G.R. No. 101847 May 27, 1993 LOURDES NAVARRO AND MENARDO NAVARRO, petitioners, vs.

COURT
OF APPEALS, JUDGE BETHEL KATALBAS-MOSCARDON, Presiding Judge, Regional Trial Court of Bacolod
City, Branch 52, Sixth Judicial Region and Spouses OLIVIA V. YANSON AND RICARDO B.
YANSON,respondents.

FACTS:

Private respondent Olivia V. Yanson and Petitioner Lourdes Navarro were engaged in the business of Air Freight
Service Agency. Pursuant to the Agreement which they entered, they agreed to operate the said Agency; It is the
Private Respondent Olivia Yanson who supplies the necessary equipment and money used in the operation of the
agency. Her brother in the person of Atty. Rodolfo Villaflores was the manager thereof while petitioner Lourdes
Navarro was the Cashier; In compliance to her obligation as stated in their agreement, private respondent
brought into their business certain chattels or movables or personal properties. However, those personal
properties remain to be registered in her name; Among the provisions stipulated in their agreement is the equal
sharing of whatever proceeds realized from their business; However, sometime on July 23, 1976, private
respondent Olivia V. Yanson, in order for her to recovery the above mentioned personal properties which she
brought into their business, filed a complaint against petitioner Lourdes Navarro for "Delivery of Personal
Properties With Damages and with an application for a writ of replevin. Private respondents' application for a writ
of replevin was later approved/granted by the trial court. For her defense, petitioner Navarro argue that she and
private respondent Yanson actually formed a verbal partnership which was engaged in the business of Air
Freight Service Agency. She contended that the decision sustaining the writ of replevin is void since the
properties belonging to the partnership do not actually belong to any of the parties until the final disposition and
winding up of the partnership.

ISSUE:

1. Whether or not there was a partnership that existed between the parties.

2. Whether the properties that were commonly used in the operation of Allied Air Freight belonged to the alleged
partnership business.

RULING:

Article 1767 of the New Civil Code defines the contract of partnership: Art. 1767. By the contract of partnership
two or more persons bind themselves to contribute money, property, or industry to a common fund, with the
intention of dividing the proceeds among themselves. A cursory examination of the evidences presented no proof
that a partnership, whether oral or written had been constituted. In fact, those movables brought by the plaintiff
for the use in the operation of the business remain registered in her name. While there may have been co-
ownership or co-possession of some items and/or any sharing of proceeds by way of advances received by both
plaintiff and the defendant, these are not indicative and supportive of the existence of any partnership between
them. Art. 1769 par. 2 provides: Co-ownership or co-possession does not of itself establish a partnership,
whether such co-owners or co-possessors do or do not share any profits made by the use of the property”
Besides, the alleged profit was a difference found after valuating the assets and not arising from the real
operation of the business. In accounting procedures, strictly, this could not be profit but a net worth.