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Eligio Estanislao, Jr.

 The financial resport of Dec 31, 1968 shows that the business was able to make a
profit of P87,293.79 and that by the year ending 1969, a profit of P150,000 was
Vs realized.
CA, Remedios Estanislao, Emilio and Leocadio Santiago

 Thus, on August 25, 1970, private respondents filed a complaint in the CFI Rizal
against petitioner praying that the latter be ordered:
Whether or not a partnership exists between members of the same faily arising from their
joint ownership of certain properties.  To execute a public document embodying all the provisions of the partnership
agreement entered into between plaintiffs and defendant as provided in Art
1771 of the NCC;
 Petitioner and private respondents are brothers and sisters who are co-owners of
 To render a formal accounting of the business operation covering the period
certain lots at the corner of Annapolis and Aurora Blvd., QC which were then being
from May 6, 1966 up to the time the order is issued and that the same be
leased to Shell.
subject to proper audit;
 They agreed to open and operate a gas station thereat to be known as Estanislao
 To pay the plaintiffs their lawful shares and participation in the net profits of the
Shell Service Statetion with an initial investment of P15,000 to be taken from advance
business in an amount of no less than P150,000 with interest at the rate of 1% per
rentals due to them from Shell for the occuancy of said lots owned in common by
month from date of demand until full payment thereof for the entire duration of
them.
the business; and
 April 11, 1996 - A joint affidavit was executed by them which was prepared by Atty
 To pay the plaintiffs the amount of P10,000 as attorney’s fees and cost of the
Angeles.
suit.
 They agreed to help their brother, petitioner herein, by allowing him to operate and
manage the gasoline service station of the family.
 October 15, 1975 - The trial court dismissed the complaint (Judge Anover, temporary
 They negotiated with Shell.
presiding judge)
 For practucal purposes and in order not to run counter to the company’s policy of
 Respondents file an MR (Tensuan appointed presiding judge) set aside the aforesaid
appointing only 1 dealer, it was agreed that petitioner would apply for the
decision & rendered another decision in favor of respondents.
dealership.

 Respondent Remedios helped in comanaging the business with petitioner (May 3,


1996 - February 16, 1967).  Petitioner appealed to CA; CA affirmed RTC.

 Hence, this petition for certiorari.

 May 26, 1996, the parties herein entered into an Additional Cash Pledge Agreement
with Shell wherein it was reiterated that the P15,000 advance rental shall be
deposited with Shell to cover advances of fuel to petitioner as dealer and HELD:
supersedes the Joint Affidavit.

Petitioner’s contention: In the aforesaid Joint affidavit, it is clearly stipulated by the parties
 For sometime, the petitioner submitted financial statements regarding te operation that the P15k advance rental due to them from Shell shall augment their “capital
of the business to private respondents, but thereafter petitioner failed to render investment” in the operation of the gasoline station, which advance rentals shall be
subsequent accounting. credited as rentals.

 Hence, through Atty. Angeles, a demand was made on petitioner to render and
accounting of the profits.
In the subsequent document entitled Additional Cash Pledge Agreement, the private
respondents and petitioner assigned to Shell the monthly rentals due them , which private
respondents agree to be cash deposit of petitioner in favor of Shell to increase him credit
limit as dealer. As stated in the said document, it provided that, “This agreement, therefore,  Petitioners are the heirs of the late Jose Lim, namely:
cancels and supersedes the Joint Affidavit executed by the OWNERS.”
 Cresencia Palad - widow

 Elenito, Evelia, Imelda, Edelyna, Edison - their children


Petitioner contends that because of said stipulation cancelling and superseding the
previous Joint Affidavit, whatever partnership agreement there was in said previous  They filed a Complaint for Partition, Accounting, and Damages against
agreement had thereby been abrogated. Juliet (widow of the Late Elfeldo Lim, who was the eldest son of Jose and
Cresencia.

