdivision project eventually failed.
The sisters then filed a civil case against Manuel for damages equivalent to 60% of the
value of the property, which according to the sisters, is whats due them as per the contract.
The lower court ruled in favor of Manuel and the Court of Appeals affirmed the lower court.
The sisters then appealed before the Supreme Court where they argued that there is no
partnership between them and Manuel because the joint venture agreement is void.
ISSUE: Whether or not there exists a partnership.
HELD: Yes. The joint venture agreement the sisters entered into with Manuel is a
partnership agreement whereby they agreed to contribute property (their land) which was to
be developed as a subdivision. While on the other hand, though Manuel did not contribute
capital, he is an industrial partner for his contribution for general expenses and other costs.
Furthermore, the income from the said project would be divided according to the stipulated
percentage (60-40). Clearly, the contract manifested the intention of the parties to form a
partnership. Further still, the sisters cannot invoke their right to the 60% value of the
property and at the same time deny the same contract which entitles them to it.
At any rate, the failure of the partnership cannot be blamed on the sisters, nor can it be
blamed to Manuel (the sisters on their appeal did not show evidence as to Manuels fault in
the failure of the partnership). The sisters must then bear their loss (which is 60%). Manuel
does not bear the loss of the other 40% because as an industrial partner he is exempt from
losses.

11. Lim vs. Philippine Fishing Gear Industries Inc. [GR 136448, 3 November 1999]

FACTS: Lim Tong Lim requested Peter Yao and Antonio Chuato engage in commercial fishing with him.
The three agreed to purchase two fishing boats but since they do not have the money they borrowed from
one Jesus Lim the brother of Lim Tong Lim. Subsequently, they again borrowed money for the purchase
of fishing nets and other fishing equipments. Yao and Chua represented themselves as acting in behalf of
Ocean Quest Fishing Corporation (OQFC) and they contracted with Philippine Fishing Gear Industries
(PFGI) for the purchase of fishing nets amounting to more than P500k. However, they were unable to pay
PFGI and hence were sued in their own names as Ocean Quest Fishing Corporation is a non-existent
corporation. Chua admitted his liability while Lim Tong Lim refused such liability alleging that Chua and
Yao acted without his knowledge and consent in representing themselves as a corporation.
ISSUE: Whether Lim Tong Lim is liable as a partner
HELD: Yes. It is apparent from the factual milieu that the three decided to engage in a fishing business.
Moreover, their Compromise Agreement had revealed their intention to pay the loan with the proceeds of
the sale and to divide equally among them the excess or loss. The boats and equipment used for their
business entails their common fund. The contribution to such fund need not be cash or fixed assets; it
could be an intangible like credit or industry. That the parties agreed that any loss or profit from the sale
and operation of the boats would be divided equally among them also shows that they had indeed formed
a partnership. The principle of corporation by estoppel cannot apply in the case as Lim Tong Lim also
benefited from the use of the nets in the boat, which was an asset of the partnership. Under the law on
estoppel, those acting in behalf of a corporation and those benefited by it, knowing it to be without valid
existence are held liable as general partners. Hence, the question as to whether such was legally formed
for unknown reasons is immaterial to the case.

13.

MOBIL OIL PHILIPPINES V. CFI RIZAL

FACTS:
On November 8, 1972, petitioner filed a complaint in the Court of First Instance of Rizal against
the partnership La Mallorca and its general partners, which included private respondents, for
collection of a sum of money arising from gasoline purchased on credit but not paid, for damages
and attorneys fees.
ISSUE:
Whether or not public respondent acted with grave abuse of discretion amounting to lack of
jurisdiction in declaring null and void its earlier decision of July 25, 1974.
HELD:
Yes, respondents acted with grave abuse of discretion. The judgment was rendered in favor of the
plaintiff and against the defendants ordering the defendant La Mallorca Partnership to pay the
plaintiff. From a joint venture/partnership theory which he adopted and consistently pursued in
his complaint. Respondents shall be excluded and that only nominal attorney's fees shall be
awarded. Petitioner embraced the innominate contract theory. The defense agreed to submit the
case for decision solely on the basis of evidence adduced by plaintiff Mobil Oil but past interest
in the amount of P150. An inventory of the contributed property duly signed by the parties

