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Torres et al vs CA

Sisters Antonia Torres and Emeteria Baring, herein petitioners, entered into a “joint venture
agreement” with respondent Manuel Torres for the development of a parcel of land into subdivision.
Pursuant to the contract, they executed a Deed of Sale covering the said parcel of land in favor of
respondent, who hat it registered in his name. By mortgaging the property, respondent obtained from
Equitable Bank by a loan of ₱40,000 which, under the Joint Venture Agreement, was to be used for the
development of the subdivision. However, the project did not push through, and the land was
subsequently foreclosed by the bank.
The petitioners asked the respondent to pay them damages equivalent to 60 percent of the
value of the property because of their agreement.
W/N petitioners may be relieved from their obligations in the contract that turned out to be
financially disadvantageous to them.
There has been an existence of a partnership between the parties. Petitioners would contribute
property to the partnership in the form of land which was to be developed into a subdivision; while
respondent would give, in addition to his industry, the amount needed for the general expenses and
other costs. The income from the said project would be divided according to the stipulated percentage.
Clearly, the contract manifested the intention of the parties to form a partnership.
Under Art. 1315 of CC, contracts bind the parties not only to what has been expressly stipulated,
but also to all necessary consequences. Courts are not authorized to extricate parties from the
necessary consequences of their acts, and the fact that the contractual stipulations may turn out to be
financially disadvantageous will not relieve parties thereto of their obligations. They cannot now
disavow the relationship formed from such agreement due to their supposed misunderstanding of its
Cuenco vs. Vda. Manguerra

On September 19, 1970, the respondent filed the initiatory complaint herein for specific
performance against Petitioner which averred, inter alia that her father, the late Don Mariano Jesus
Cuenco and petitioner formed the ‘Cuenco and Cuenco Law Offices’; that on or around August 4, 1931,
the Cuenco and Cuenco Law Offices served as lawyers in two cases entitled ‘Valeriano Solon versus Zoilo
Solon’ (Civil Case 9037) and ‘Valeriano Solon versus Apolonia Solon’ (Civil Case 9040) involving a dispute
among relatives over ownership of lot 903 of the Banilad Estate which is near the Cebu Provincial
Capitol; that records of said cases indicate the name of the [petitioner] alone as counsel of record, but in
truth and in fact, the real lawyer behind the success of said cases was the influential Don Mariano Jesus
Cuenco; that after winning said cases, the awardees of Lot 903 subdivided said lot into three (3) parts.
Petitioner later claimed the property after the death of his brother,

W/N petitioner may claim the said property.

Petitioner is estopped from asserting the contrary and claiming ownership thereof. The principle
of estoppel in pais applies when -- by one’s acts, representations, admissions, or silence when there is a
need to speak out -- one, intentionally or through culpable negligence, induces another to believe
certain facts to exist; and the latter rightfully relies and acts on such belief, so as to be prejudiced if the
former is permitted to deny the existence of those facts.

William Uy vs Bartolome Puzon GR. No. L-19819 October 26, 1977

Puzon entered into a contract with the Republic of the Philippines for the construction of a road
and 5 bridges. However, Puzon found difficulty in accomplishing both projects, so he established a
partnership with Uy as sub-contractor of the projects for financial assistance and the profits shall be
divided equally between them; the resulting partnership is “UP Construction Company”. The partners
agreed to contribute P50, 000 each as capital. However, Puzon failed to pay but promised to contribute
his share as soon as his application of loan with the PNB shall be approvedUpon approval of Puzon’s loan
with the PNB, he gave Uy P60, 000 for reimbursement of Uy’s contribution and Puzon’s contribution to
the partnership capital. Puzon assigned to PNB all payments to be received on account of the contracts
with the Bureau of Public Highways for the construction; this was done without the knowledge and
consent of Uy. Financial demands of the project increased, thus, Uy called on Puzon to place his capital
contribution; Puzon failed to do so. Uy thereafter sent letters of demand to which Puzon replied that he’s
not capable of putting additional capital. Puzon wrote UP Construction Company terminating their
subcontract agreement.

