G.R. No. 172690 Heirs of Jose Lim rep. by Elenito Lim vs.

Juliet Villa
Lim;March 3, 2010

Facts:

Juliet Lim was the widow of Elfledo Lim, the eldest son of Jose Lim who had a
partnership agreement with Jimmy Yu and Norberto Uy. Jose died and Elfledo
took over the business which flourished under his management. He was able to
buy trucks and real property under his name. Eventually, Norberto and
Elfledo died and there was a distribution of the partnership properties. The
petitioner-heirs asked Juliet Lim to do an accounting of Elfledo’s estate as they
claimed that they were co-owners thereof but Juliet refused as she claimed that
Jose’s partnership with Jimmy and Norberto ceased upon his demise and that
Elfledo himself was a partner and so, such properties were their conjugal
properties.

Issue: Who was the partner between Jose Lim and Elfledo Lim?

Held: It is Elfledo Lim, based on the evidence presented regardless of Jimmy

Yu’s testimony in court that Jose Lim was the partner. If Jose Lim was the
partner, then the partnership would have been dissolved upon his death A
partnership is dissolved upon the death of the partner. Further, no evidence
was presented as to the articles of partnership or contract of partnership
between Jose, Norberto and Jimmy. Unfortunately, there is none in this case,
because the alleged partnership was never formally organized. the Supreme
Court noted that based on the functions performed by Elfledo, he is the actual
partner. Furthermore, petitioners failed to adduce any evidence to show that
the real and personal properties acquired and registered in the names of
Elfledo and Juliet formed part of the estate of Jose, having been derived from
Jose’s alleged partnership with Jimmy and Norberto. Elfledo was not just a
hired help but one of the partners in the trucking business, active and visible
in the running of its affairs from day one until this ceased operations upon his
demise. The extent of his control, administration and management of the
partnership and its business, the fact 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 partner and a controlling one at
that.

G.R. No. 148187 Philex Mining Corporation vs. CIR; April 16, 2008

Facts:

Petitioner entered into an agreement with Baguio Gold Mining Corporation for
the former to manage the latter’s mining claim known as the Sto. Niño Mining
Claim. Eventually, the mine suffered continuing losses which resulted in the
latter’s withdrawal as manager of the mine. Petitioner deducted the debt of
Baguio Gold from its gross income in its annual income tax return. BIR
disallowed it as deduction for bad debt. Petitioner claimed that it entered a
contract of agency evidenced by the “power of attorney” executed by them and
the advances made by petitioners is in the nature of a loan and thus can
be deducted from its gross income. Court of Tax Appeals (CTA) rejected the
claim and held that it is a partnership rather than an agency. CA affirmed CTA

Issue: Whether or not it is an agency.

Held: No. The lower courts correctly held that the “Power of Attorney” (PA) is
the instrument material that is material in determining the true nature of
the business relationship between petitioner and Baguio. An examination of
the said PA reveals that a partnership or joint venture was indeed intended by
the parties. While a corporation like the petitioner cannot generally enter into a
contract of partnership unless authorized by law or its charter, it has been held
that it may enter into a joint venture, which is akin to a particular partnership.
The PA indicates that the parties had intended to create a PAT and establish a
common fund for the purpose. They also had a joint interest in the profits of
the business as shown by the 50-50 sharing of income of the mine.

Jarantilla vs. Jarantilla; G.R. No. 154486; December 1, 2010

FACTS: The spouses Andres Jarantilla and FelisaJaleco were survived by eight
children: Federico Sr., Delfin, Benjamin, Conchita, Rosita, Pacita, Rafael and
Antonieta. Petitioner Federico Jarantilla, Jr. is the grandchild of the late
Jarantilla spouses by their son Federico Jarantilla, Sr. and his wife Leda
Jamili. Petitioner also has two other brothers: Doroteo and Tomas Jarantilla.

The Jarantilla heirs extrajudicially partitioned amongst themselves the real

properties of their deceased parents. With the exception of the real property
adjudicated to Pacita Jarantilla, the heirs also agreed to allot the produce of
the said real properties for the years 1947-1949 for the studies of Rafael and
Antonieta Jarantilla.

