Acebedo Cpt|ca| v CA

lacLs ACl Applled for a buslness permlL before Cfflce of Lhe Mayor of lllgan ClLy AfLer
hearlng Lhe sldes of local opLomeLrlsLs Mayor Cablll of lllgan granLed Lhe permlL buL he
aLLached varlous speclal condlLlons whlch baslcally made Acebedo's dependenL upon
prescrlpLlons Lo be lssued by local opLomeLrlsLs Acebedo ls noL allowed Lo pracLlce
opLomeLry wlLhln Lhe clLy Acebedo however acqulesced Lo Lhe sald condlLlons and
operaLed under Lhe permlL LaLer Acebedo was charged for vlolaLlng Lhe sald
condlLlons and was subsequenLly suspended from operaLlng wlLhln lllgan Acebedo
Lhen assalled Lhe valldlLy of Lhe aLLached condlLlons 1he local opLomeLrlsLs argued LhaL
Acebedo ls esLopped ln assalllng Lhe sald condlLlons because lL acqulesced Lo Lhe same
and LhaL Lhe lmposlLlon of Lhe speclal condlLlons ls a valld exerclse of pollce power LhaL
such condlLlons were enLered upon by Lhe clLy ln lLs proprleLary funcLlon hence Lhe
permlL ls acLually a conLracL
ISSUL WheLher or noL Lhe speclal condlLlons aLLached by Lhe mayor ls a valld exerclse of
pollce power
nLLD nC Acebedo was applylng for a buslness permlL Lo operaLe lLs buslness and noL Lo
pracLlce opLomeLry (Lhe laLLer belng wlLhln Lhe [urlsdlcLlon 8C 8oard of CpLomeLry)
1he condlLlons aLLached by Lhe mayor ls ulLra vlres hence cannoL be glven any legal
appllcaLlon Lherefore esLoppel does noL apply lL ls nelLher a valld exerclse of pollce
power 1hough Lhe mayor can deflnlLely lmpose condlLlons ln Lhe granLlng of permlLs
he musL base such condlLlons on law or ordlnances oLherwlse Lhe condlLlons are ulLra
vlres LasLly Lhe granLlng of Lhe llcense ls noL a conLracL lL ls a speclal prlvllege
esLoppels does noL apply