W/N the respondent violated the terms on partnership agreement against Uy.

The appellant not been remiss in his obligations as partner and as prime contractor of the
construction projects in question as he was bound to perform pursuant to the partnership and
subcontract agreements, and considering the fact that the total contract amount of these two projects is
P2,327,335.76, it is reasonable to expect that the partnership would have earned much more than the
P334,255.61 We have hereinabove indicated. The award, therefore, made by the trial court of the
amount of P200,000.00, as compensatory damages, is not speculative, but based on reasonable
Elmo Munasque vs. CA

The petitioner entered into a contract with tropical for remodeling a portion of its building.
Ralan was casually named as partner in the contract; that by virtue of his having introduced the
petitioner to the employing company. Monasque indorsed the check that tropical gave him for its 1st
payment in favor of Ralan however, Galan allegedly spent 6,183.37 for his personal use. Instead of
Munasque the second check was issued in the name of “Ralan and Associates”. The construction was
continued through Munasque’s sole efforts by incursing debts from various suppliers.

Issue: W/N The obligation of Munasque and Ralan is solidary.

The obligation is solidary because the law protects him, who in good faith relied upon the
authority of a partner, whether such authority is real or apparent. Tropical had every reason to believe
that a partnership existed between Munasque and Galan and no fault or error can be imputed against it
for making payments to “Galan and Associates” because as far as it was concerned, Galan was a true
partner with real authority to transact in behalf of the partnership it was dealing with (because in the
first place they entered into a duly registered partnership name and secondly, Munasque endorsed the
first check payment to Galan). This is even more true in the cases of the intervenors who supplied
materials on credit to the partnership. Thus, it is but fair that theconsequences of any wrongful act
committed by any of the partners therein should be answered solidarily by all the partners and the
partnership as a whole. However, as between Munasque and Galan, Galan must reimburse Munasque
for the payments made to the intervenors as it was satisfactorily established that Galan acted in bad
faith in his dealings with Munasque as a partner

Island Sales vs United Pioners

The defendant company, a general partnership duly registered under the laws of the Philippines,
purchased from the plaintiff a motor vehicle on the installment basis. The plaintiff sued the defendant
company for the unpaid balance. The defendant Bejamin Daco and Noel C. Lim moved to reconsider the
decision claiming that since there are five general partners, the joint and subsidiary liability of each
partner should not exceed onefifth of the obligations of the defendant company.

W/N the dismissal of the complaint to favor one of the general partners of a partnership
increases the joint and subsidiary liability of each of the remaining partners for the obligations of the

In the instant case there were five general partners when the promissory note in question was
executed for and in behalf of the partnership. Since the liability of the partners is pro rata, the liability of
the appellant Daco shall be limited to only onefifth of the obligations of the defendant company. The
fact that the complaint against the def. Lumaig was dismissed, upon motion of the plaintiff, does not
unmake the said defendant as a general partner in the company. The plaintiff merely condoned
Lumaig’s individual liability to the plaintiff.
Lim vs. Phil. Fishing Gear Industries Inc.

Chua and Yao entered into a contract for the purchase of fishing nets of various sizes to the
respondent. The claimed that they were engaged in a business venture with petitioner, who however
was not a signatory to the agreement. The buyers failed to pay for the fishing nets and the floats. Private
respondents filed a collection suit against Chua, Yao and Lim.

W/N petitioner Lim is liable.

It is clear that Chua, Yao and Lim had decided to engage in a fishing business, which they started
by buying boats worth P3.35 million, financed by a loan secured from Jesus Lim. Lim Tong Lim cannot
argue that the principle of corporation by estoppels can only be imputed to Yao and Chua.
Unquestionably, Lim Tong Lim benefited from the use of the nets found in his boats, the boat which has
earlier been proven to be an asset of the partnership. Lim, Chua and Yao decided to form a corporation.
Although it was never legally formed for unknown reasons, this fact alone does not preclude the
liabilities of the three as contracting parties in representation of it. Clearly, under the law on estoppel,
those acting on behalf of a corporation and those benefited by it, knowing it to be without valid
existence, are held liable as general partners.

