G.R. No.

159333             July 31, 2006

ARSENIO T. MENDIOLA, petitioner, 
vs.
COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, PACIFIC FOREST
RESOURCES, PHILS., INC. and/or CELLMARK AB, respondents.

PUNO, J.:

Facts:
Petitioner Mendiola (ATM) entered into a Side Agreement with Pacfor (USA) who will set up a
representative office in the Philippines. They named said office as Pacfor Phils in which
petitioner is president. In the agreement, petitioner’s base salary and the company’s overhead
expenditures shall be borne by the representative office and shall be funded by Pacfor/ATM
being equally owned on 50-50 equity by ATM and Pacfor-USA.

The Side Agreement was later amended through a Revised Operating and Profit Sharing
Agreement where petitioner’s salary was increased. However, both agreements show that the
operational expenses will be borne by the representative office and funded by all parties “as
equal partners,” while the profits and commissions will be shared among them.

Years later, petitioner wrote Pacfor’s VP for Asia seeking confirmation of his 50% equity of
Pacfor Phils to which Pacfor’s President replied that petitioner is not a part-owner, his office
being just a representative office, a “theoretical company with the purpose of dividing the
income 50-50.” He even stressed that the petitioner knew of this arrangement from beginning,
having been the one to propose to them the setting up of a representative office, instead of a
branch office, to save on taxes.

Issue:
Whether or not a partnership or co-ownership exists between the parties.

Held:
Petitioner is an employee of Pacfor and no partnership or co-ownership exists between the
parties.

In a partnership, the members become co-owners of what is contributed to the firm capital and
of all property that may be acquired thereby and through the efforts of the members. The
property or stock of the partnership forms a community of goods, a common fund, in which each
party has a proprietary interest. In fact, the New Civil Code regards a partner as a co-owner of
specific partnership property. Each partner possesses a joint interest in the whole of partnership
property. If the relation does not have this feature, it is not one of partnership. 

This essential element, the community of interest, or co-ownership of, or joint interest in
partnership property is absent in the relations between petitioner and private respondent Pacfor.
Petitioner is not a part-owner of Pacfor Phils. Pacfor's President established this fact when he
said that Pacfor Phils. is simply a "theoretical company" for the purpose of dividing the income
50-50. He stressed that petitioner knew of this arrangement from the very start, having been the
one to propose to private respondent Pacfor the setting up of a representative office, and "not a
branch office" in the Philippines to save on taxes. Thus, the parties in this case, merely shared
profits. This alone does not make a partnership.

Besides, a corporation cannot become a member of a partnership in the absence of express

authorization by statute or charter. This doctrine is based on the following considerations: (1)
that the mutual agency between the partners, whereby the corporation would be bound by the
acts of persons who are not its duly appointed and authorized agents and officers, would be
inconsistent with the policy of the law that the corporation shall manage its own affairs
separately and exclusively; and, (2) that such an arrangement would improperly allow corporate
property to become subject to risks not contemplated by the stockholders when they originally
invested in the corporation. No such authorization has been proved in the case at bar.
JOSEFINA P. REALUBIT vs. PROSENCIO D. JASO and EDENG JASO
G.R. No. 178782           September 21, 2011

FACTS

Petitioner Josefina Realubit entered into a Joint Venture Agreement with Francis Eric
Amaury Biondo, a French national, for the operation of an ice manufacturing business. With
Josefina as the industrial partner and Biondo as the capitalist partner, the parties agreed
that they would each receive 40% of the net profit, with the remaining 20% to be used for
the payment of the ice making machine which was purchased for the business. For and in
consideration of the sum of P500,000.00, however, Biondo subsequently executed a Deed of
Assignment transferring all his rights and interests in the business in favor of respondent
Eden Jaso, the wife of respondent Prosencio Jaso.With Biondo’s eventual departure from the
country, the Spouses Jaso caused their lawyer to send Josefina a letter apprising her of their
acquisition of said Frenchmans share in the business and formally demanding an accounting
and inventory thereof as well as the remittance of their portion of its profits.

Faulting Josefina with unjustified failure to heed their demand, the Spouses Jaso
commenced the instant suit for specific performance, accounting, examination, audit and
inventory of assets and properties, dissolution of the joint venture, appointment of a
receiver and damages. The said complaint alleged that the Spouses Realubit had no gainful
occupation or business prior to their joint venture with Biondo and that aside from
appropriating for themselves the income of the business, they have fraudulently concealed
the funds and assets thereof thru their relatives, associates or dummies. The Spouses
Realubit claimed that they have been engaged in the tube ice trading business under a
single proprietorship even before their dealings with Biondo.

The RTC rendered its Decision discounting the existence of sufficient evidence from
which the income, assets and the supposed dissolution of the joint venture can be
adequately reckoned. Upon the finding, however, that the Spouses Jaso had been
nevertheless subrogated to Biondos rights in the business in view of their valid acquisition of
the latters share as capitalist partner. On appeal before the CA, the foregoing decision was
set aside

upon the following findings that the Spouses Jaso validly acquired Biondos share in the
business which had been transferred to and continued its operations and not dissolved as
claimed by the Spouses Realubit.

ISSUES

1.       Whether there was a valid assignment or rights to the joint venture

2.       Whether the joint venture is a contract of partnership

3.       Whether Jaso acquired the title of being a partner based on the Deed of Assignment

RULING

1.       Yes. As a public document, the Deed of Assignment Biondo executed in favor

of Eden not only enjoys a presumption of regularity but is also considered prima
facie evidence of the facts therein stated.  A party assailing the authenticity and due
execution of a notarized document is, consequently, required to present evidence that is
clear, convincing and more than merely preponderant. In view of the Spouses Realubits
failure to discharge this onus, we find that both the RTC and the CA correctly upheld the
authenticity and validity of said Deed of Assignment upon the combined strength of the
above-discussed disputable presumptions and the testimonies elicited from Edenand Notary
Public Rolando Diaz.

2.       Yes. Generally understood to mean an organization formed for some temporary
purpose, a joint venture is likened to a particular partnership or one which has for its object
determinate things, their use or fruits, or a specific undertaking, or the exercise of a
profession or vocation. The rule is settled that joint ventures are governed by the law on
partnerships which are, in turn, based on mutual agency or delectus personae.

3.       No. It is evident that the transfer by a partner of his partnership interest does not
make the assignee of such interest a partner of the firm, nor entitle the assignee to interfere
in the management of the partnership business or to receive anything except the assignees
profits. The assignment does not purport to transfer an interest in the partnership, but only
a future contingent right to a portion of the ultimate residue as the assignor may become
entitled to receive by virtue of his proportionate interest in the capital. Since a partner’s
interest in the partnership includes his share in the profits, we find that the CA committed no
reversible error in ruling that the Spouses Jaso are entitled to Biondos share in the profits,
despite Juanitas lack of consent to the assignment of said Frenchmans interest in the joint
venture. Although Eden did not, moreover, become a partner as a consequence of the
assignment and/or acquire the right to require an accounting of the partnership business,
the CA correctly granted her prayer for dissolution of the joint venture conformably with the
right granted to the purchaser of a partner’s interest under Article 1831 of the Civil Code.