Sps. Rosita Jarantilla and Vivencio Deocampo entered into an agreement with
the spouses Buenaventura Remotigue and Conchita Jarantilla to provide
mutual assistance to each other by way of financial support to any commercial
and agricultural activity on a joint business arrangement. This proved to be
successful as they were able to establish a manufacturing and trading
business, acquire real properties, and construct buildings, among other things.
The same ended in 1973 upon their voluntary dissolution.

The spouses Buenaventura and Conchita Remotigue executed a document

Acknowledgement of Participating Capital stating the participating capital of of
their co-owners as of the year 1952, with Antonieta Jarantillas stated as eight
thousand pesos (P8,000.00) and Federico Jarantilla, Jr.s as five thousand
pesos (P5,000.00).

The controversy started when Antonieta filed a complaint against

Buenaventura, Cynthia, Doroteo and Tomas, for the accounting of the assets
and income of the co-ownership, for its partition and the delivery of her share
corresponding to eight percent (8%), and for damages. She alleged that the
initial contribution of property and money came from the heirs inheritance,
and her subsequent annual investment of seven thousand five hundred pesos
(P7,500.00) as additional capital came from the proceeds of her farm.

Respondents denied having formed a partnership. They did not deny the
existence and validity of the "Acknowledgement of Participating Capital" and in
fact used this as evidence to support their claim that Antonietas 8% share was
limited to the businesses enumerated therein. Petitioner Federico Jr joined his
aunt Antonieta and likewise asserted his share in the supposed partnership.

The RTC rendered judgment in favor of Antonieta and Federico. On appeal, the
CA set the RTC Decision. Petitioner filed a petition for review to the SC.

ISSUE: Are petitioners not entitled to profits over the businesses not listed in
the Acknowledgement?
HELD: There is a co-ownership when an undivided thing or right belongs
to different persons. It is a partnership when two or more persons bind
themselves to contribute money, property, or industry to a common fund,
with the intention of dividing the profits among themselves.

The common ownership of property does not itself create a partnership between
the owners, though they may use it for the purpose of making gains; and they
may, without becoming partners, agree among themselves as to the
management, and use of such property and the application of the proceeds
therefrom.

Under Article 1767 of the Civil Code, there are two essential elements in a
contract of partnership: (a) an agreement to contribute money, property or
industry to a common fund; and (b) intent to divide the profits among the
contracting parties.

It is not denied that all the parties in this case have agreed to contribute
capital to a common fund to be able to later on share its profits. They have
admitted this fact, agreed to its veracity, and even submitted one common
documentary evidence to prove such partnership - the Acknowledgement of
Participating Capital.

The Acknowledgement of Participating Capital is a duly notarized document

voluntarily executed by Conchita Jarantilla-Remotigue and Buenaventura
Remotigue in 1957. Petitioner does not dispute its contents and is actually
relying on it to prove his participation in the partnership. Article 1797 of the
Civil Code provides:

Art. 1797. The losses and profits shall be distributed in conformity with the
agreement. If only the share of each partner in the profits has been agreed
upon, the share of each in the losses shall be in the same proportion.

In the absence of stipulation, the share of each partner in the profits and losses
shall be in proportion to what he may have contributed, but the industrial
partner shall not be liable for the losses.

The petitioner himself claims his share to be 6%, as stated in the

Acknowledgement of Participating Capital. However, petitioner fails to realize
that this document specifically enumerated the businesses covered by the
partnership: Manila Athletic Supply, Remotigue Trading in Iloilo City and
Remotigue Trading in Cotabato City. Since there was a clear agreement that
the capital the partners contributed went to the three businesses, then there is
no reason to deviate from such agreement and go beyond the stipulations in
the document. Therefore, the Court of Appeals did not err in limiting
petitioners share to the assets of the businesses enumerated in the
Acknowledgement of Participating Capital.

In Villareal v. Ramirez, the Court held that since a partnership is a separate

juridical entity, the shares to be paid out to the partners is necessarily limited
only to its total resources.

***
The petitioner further asserts that he is entitled to respondents properties
based on the concept of trust. He claims that since the subject real properties
were purchased using funds of the partnership, wherein he has a 6% share,
then "law and equity mandates that he should be considered as a co-owner of
those properties in such proportion."