SC

 Petitioners alleged thatJose was the liaison officer of Interwood Sawmill in


Cagisay, Mauban, Quezon.
We find no merit in this argument. Said cancelling provision was necessary for the Joint
Affidavit speaks of P15,000 advance rentals starting May 25, 1996 while the latter  Sometime in 1980, Jose, together with Jimmy Yu & Norberto Uy, formed a
agreement also refers to advance rentals of the same amount starting May 24, 1996. There partnership to engage in the trucking business.
is, therefore, a duplication of reference to the P15,000 hence, the need to provide in the
subsequent document that it “cancels and supersedes” the previous one. True it is that in  With a contribution of P50k each, they purchased a truck for hauling and
the latter document, it is silent as to the statement in the Joint Affidavit that the P15,000 transport of lumber of the sawmill.
represents the “capital investment” of the parties in the gasoline station business and it
speaks of petitioner as the sole dealer, but this is as it should be for the latter document  Jose managed the operations of this trucking business until death (Aug 15,
Shell was a signatory and would be against its policy if in the agreement it should be stated 1981).
that the business is a partnership with private respondents and not a sole proprietorship of
petitioner.  Thereafter, Jose’s heirs, uncluding Elfledo, and partners agreed to continue
the business under the management of Elfeldo.

Moreover, other evidence in the record shows that there was in fact such partnership  The shares in the partnership profits and income that formed part of the
agreement between prties. This is attested by the testimonies of private respondent estate of Jose wre held in trust by Elfeldo, with petitioners’ authority for
Remedios and Atty. Angeles. Petitioner submitted to private respondents periodic Elfeldo to use, purchase or acquire properties using said funds.
accounting of the usiness. Petitioner gave a written authority to Remedios to examine and
audit the books of their “common business” (aming negosyo). Remedios assisted in the
running of the business. There is no doubt that the parties hereto formed a partnership
when they bound themselves to contribute money to a common fund with the intention of  Petitioners also alleged that, at that time, Elfeldo was a fresh commerce
dividing the profits among themselves. The sole dealership by the petitioner and the graduate serving as his father’s driver in the trucking business. He was never
issuance of all government permits and licenses in the name of petitioner was in a partner or an investos in the business and merely supervised the purchase
compliance with the afore-stated policy of Shell and the understanding of the parties of of additional trucks using the income from trucking business of the partners.
having only one dealer of the Shell products. Petitioners asservated that it was also through Elfesldo’s management of
the partnership that he was able to purchase numerous real properties by
using the profits derived therefrom, all of which were registered in his name
CA judgment AFFIRMED in toto. and respondent.

 In addition to the 9 trucks, Elfeldo also acquired 5 other motor vehicles.


Heirs of Jose Lim represented by Eleenito Lim

Vs  May 18, 1995 - Elfeldo died, respondent being his sole heir.
Juliet Villa Lim
 Petitioners claimed that respondent took over the administration of the
aforementioned properties, which belonged to the estate of Jose, without
their consent and approval.  RTC - Decision in favor of petitioners - properties to be partitioned equally
among them; Juliet to submit an accounting of all incomes, profits, and
 Claiming that they are co-owners of the properties, petitioners required rentals.
respondent to submit an accounting of all income, profits, and rentals
received from the Estate of Elfeldo, and to surrender the administration  CA - reversed & set aside RTC’s decision.
thereof.
Supreme Court - Petition for Review on Certiorari
 Respondent refues; thus, the filing of this case.

Petitioners: According to the testimony of Jimmy, the sole surviving partner,


 Juliet traversed petitioners’ allegations and claimed that Elfeldo was himself Elfeldo was not a partner; and that he and Norberto enterd into a partnership
a partner of Norberto and Jimmy. with Jose. Thus, CA erred.

 Juliet also claimed that per testimony of Cresencia, sometime in 1980, Jose
gave Elfeldo P50k as the latter’s capital in an informal partnerhship with
Respondent: In light of the admissions of Cresencia and Edison and the
Jimmy and Norberto.
testimony of respondent, the testimony of Jimmy was effectively refuted;
 When Elfeldo & Juliet got maried in 1981, the partnership had only 1 truck; accordingly, the CA’s reversal of the RTC’s findings was fully justified.
but through her husband’s efforts, the business flourished.

 Other than the trucking business, Elfeldo & Juliet enganged in other business
Supreme Court: On the merits of the case, we find that the instant Petition is
ventures. Thus, they were able to buy real properties.
bereft of merit.
 When Norberto was ambushed & killed on July 16, the trucking business
starter to falter.
A partnership exists when 2 or more persons agree to place their money, effects,
 When Elfeldo died on May 1995 due to heart attack, reposndent talked to
labor, and skill in lawful commerce or business, with the understanding that there
Jimmy and the heirs of Norberto, as she could no longer run the business.
shall be a proportionate sharing of the profits and losses among them.
 Jimmy sugested that 3 out of 9 trucks be given to him as his share, while the
other 3 trucks be given to Norberto. However Norberto’s wife was not
interested in the vehicles. Thus, she sold the same to respondent, who paid A contract of partnership is defined by the Civil Code as one where two or more
for them in installments. persons bind themselves to contribute money, property, or industry to a
common fund, with the intention of dividing the profits among themselves.