Santiago Syjuco Inc. Vs Castro GR 70403 July 7, 1989

The private respondents, Eugenio Lim, et al., borrowed from petitioner Santiago Syjuco, Inc., the
sum of P800,000.00. The loan was given on the security of a first mortgage on property registered in the
names of said borrowers as owners in common under Transfer Certificates of Title Numbered 75413 and
75415 of the Registry of Deeds of Manila. Thereafter, additional loans on the same security were
obtained by the private respondents from Syjuco, so that as of May 8, 1967, the aggregate of the loans
stood at P2,460,000.00, exclusive of interest, and the security had been augmented by bringing into the
mortgage other property, also registered as owned pro indiviso by the private respondents under two
titles: TCT Nos. 75416 and 75418 of the Manila Registry. Respondents failed to pay it despite demands.
W/N a conveyance executed by the entire partners pass all their rights in such property.
Art. 1819 of the Civil Code, which contemplates a situation similar to the case at bar. It states
that ‘where the title to real property is in the names of all the partners, a conveyance executed by the
entire partners pass all their rights in such property. Consequently, those members' acts, declarations
and omissions cannot be deemed to be simply the individual acts of said members, but in fact and in
law, those of the partnership. Finally, the Supreme Court emphasizes that the right of the private
respondents to assert the existence of the partnership could have been stressed at the time they
instituted their first action, considering that the actions involved property supposedly belonging to it,
and therefore, the partnership was the real party in interest. What was done by them was to split their
cause of action in violation of the well-known rule that only one suit may be instituted for a single cause
of action.
Preqoio F. Ortega, Tomas O. Del Castillo, Jr., and Benjamin T. Bacorro vs. Hon. Court of Appeals; GR No.
109248 July 3, 1995

The law firm of Ross, Laurence, Selph and Carrascoso was duly registered with the Securities and
exchange Commission. Petitioners filed with Commission’s Securities Investigation and Clearing
Department a petition for dissolution and liquidation of partnership. The Commission ruled that, being a
partnership at will, the law firm could be dissolved by any partner at anytime, such as by his withdrawal
therefrom, regardless of good faith of bad faith.

W/N a partnership at will may be dissolve regardless of good faith or bad faith.
Any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will.
He must however, act in good faith, not that the attendance of bad faith can prevent the dissolution of
the partnership but that it can result in a liability for damages.
Among partners, mutual agency arises and the doctrine of deludes personae allows to have th
power, although not necessarily the right, to dissolve the partnership. Upon its dissolution, the
partnership continues and its legal personality is retained until the complete ______ up of its business
culminating in its termination.

Benjamin Yu VS. National Labor Relations Commission

GR No. 97212 June 30, 1993

The petitioner used to be the assistant General Manager of Jade Mountain, a partnership
engaged in marble quarrying and export business. The majority of the founding partners sold their
interests in said partnership to Co and Zapanta without Yu’s knowledge. It operated on the same name
as the partnership continues its operation but it did not anymore avail of the services of Yu.

Issue: W/N the changes in the membership of the partnership may dissolve the old partnership.

The legal effect of the changes in the membership of the partnership is the dissolution of the old
partnership which had hired Yu and the emergence of a new firm composed of Co and Zapanta. Without
winding up the business affairs of old partnership, paying off its debts, liquidating and distributing its net
assets, and then reassembling the said assets or most of them and opening a new business enterprise.
The new partnership is liable to pay damages of illegal dismissal, recovery of unpaid wages and other
damages incurred by the new partnership. Not only the retiring partners but also the new partnership
itself would continue the bussness of the old, dissolved, one, are liable for the debts of the preceding
Ildos vs CA GR. No. 110782 Sept. 25, 1998

Alarilla and Idos formed a partnership which the decided to terminate after a year. Idos issued
four post-dated checks to pay Alarilla on his share of the asset. However, the third checked was
dishonored for insufficiency of funds. He demanded payment but Idos failed to pay. Idos claimed that
the checks were issued as assurance of Alarilla’s share in the assets of the partnership and that it was
supposed to be deposited until the stocks were sold.

