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.