SLAkA1L CCNCUkkING CINICN
kAUNAN
l concur wlLh Lhe oplnlon of Mr !usLlce urlslma ln addlLlon l would llke Lo sLaLe Lhe
followlng 1he lssues LhaL presenL Lhemselves ln Lhe case aL bar are Lhe followlng llrsL
can a corporaLlon whlch ls noL a naLural person engage ln Lhe pracLlce of opLomeLry?
Second can a corporaLlon by employlng opLomeLrlsLs as an lncldenL Lo and ln Lhe
ordlnary course of lLs buslness of selllng opLlcal wares supplles subsLances and
lnsLrumenLs be sald Lo be lndlrecLly pracLlclng opLomeLry? 1hlrd are Lhe commerclal
resLrlcLlons ln Lhe buslness llcense a proper exerclse of pollce power under Lhe speclflc
clrcumsLances of Lhls case?
l
1he rule ls LhaL Lhe corporaLe pracLlce of any professlon lncludlng opLomeLry musL never be
sancLloned 1he publlc pollcy behlnd such rullngs ls unlversal and ls based on Lhe
noLlon LhaL Lhe eLhlcs of any professlon ls based upon lndlvldual responslblllLy personal
accounLablllLy and lndependence whlch are all losL where one verlly acLs as a mere
agenL or alLer ego of unllcensed persons or corporaLlons
ll
1he second quesLlon provldes no easy answer and acLually depends on Lhe facLs and
clrcumsLance surroundlng a parLlcular case WhaL ls wellseLLled however ls LhaL ln Lhe
absence of a sLaLuLe speclflcally prohlblLlng a corporaLlon from hlrlng duly llcensed
opLomeLrlsLs Lhe employmenL by such corporaLlon of sald professlonals ls noL
LanLamounL Lo pracLlce of opLomeLry by Lhe corporaLlon lLself 1hus ln Samahan ng
CpLomeLrlsLs sa lllplnas eL al vs Acebedo lnLernaLlonal CorporaLlon
1
we held LhaL
x x x 1he facL LhaL prlvaLe respondenL hlres opLomeLrlsLs who pracLlce Lhelr professlon ln Lhe
course of Lhelr employmenL ln prlvaLe respondenLs opLlcal shops does noL LranslaLe
lnLo a pracLlce of opLomeLry by prlvaLe respondenL lLself rlvaLe respondenL ls a
corporaLlon creaLed and organlzed for Lhe purpose of conducLlng Lhe buslness of selllng
opLlcal lenses or eyeglasses among oLhers 1he cllenLele of prlvaLe respondenL
undersLandably would largely be composed of persons wlLh defecLlve vlslon and Lhus
need Lhe proper lenses Lo correcL Lhe same and enable Lhem Lo galn normal vlslon 1he
deLermlnaLlon of Lhe proper lenses Lo sell Lo prlvaLe respondenLs cllenLele enLalls Lhe
employmenL of opLomeLrlsLs who have been preclsely Lralned for LhaL purpose rlvaLe
respondenLs buslness ls noL Lhe deLermlnaLlon lLself of Lhe proper lenses needed by
persons wlLh defecLlve vlslon rlvaLe respondenLs buslness raLher ls Lhe buylng and
lmporLlng of eyeglasses and lenses and oLher slmllar or allled lnsLrumenLs from
suppllers Lhereof and selllng Lhe same Lo consumers
lor peLlLloners argumenL Lo hold waLer Lhere need be clear showlng LhaL 8A no 1998
prohlblLs a corporaLlon from hlrlng opLomeLrlsLs for only Lhen would lL be undenlably
evldenL LhaL Lhe lnLenLlon of Lhe leglslaLure ls Lo preclude Lhe formaLlon of Lhe socalled
opLomeLry corporaLlons because such ls LanLamounL Lo Lhe pracLlce of Lhe professlon of
opLomeLry whlch ls legally exerclsable only by naLural persons and professlonal
parLnershlps We have carefully revlewed 8A no 1998 however and we flnd noLhlng
Lhereln LhaL supporLs peLlLloners lnslsLenL clalms
lL ls lnLeresLlng Lo noLe LhaL durlng Lhe SenaLe dellberaLlons on Lhe enacLmenL of 8A 803 0
a wldelydebaLed and hlghly conLroverslal provlslon dlrecLly prohlblLlng Lhe lndlrecL
pracLlce of opLomeLry was evenLually deleLed from Lhe orlglnal blll and was Lherefore
noL lncluded ln Lhe flnal verslon of Lhe law
2
1haL orlglnal provlslon sLaLes
rohlblLlon agalnsL Lhe lndlrecL racLlce of CpLomeLryno person naLural or [urldlcal oLher
Lhan an opLomeLrlsL ln good sLandlng or a parLnershlp composed solely of opLomeLrlsLs
shall hlre employ [oln wlLh or oLherwlse use Lhe servlces of an opLomeLrlsL for Lhe
purpose of pracLlclng opLomeLry rovlded however 1haL Lhls prohlblLlon shall noL
apply Lo Lhe governmenL of Lhe hlllpplnes or any of lLs agencles or lnsLrumenLallLles
and Lo persons who are exempLed under Lhe lmmedlaLe precedlng secLlon
8y deleLlng Lhe aforequoLed conLroverslal provlslon and by dellberaLely falllng Lo provlde
one dlrecLly addresslng Lhe maLLer of wheLher or noL dulyllcensed opLomeLrlsLs may
pracLlce Lhelr professlon as employees of corporaLlons lL ls evldenL LhaL lL was Lhe
leglslaLlve lnLenL Lo leave Lo Lhe [udlclary Lhe resoluLlon of whaLever lssues LhaL may
arlse ln Lhe appllcaLlon of Lhe law SenaLor Shahanl explalned
1he opLomeLry bllls have evoked conLroverslal vlews from Lhe Members of Lhe panel Whlle
we reallze Lhe need Lo upllfL Lhe sLandards of opLomeLry as a professlon Lhe consensus
of boLh Pouses was Lo avold Louchlng senslLlve lssues whlch properly belong Lo [udlclal
deLermlnaLlon 1hus Lhe blcameral conference commlLLee declded Lo leave Lhe lssue of
lndlrecL pracLlce of opLomeLry and Lhe use of Lrade names open Lo Lhe wlsdom of Lhe
CourLs whlch are vesLed wlLh Lhe prerogaLlve of lnLerpreLlng Lhe laws
3