As a rule, the burden of proving the existence of a trust is on the party

asserting its existence, and such proof must be clear and satisfactorily show
the existence of the trust and its elements. While implied trusts may be proved
by oral evidence, the evidence must be trustworthy and received by the courts
with extreme caution, and should not be made to rest on loose, equivocal or
indefinite declarations. Trustworthy evidence is required because oral evidence
can easily be fabricated.

The petitioner has failed to prove that there exists a trust over the subject real
properties. Aside from his bare allegations, he has failed to show that the
respondents used the partnerships money to purchase the said properties.
Even assuming arguendo that some partnership income was used to acquire
these properties, the petitioner should have successfully shown that these
funds came from his share in the partnership profits. After all, by his own
admission, and as stated in the Acknowledgement of Participating Capital, he
owned a mere 6% equity in the partnership.

DENIED.

G.R. No. 143340 Sunga-Chan vs. Chua; August 15, 2001

In 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 Jacinto’s 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 Chua’s action has prescribed.

ISSUE: Whether or not Chua’s claim is barred by prescription.

HELD: No. The action for accounting filed by Chua three (3) years after Jacinto’s
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 partner’s 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 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 Jacinto’s 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.

G.R. No. 188288; Spouses Viloria vs. Continental Airlines, Inc.; January
16, 2012

n 1997, while the spouses Viloria were in the United States, they approached
Holiday Travel, a travel agency working for Continental Airlines, to purchase
tickets from Newark to San Diego. The travel agent, Margaret Mager, advised the
couple that they cannot travel by train because it was already fully booked; that
they must purchase plane tickets for Continental Airlines; that if they won’t
purchase plane tickets; they’ll never reach their destination in time. The couple
believed Mager’s representations and so they purchased two plane tickets worth
$800.00.

Later however, the spouses found out that the train trip wasn’t really fully booked
and so they purchased train tickets and went to their destination by train instead.
Then they called up Mager to request for a refund for the plane tickets. Mager
referred the couple to Continental Airlines. As the couple were now in the
Philippines, they filed their request with Continental Airline’s office in Ayala. The
spouses Viloria alleged that Mager misled them into believing that the only way
to travel was by plane and so they were fooled into buying expensive plane
tickets.

Continental Airlines refused to refund the amount of the tickets and so the
spouses sued the airline company. In its defense, Continental Airlines claimed
that the tickets sold to them by Mager were non-refundable; that, if any, they
were not bound by the misrepresentations of Mager because there’s no contract
of agency existing between Continental Airlines and Mager.

The trial court ruled in favor of spouses Viloria but the Court of Appeals reversed
the ruling of the RTC.
ISSUE: Whether or not a contract of agency exists between Continental Airlines
and Mager.
HELD: Yes. All the elements of agency are present, to wit:

1. there is consent, express or implied of the parties to establish the relationship;

2. the object is the execution of a juridical act in relation to a third person;
3. the agent acts as a representative and not for himself, and
4. the agent acts within the scope of his authority.

The first and second elements are present as Continental Airlines does not deny
that it concluded an agreement with Holiday Travel to which Mager is part of,
whereby Holiday Travel would enter into contracts of carriage with third persons
on the airlines’ behalf. The third element is also present as it is undisputed that
Holiday Travel merely acted in a representative capacity and it is Continental
Airlines and not Holiday Travel who is bound by the contracts of carriage entered
into by Holiday Travel on its behalf. The fourth element is also present
considering that Continental Airlines has not made any allegation that Holiday
Travel exceeded the authority that was granted to it.

Continental Airlines also never questioned the validity of the transaction between
Mager and the spouses. Continental Airlines is therefore in estoppel. Continental
Airlines cannot be allowed to take an altogether different position and deny that
Holiday Travel is its agent without condoning or giving imprimatur to whatever
damage or prejudice that may result from such denial or retraction to Spouses
Viloria, who relied on good faith on Continental Airlines’ acts in recognition of
Holiday Travel’s authority. Estoppel is primarily based on the doctrine of good
faith and the avoidance of harm that will befall an innocent party due to its
injurious reliance, the failure to apply it in this case would result in gross travesty
of justice.