should be attached to the public instrument. Being unsigned and referring to a partnership
involving more than P3. MOBIL OIL PHILIPPINES. the counsel of the defendant successfully
bargained for a compromise agreement.
14. RAMNANI v. CA
FACTS:
Ishwar, Choithram and Navalrai, all surnamed Jethmal Ramnani, are brothers
of the full blood. Ishwar and his spouse Sonya had their main business based in New
York. Realizing the difficulty of managing their investments in the Philippines they
executed a general power of attorney on January 24, 1966 appointing Navalrai and
Choithram as attorneys-in-fact, empowering them to manage and conduct their
business concern in the Philippines
On February 1, 1966 and on May 16, 1966, Choithram entered into two
agreements for the purchase of two parcels of land located in Barrio Ugong, Pasig,
Rizal, from Ortigas & Company, Ltd. Partnership. A building was constructed thereon
by Choithram in 1966. Three other buildings were built thereon by Choithram
through a loan of P100,000.00 obtained from the Merchants Bank as well as the
income derived from the first building.
Sometime in 1970 Ishwar asked Choithram to account for the income and
expenses relative to these properties during the period 1967 to 1970. Choithram
failed and refused to render such accounting. Thereafter, Ishwar revoked the
general power of attorney. Choithram and Ortigas were duly notified of such
revocation on April 1, 1971 and May 24, 1971, respectively. Said notice was also
registered with the Securities and Exchange Commission on March 29, 1971 and
was published in the April 2, 1971 issue of The Manila Times for the information of
the general public.
Nevertheless, Choithram, transferred all rights and interests of Ishwar and
Sonya in favor of his daughter-in-law, Nirmla Ramnani, on February 19, 1973.
On October 6, 1982, Ishwar and Sonya filed a complaint against Choitram
and/or spouses Nirmla and Moti and Ortigas for reconveyance of said properties or
payment of its value and damages.
ISSUE
Whether Ishram can recover the entire properties subject in the ligitation
HELD:
No, Ishram cannot recover the entire properties subject.

The Supreme Court held that despite the fact that Choithram, et al., have
committed acts which demonstrate their bad faith and scheme to defraud spouses
Ishwar and Sonya of their rightful share in the properties in litigation, the Court
cannot ignore the fact that Choithram must have been motivated by a strong
conviction that as the industrial partner in the acquisition of said assets he has as
much claim to said properties as Ishwar, the capitalist partner in the joint venture.
Choithram in turn decided to invest in the real estate business. He bought the
two (2) parcels of land in question from Ortigas as attorney-in-fact of Ishwar. Instead
of paying for the lots in cash, he paid in installments and used the balance of the
capital entrusted to him, plus a loan, to build two buildings. Although the buildings
were burned later, Choithram was able to build two other buildings on the property.
He rented them out and collected the rentals. Through the industry and genius of
Choithram, Ishwar's property was developed and improved into what it is now.
Justice and equity dictate that the two share equally the fruit of their joint
investment and efforts. Perhaps this Solomonic solution may pave the way towards
their reconciliation. Both would stand to gain. No one would end up the loser. After
all, blood is thicker than water. 3ddddd76767445342dsdfsdfsdfsx6dfxv76ggbdddddd677333
6.fffff6. Primelink v. lazatin-magat

In 1994, Primelink Properties and the Lazatin siblings entered into a joint venture
agreement whereby the Lazatins shall contribute a huge parcel of land and Primelink shall
develop the same into a subdivision. For 4 years however, Primelink failed to develop the
said land. So in 1998, the Lazatins filed a complaint to rescind the joint venture agreement
with prayer for preliminary injunction. In said case, Primelink was declared in default or
failing to file an answer and for asking multiple motions for extension. The trial court
eventually ruled in favor of the Lazatins and it ordered Primelink to return the possession of
said land to the Lazatins as well as some improvements which Primelink had so far over the
property without the Lazatins paying for said improvements. This decision was affirmed by
the Court of Appeals. Primelink is now assailing the order; that turning over improvements
to the Lazatins without reimbursement is unjust; that the Lazatins did not ask the properties
to be placed under their possession but they merely asked for rescission.
ISSUE: Whether or not the improvements made by Primelink should also be turned over
under the possession of the Lazatins.
HELD: Yes. In the first place, even though the Lazatins did specifically pray for possession
the same (placing of improvements under their possession) is incidental in the relief they
prayed for. They are therefore entitled possession over the parcel of land plus the
improvements made thereon made by Primelink.
In this jurisdiction, joint ventures are governed by the laws of partnership. Under the laws of
partnership, when a partnership is dissolved, as in this case when the trial court rescinded

the joint venture agreement, the innocent party has the right to wind up the partnership
affairs.
With the rescission of the JVA on account of petitioners fraudulent acts, all authority of any
partner to act for the partnership is terminated except so far as may be necessary to wind
up the partnership affairs or to complete transactions begun but not yet finished. On
dissolution, the partnership is not terminated but continues until the winding up of
partnership affairs is completed. Winding up means the administration of the assets of the
partnership for the purpose of terminating the business and discharging the obligations of
the partnership.
It must be stressed, too, that although the Lazatins acquired possession of the lands and
the improvements thereon, the said lands and improvements remained partnership
property, subject to the rights and obligations of the parties, inter se, of the creditors and of
third parties and subject to the outcome of the settlement of the accounts between the
parties, absent any agreement of the parties in their JVA to the contrary (here no agreement
in the JVA as to winding up). Until the partnership accounts are determined, it cannot be
ascertained how much any of the parties is entitled to, if at all.