Whlle Lhe hlrlng by corporaLlons of opLomeLrlsLs does noL necessarlly LranslaLe lnLo Lhe
corporaLe pracLlce of professlon whlch ls wlLhouL quesLlon prohlblLed and agalnsL
publlc pollcy facLual relaLlonshlps beLween Lhe corporaLlon and Lhe employee
opLomeLrlsL have been lnqulred lnLo by some courLs ln Lhe unlLed SLaLes Lo deLermlne
wheLher or noL Lhere ls an unauLhorlzed corporaLe pracLlce of Lhe professlon LhaL ls
wheLher or noL lL ls Lhe corporaLlon and noL lLs llcensed employees whlch ls unduly
engaged ln Lhe pracLlce of opLomeLry
ln many cases Lhe measure of conLrol ls parLlcularly deLermlnaLlve
4
Where lL appears LhaL
Lhe opLlcal company has Lhe power of regulaLlon or conLrol of Lhe professlonal acLlvlLles
of Lhe llcensed opLomeLrlsLs lncludlng corporaLlons power Lo dlsmlss and lncludlng
any lnfluence over Lhe mode and manner of eye examlnaLlons and resulLlng
professlonal [udgmenLs Lhe reclprocal arrangemenL ls held Lo consLlLuLe Lhe unllcensed
pracLlce of opLomeLry
3
ln anoLher case adverLlsemenL of Lhe corporaLlon ls a facLor
Where a sLaLuLe provldes LhaL a person llcensed Lo pracLlce opLomeLry ls forbldden Lo
adverLlse pracLlce or aLLempL Lo pracLlce under a name oLher Lhan hls
own
6
adverLlsemenL of Lhe corporaLlon ls held Lo lead Lhe publlc Lo belleve LhaL lL
(Lhe corporaLlon) ls pracLlclng opLomeLry 1hls provlslon accordlng Lo Lhe courL ls
cerLalnly anLagonlsLlc Lo Lhe vlew LhaL a corporaLlon mlghL pracLlce opLomeLry Lhrough
a llcensed opLomeLrlsL
1he manner of compensaLlon has also been held Lo be an lmporLanL facLor ln deLermlnlng
wheLher or noL a corporaLlon ls unlawfully engaged ln Lhe pracLlce of opLomeLry
Where Lhe corporaLlon exerclses ln any manner conLrol over Lhe paymenL of fees Lo be
charged by Lhe opLomeLrlsL
7
where an opLomeLrlsL recelves a monLhly salary from Lhe
corporaLlon purporLlng Lo be a percenLage of paymenLs made by cerLaln
cusLomers
8
and where Lhe prescrlpLlon does noL carry Lhe name of Lhe llcensed
opLomeLrlsL buL raLher LhaL of Lhe corporaLe defendanL such has been held as
sufflclenL lndlcaLlons LhaL Lhere ls unlawful corporaLe pracLlce of Lhe professlon
9