Issue: W/N the termination of the partnership automatically dissolved the partnership.

Termination is the point in time after all the partnership affairs have been wound up. The
agreement between the partners to terminate the partnership did not automatically dissolved the
partnership. They were in the process of winding-up when the check in question was issued. The unsold
goods and uncollected receivables which ware presented as evidenced that showed the existence of
The check was issued by the petitioner to respondent as a partner to another and not as a
payment by debtor to creditor.

Lilibeth Sunga-Chan and Cecilia Sunga vs. Lamberto T. Chua, GR No. 143340 August 15, 2001

The respondent filed a complaint against petitioners, the daughter and wife of the deceased
Jacinto L. Sunga wherein Chua entered into a partnership with Jacinto. After the death of Jacinto the
petitioners herein did not respond to the demand of Chua for accounting, inventory, appraisal, winding
up and restitution of his net shares in the partnership. He sued them on the ground for winding up of
Partnership Affairs, accounting, appraisal and recovery of shares.

Issue: W/N the dissolution immediately terminate the partnership.

Considering that the death of a partner results in the dissolution of the partnership, in this case,
it was Jacinto’s death that Chua as the surviving partner had the right to an account of his interest as
against Lilibeth. It bears stressing that while Jacitos’s death dissolve the partnership, the dissolution did
not automatically terminate the partnership. The law 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.
Luzviminda J. Villareal, Diogenes Villareal and Carmelito Jose vs. Donaldo Efren C. Ramirez GR No.
144214 July 14, 2003

The petitioners formed a partnership for the operation of a restaurant and catering business.
They closed down the restaurant, allegedly because of increased rental. The respondents wrote
petitioners saying that they were no longer interested in continuing their partnership or in reopening
the restaurant. And requested for the return of their onehalf share in the equity of the partnership.

Issue: W/N the petitioners are required for the return of the onethird share in the equity of the

The Supreme Court speaking through justice Panganiban hold that respondents have no right to
demand from petitioners the return of their equity share. 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.

Heirs of Tan Eng Kee vs CA GR No. 126881 October 3, 2000

Facts: Tan End Kee and Tan Eng Lay, pooling their resources and industry together, entered into
partnership engaged in the business of selling lumber and hardware and construction supplies.
Petitioners claimed that Tan End 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 Eng Kee and his heirs of their rightful participation in the profits of the business.

W/N Tan Eng Kee and Tan Eng Lay were partners in Benguet Lumber.

There was no partnership at all. Except for the firm name, there was no firm account, no firm
letterheads submitted as evidence, no certificate of partnership, no agreement as to the profits and
losses, and no time fixed for the duration of partnership. There was even no attempt to submit an
accounting corresponding to the period after the war until Kee’s death. It had no business book, no
written account nor any memorandum for that matter and no license mentioning the existence of a
Recentes vs. CFI of Zamboanga Del Norte

Conception V. Zosa filed a complaint in the CFI of Zamboanga del Norte against Recentes, de
Gracia and Mered for accounting and payment of money alleged to be due to her as heir partner in
Zamboanga Ports Terminal and Arrastre Service. Zosa asked the court to appoint Merced as receiver of
partnership and the court granted favor of Zosa, Merced as receiver. However, Recentes and de Gracia
filed a motion to annul and dissolve the receivership since they alleged that partnership was no longer
existed because its term of ten years already expired.

Issue: W/N the partnership of the petitioners already dissolved.

On dissolution the partnership is terminated, but continues until the winding up of partnership
affairs is completed. Obviously, all the questioned orders are intended to wind up the partnership affairs
in an orderly manner and to protect the interest of the plaintiff who is the private respondent in this
case. Winding up is the process of liquidation of assets of a corporation or partnership, settling
accounts, paying debts and liabilities, distributing remaining assets to partners or shareholders, and
then dissolving the business.