 Respondent also alleged that when Jose died in 1981, he left no known
assets, and the partnership with Jimmy and Norberto ceased upon his Undoubtedly, the best evidence would have been the contract of partnership
demise. Respondent also stressed that Jose left no properties that Elfledo or the articles of partnership. Unfortunately, there is none in this case, because
could have held in trust. Respondent maintained that all the properties the alleged partnership was never formally organized.
involved in this case were purchased and acquired through her and her
husband’s joint efforts and hard work, and without any participation or
contribution from petitioners or from Jose. Respondent submitted that these
Nonetheless, we are asked to determine who between Jose and Elfledo was the
are conjugal partnership properties; and thus, she had the right to refuse to
“partner” in the trucking business.
render an accounting for the income or profits of their own business.
A careful review of the records persuades us to affirm the CA decision. The (e) As the consideration for the sale of a goodwill of a business or other
evidence presented by petitioners falls short of the quantum of proof required to property by installments or otherwise.”
establish that:

(1) Jose was the partner and not Elfledo; and


Applying the legal provision to the facts of this case, the following circumstances
(2) all the properties acquired by Elfledo and respondent form part of the tend to prove that Elfledo was himself the partner of Jimmy and Norberto:
estate of Jose, having been derived from the alleged partnership.
1) Cresencia testified that Jose gave Elfledo P50,000.00, as share in the
partnership, on a date that coincided with the payment of the initial capital in
the partnership;
Petitioners heavily rely on Jimmy’s testimony. But that testimony is just one piece
of evidence against respondent. It must be considered and weighed along with 2) Elfledo ran the affairs of the partnership, wielding absolute control, power and
petitioners’other evidence vis-à-vis respondent’s contrary evidence. In civil authority, without any intervention or opposition whatsoever from any of
cases, the party having the burden of proof must establish his case by a petitioners herein;
preponderance of evidence.
3) All of the properties, particularly the nine trucks of the partnership, were
registered in the name of Elfledo;

At this juncture, our ruling in Heirs of Tan Eng Kee v. Court of Appeals is 4) Jimmy testified that Elfledo did not receive wages or salaries from the
enlightening. Therein, we cited Article 1769 of the Civil Code, which provides: partnership, indicating that what he actually received were shares of the profits
of the business; and

5) None of the petitioners, as heirs of Jose, the alleged partner, demanded


“Art. 1769. In determining whether a partnership exists, these rules shall apply: periodic accounting from Elfledo during his lifetime.
(1) Except as provided by Article 1825, persons who are not partners as to each
other are not partners as to third persons;
As repeatedly stressed in Heirs of Tan Eng Kee, a demand for periodic
(2) Co-ownership or co-possession does not of itself establish a partnership, accounting is evidence of a partnership.
whether such co-owners or co-possessors do or do not share any profits made
by the use of the property;

(3) Partnership, whether or not the persons sharing them have a joint or common Furthermore, petitioners failed to adduce any evidence to show that the real
right or interest in any property from which the returns are derived; and personal properties acquired and registered in the names of Elfledo and
respondent formed part of the estate of Jose, having been derived from Jose’s
(4) The receipt by a person of a share of the profits of a business is a prima facie alleged partnership with Jimmy and Norberto.
evidence that he is a partner in the business, but no such inference shall be
drawn if such profits were

received in payment: Finally, we agree with the judicious findings of the CA, to wit: “The above
testimonies prove that Elfledo was not just a hired help but one of the partners in
(a) As a debt by installments or otherwise; the trucking business, active and visible in the running of its affairs from day one
(b) As wages of an employee or rent to a landlord; until this ceased operations upon his demise. The extent of his control,
administration and management of the partnership and its business, the fact
(c) As an annuity to a widow or representative of a deceased partner; that its properties were placed in his name, and that he was not paid salary or
other compensation by the partners, are indicative of the fact that Elfledo was a
(d) As interest on a loan, though the amount of payment vary with the partner and a controlling one at that. It is apparent that the other partners only
profits of the business; contributed in the initial capital but had no say thereafter on how the business
was ran. Evidently it was through Elfredo’s efforts and hard work that the  The Agreement has the following provisions relevant to the issues in these
partnership was able to acquire more trucks and otherwise prosper. cases on the nomination and election of the directors of the corporation:

It is notable too that Jose Lim died when the partnership was barely a year old, “3. Articles of Incorporation
and the partnership and its business not only continued but also flourished. If it
were true that it was Jose Lim and not Elfledo who was the partner, then upon his
death the partnership should have been dissolved and its assets liquidated. A. The Articles of Incorporation shall be substantially in the form
annexed hereto as Exhibit A and insofar as permitted under Philippine Law,
shall specifically provide for
On the contrary, these were not done but instead its operation continued under
the helm of Elfledo and without any participation from the heirs of Jose Lim.
(1) Cuulative voting for directors:

Whatever properties appellant and her husband had acquired, this was through
their own concerted efforts and hard work. 5. Management
WHEREFORE, the instant Petition is DENIED. The assailed Court of Appeals
Decision dated June 29, 2005 is AFFIRMED.
A. The management of the Corporation shall be vested in a Board of
Luciano E. Salazar Directors, which shall consist of 9 individuals. As long as American-Standard shall
Vs. own at least 30% of the outstanding stock of the Corporation, 3 of the 9 directors
shall be designated by American-Standard, and the other 6 shall be designated
Sanitary Wares Manufacturing Corp, Ernesto V. Lagdameo, Ernesto R. by the stockholders of the corporation.
Lagdameo Jr, Enrique Lagdameo, George Lee, Raul Boncan, Baldwin Young,
Avelino Cruz, & CA.
 At the request of ASI, the agreement contained provisions designed to
protect it as a minority group, including the grant of veto powers over a
 In 1961, Saniwares, a domestic corporation was incorporated for the number of corporate acts and the right to designate certain officers, such
primary purpose of manufacturing and marketing sanitary wares. as a member of the Executive Committee whose vote was required for
important corporate transactions.
 One of the incorporators, Mr. Baldwin Young, went abroad to look for
foreign partners, European or American who could help in its expansion.  Later, the 30% capital stock of ASI was increased to 40%.

 August 15, 1962 - ASI, a foreign corporation domiciled in Delaware, US  The corporation was also registered with the Board of Investments for
entered into an agreement with Saniwares and some Filipino investors availment of incentives with the condition that at least 60% of the capital
whereby ASI and the Filipino investors agreed to participate in the stock of the corporation shall be owned by Philippine Nationals.
ownership of an enterprise which would engage primarily in the business of
manufacturing in the Philippines and selling here and abroad vitreous china  The joint enterprise thus entered into by the Filipino investors and the
and sanitary wares. American corporation prospered.

 Th parties agreed that the business operations in the Philippines shall be  Unfotunately, with the business successes, there came a deterioration of
carried on by an incorporated enterprise and that the name of the the initially harmonious relations between the 2 groups.
corporation shall be “Sanitary Wares Manufacturing Corporation”
 According to the Filipino group: A basic was disagreement was due to the
desire to expand the export operations of the company to which ASI
objected as it apparently had other subsidiaries of the joint venture groups
in the countries where Philippine exports were contemplated.

 March 8, 1983, the annual stockholders’ meeting was held. The meeting
was presided by Baldwin Young. The minutes were taken by the Secretary
Avelino Cruz. After disposing of the preliminary items in the agenda, the
stockholders then proceeded to the election of the members of the board
of directors.

 The ASI group nominated 3 persons, namely: Wolfgang Aurbach, John


Griffin and David Whittingham.

 The Philippine Inestors nominated 6, namely: Ernesto Lagdameo, Sr., Raul


Boncan, Ernesto R. Lagdameo Jr., George Lee, and Baldwin Young.

 Mr Eduardo Ceniza then nominated Mr. Luciano Salazar, who in turn


nominated Mr. Charles Chamsay.

 The chairman, Baldwin Young ruled the last 2 nominations out of order on
the basis of Sec. 5 (a) of the Agreement, the consistent practice of the
parties during the past annual stockholders’ meetings to nominate only 9
persons as nominees for the 9-member board of directors, and the legal
advice of Saniwares’ legal counsel. The following events then, transpired:

 There were protests against the action of the Chairman and heated
arguments ansued.

 An appeal was made by the ASI rep. to the body of stockholders present
that a vote be taken on the ruling of the Chairman.

 The Chairman, Baldwin Young, declared the appeal out of order and no
vote on the ruling was taken.

 The Chairman then instructed the Corporate Secretary to cast