ln Lhls case Lhe lmposlLlon of condlLlons by Lhe respondenL mayor ln Lhe buslness permlL
was premaLure Lhere belng no facLual basls for hlm Lo conclude wheLher or noL Lhere
was a danger LhaL corporaLe pracLlce of opLomeLry was Lo Lake place should Lhe
buslness permlL Lo operaLe an opLlcal shop be granLed Lo Lhe peLlLloner 1he condlLlons
on Lhe buslness permlL were lmposed even before peLlLloner began operaLlng lLs opLlcal
shop ln lllgan clLy Lhe alleged breach of whlch was Lhe basls for Lhe permlLs
cancellaLlon and Lhe lnsLlLuLlon of Lhls case ln courL lL was noL wlLhln respondenL
mayors funcLlons Lo deLermlne Lhe proper scope and appllcaLlon of Lhe CpLomeLry Law
by lmposlng Lhe condlLlons ln Lhe buslness permlL
lll
ln Lhls connecLlon l do noL fully share wlLh Lhe vlew LhaL Lhe exerclse of Lhe opLomeLrlsLs
speclallzaLlon ls no dlfferenL from Lhe pracLlce of oLher regulaLed professlons whlch can
be done lndlvldually or ln assoclaLlon wlLh dulyllcensed colleagues only
SecLlon 3 of 8A 8030 deflnes opLomeLry as
1he sclence and arL of examlnlng Lhe human eye analyzlng Lhe ocular funcLlon prescrlblng
and dlspenslng ophLhalmlc lenses prlsms conLacL lenses and Lhelr accessorles and
soluLlons low vlslon alds and slmllar appllances and devlces conducLlng ocular
exerclses vlslon Lralnlng orLhopLlcs lnsLalllng prosLheLlcs uslng auLhorlzed dlagnosLlc
pharmaceuLlcal agenLs (uA) and oLher prevenLlve or correcLlve measures or
procedures for Lhe ald correcLlon rehablllLaLlon or rellef of Lhe human eye or Lo aLLaln
maxlmum vlslon and comforL
1he words ophLhalmologlsL opLomeLrlsL and opLlclan Lhough closely relaLed should
be dlsLlngulshed An opLhalmologlsL ls a duly llcensed physlclan who speclallzes ln Lhe
care of eyes CpLomeLrlsLs merely examlne Lhe eyes for refracLlve error recognlze (buL
does noL LreaL) dlseases of Lhe eye and flll prescrlpLlons for eyeglasses
10
CpLomeLrlsLs
also adapL frames and lenses Lo overcome errors of refracLlon and resLores as nearly as
posslble wlLh Lhese mechanlcal appllances normal human vlslon 1he opLlclan ls
engaged ln Lhe buslness of furnlshlng lenses Lo cusLomers on Lhe prescrlpLlons of
llcensed opLomeLrlsLs or quallfled physlclans puLLlng Lhe lenses lnLo frames selecLed by
Lhe cusLomer and flLLlng Lhe frames Lo Lhe face
11

CpLomeLry ls dlsLlngulshed from oLher professlons by Lhe naLure of relaLlonshlps creaLed
beLween Lhe opLomeLrlsL and Lhe cllenL lL has been held LhaL Lhe LradlLlonal
relaLlonshlp beLween physlclan and paLlenL does noL exlsL ln Lhe pracLlce of opLomeLry
slnce such pracLlce lnvolves no relaLlonshlp of LrusL and confldence as exlsLs beLween a
physlclan and a paLlenL or as beLween an aLLorney and cllenL 1he argumenL ls LhaL
conslderlng Lhe naLure and scope of Lhe opLomeLrlsLs funcLlons no such LrusL
relaLlonshlp exlsLs and consequenLly Lhere ls no publlc pollcy Lo be subserved by
prohlblLlng opLomeLrlsLs Lo pracLlce Lhelr professlon as employees of corporaLlons ln
Lhe case of Sllver v Lansburgh a uS CourL held
xxx 8oLh ln Lhe case of Lhe physlclan and Lhe lawyer Lhe person seeklng hls servlces musL
break down Lhe barrlers of reserve whlch oLherwlse serve Lo proLecL hlm and
dellberaLely reveal Lo hls professlonal advlser secreLs of physlcal or menLal dlsablllLy or
secreLs of buslness of Lhe mosL lnLlmaLe naLure 1hese necessary dlsclosures creaLe Lhe
personal relaLlonshlp whlch cannoL exlsL beLween paLlenL or cllenL and a proflLseeklng
corporaLlon 1he unlversal recognlLlon of Lhls lmmedlaLe unbroken and confldenLlal
assoclaLlon beLween docLor and lawyer and Lhose who engage Lhelr servlces early
creaLed and sLlll [usLlfles Lhe rule LhaL Lhelr alleglance musL be wholehearLedly Lo Lhe
paLlenL or Lhe cllenL noL Lo anoLher noLhlng of Lhls naLure applles Lo Lhe pracLlce of
opLomeLry
12

CpLomeLrlsLs musL also exerclse Lhe amounL of care sklll and dlllgence whlch ls exerclsed
generally ln Lhe communlLy by oLher pracLlLloners ln Lhe same fleld and as ls mandaLed
by Lhe rules regulaLlng Lhelr professlon wherever and however Lhey pracLlce Lhelr
professlon CpLomeLry has also been dlsLlngulshed from oLher professlons ln LhaL Lhe
selllng of servlces ln Lhe former ls lnLerLwlned wlLh Lhe selllng of goods lL has been
held LhaL Lhe opLomeLrlsL and opLlclan are also engaged ln Lhe sale of a producL
correcLlve lenses and accordlngly Lhe acLlvlLles of an opLomeLrlsL lle beLween Lhose
assoclaLed wlLh Lhe pracLlce of a professlon and Lhose characLerlsLlc of a merchandlslng
concern
13

AnenL Lhe quesLlon of wheLher opLomeLrlsLs may pracLlce Lhelr professlon as employees of
corporaLlons many courLs ln Lhe unlLed SLaLes have based Lhelr declslons on Lhe
dlsLlncLlons and dlfferences ln Lhe requlred degree of learnlng and Lralnlng requlred
Cenerally such declslons depend on wheLher Lhe courLs classlfy opLomeLry as a mere
mechanlcal arL or as a learned professlon such as law or medlclne Where courLs
conslder opLomeLry as a mere mechanlcal arL opLomeLrlsLs are noL prevenLed from
belng employed ln corporaLlons Lhe courLs holdlng LhaL where Lhe sLaLuLe lLself does
noL speclflcally conLrol Lhe reasons for prevenLlng Lhe pracLlce of law and medlclne Lo
corporaLlons do noL apply Lo opLomeLry ln Lhe case of Sllver v Lansburgh Co Lhe
courL found
x x x CpLomeLry ls a mechanlcal arL whlch requlres sklll and a knowledge of Lhe use of
cerLaln mechanlcal lnsLrumenLs and appllances deslgned Lo measure and record Lhe
errors and devlaLlons from Lhe normal found ln Lhe human eye buL ls noL a learned
professlon comparable Lo law medlclne and Lheology and LhaL Lhough cerLaln
sLandards of educaLlon are prescrlbed by Lhe sLaLuLe and by rules of Lhe board creaLed
under lL opLomeLry ls noL a parL of medlclne
14

1he uS CourL of Appeals for Lhe ulsLrlcL of Columbla Lo whlch Lhe aforemenLloned case was
appealed dld concede LhaL ln Lhelr vlew opLomeLry ls a professlon as Lhe Lerm ls
colloqulally used noneLheless Lhe courL also sald LhaL Lhere ls no reason why a
corporaLlon cannoL employ llcensed opLomeLrlsL 1hus
x x x buL LhaL facL ls noL enough Lo brlng Lhe rule lnLo effecL 1here ls no more reason Lo
prohlblL a corporaLlon organlzed for Lhe purpose from employlng llcensed
opLomeLrlsLs Lhan Lhere ls Lo prohlblL slmllar employmenL of accounLanLs archlLecLs or
englneers We know of no lnsLance ln whlch Lhe rlghL ln any of Lhese cases has ever
been challenged Lhough unlversally all are deemed professlons
13

lv
1he assalled condlLlons lmposed ln Lhe sub[ecL buslness permlL are ulLra vlres because Lhey
are unreasonable ollce power ls ofLen characLerlzed as Lhe mosL essenLlal lnslsLenL
and Lhe leasL llmlLable of powers exLendlng as lL does Lo all Lhe greaL publlc needs
16
lL
ls Lhe lnherenL and plenary power ln Lhe SLaLe whlch enables lL Lo prohlblL all LhaL ls
hurLful Lo Lhe comforL safeLy and welfare of socleLy
17

ln Lhe area of local governmenLs Lhe pollce power of a munlclpallLy exlsLs solely by vlrLue of
leglslaLlve or consLlLuLlonal granL
18
ln vlew however of Lhe consLlLuLlonal granL of
local auLonomy Lhe argumenL on presumpLlon of reasonableness ln Lhe exerclse of Lhe
pollce power by local governmenL may be persuaslve 8uL Lhls awesome characLer of
pollce power ls noL wlLhouL llmlLs because Lhe deLermlnaLlon of whaL ls proper exerclse
of such power ls sub[ecL Lo Lhe supervlslon of Lhe courLs
19
1hls ls speclally Lrue ln Lhls
case where pollce power ls used Lo [usLlfy resLrlcLlon on Lhe rlghL Lo engage ln a
leglLlmaLe employmenL or buslness whlch rlghL recelves proLecLlon and recognlLlon as
a porLlon of Lhe lndlvldual freedoms secured by Lhe due process clause of Lhe
ConsLlLuLlon
A [usLlflcaLlon for a llcenslng requlremenL and oLher forms of resLrlcLlons generally requlres a
showlng LhaL Lhe measures aL leasL Lend Lo promoLe publlc healLh morals safeLy or
welfare Whenever a buslness ls affecLed wlLh publlc lnLeresL lL may be sub[ecL Lo
regulaLlon Lo proLecL Lhe publlc agalnsL danger and ln[usLlce Powever Lhe scope of
regulaLlons of Lrades and occupaLlon ls deLermlned by Lhe prlnclple LhaL an exerclse of
Lhe pollce power musL confer publlc beneflL commensuraLe wlLh Lhe burden lmposed
upon prlvaLe rlghLs and properLy and Lhe means adapLed musL be sulLable Lo Lhe end ln
vlew lmparLlal ln operaLlon and noL unduly oppresslve upon lndlvlduals
20
1he burden
lmposed musL noL lnLerfere wlLh rlghLs of prlvaLe properLy and freedom of conLracL
beyond Lhe necesslLy of Lhe slLuaLlon
21
1he LesL Lhus ls Lhe classlc reasonableness
and proprleLy of Lhe measures or means ln Lhe promoLlon of Lhe ends soughL Lo be
accompllshed
under Lhe rubrlc of general welfare whaL ls Lhe speclflc publlc pollcy lnvolved ln Lhe exerclse
of pollce power ln Lhls case? Cr ln consLlLuLlonal language whaL ls Lhe end soughL Lo be
achleved?
1he ClLy Mayor ln lLs commenL Lo Lhe peLlLlon clLes Lhe safeLy and wellbelng of Lhe people
of lllgan especlally Lhe poor and nalve among Lhem
22
1he SollclLor Ceneral on Lhe
oLher hand clLes proLecLlon of publlc morals healLh safeLy or welfare
23
and Lo
promoLe Lhe prosperlLy and general welfare of Lhe local governmenL unlL and lLs
lnhablLanLs
24
WlLh Lhe lack of dlscusslon ln Lhe pleadlngs on how Lhese general
concerns wlll be served by Lhe speclflc means adapLed we can only speculaLe
ln Lerms of promoLlng safeLy publlc healLh or welfare lL may be argued LhaL allowlng
corporaLlons Lo employ llcensed opLomeLrlsLs may compromlse professlonal
accounLablllLy 8ecause corporaLlons are generally seen as more concerned aL boLLom
wlLh proflLs Lhe moLlvaLlon Lo sell mlghL prevall over professlonal eLhlcs Agaln Lhls ls
mere speculaLlon !usL belng blg ls noL a sln under Lhe general scheme of Lhe equal
proLecLlon clause of our ConsLlLuLlon blgness should noL be a dlsadvanLage ln Lerms
of beneflLs conferred and llablllLles lmposed
!urlsprudence ln Lhe unlLed SLaLes ls repleLe wlLh cases on Lhe lssue of valldlLy of
governmenLal regulaLlons relaLlng Lo opLomeLry
23
ln a case upholdlng Lhe valldlLy of a
sLaLuLe prohlblLlng a corporaLlon from pracLlclng opLomeLry dlrecLly or lndlrecLly and
from employlng reglsLered opLomeLrlsL Lo examlne Lhe eyes of lLs cusLomers a uS courL
clLed Lhe publlc pollcy LhaL one who pracLlces a professlon ls apL Lo have less regard for
professlonal eLhlcs and Lo be less amenable Lo regulaLlon for Lhelr enforcemenL when
he has no conLracLual obllgaLlons Lo Lhe cllenL
26

1here are generally four Lypes of commerclal resLrlcLlons ln Lhe pracLlce of
opLomeLry
27
1hese are
1) LmploymenL 8esLrlcLlons whlch usually provlde LhaL lL ls unprofesslonal conducL or an
lllegal pracLlce for an opLomeLrlsL Lo accepL employmenL from unllcensed person or
nonprofesslonal CorporaLlons
28

2) 8esLrlcLlons on LocaLlon prohlblL opLomeLrlsL Lo work ln an offlce noL devoLed excluslvely
Lo Lhe pracLlce of opLomeLry or ln whlch maLerlals are dlsplayed perLalnlng Lo a
commerclal underLaklng noL relaLed Lo Lhe pracLlce of opLomeLry
3) 8ranch Cfflce 8esLrlcLlons usually seL a maxlmum number of branch Cfflces an
opLomeLrlsL may operaLe or requlre Lhe opLomeLrlsL Lo be on personal aLLendance a
cerLaln proporLlon of Llme Lhe offlce ls open Lo Lhe publlc
4) 1rade name 8esLrlcLlons declare lllegal or uneLhlcal for an opLomeLrlsL Lo pracLlce under a
name oLher Lhan hls or her name or under a false or assumed name 1hls lasL Lype of
resLrlcLlon has a dlsLlncL dlscrlmlnaLory lmpacL on nonprofesslonal corporaLlons
29

1he publlc pollcy clLed Lo [usLlfy Lhese dlfferenL Lypes of resLrlcLlons ls generally consumer
proLecLlon by ellmlnaLlon of lowquallLy servlces
30
Layemployed opLomeLrlsLs
31
may
employ varlous cosLcuLLlng Lechnlques llke brlef and lnadequaLe eye examlnaLlons ln
order Lo lncrease proflLs 1hose who pracLlce under a Lrade name lack personal
accounLablllLy and Lhe moLlvaLlon Lo malnLaln a personal repuLaLlon for hlghquallLy
servlce 1he managemenL of nonprofesslonal opLlcal flrms may llkewlse lnLerfere wlLh
Lhe docLorpaLlenL relaLlonshlp and professlonal [udgmenLs concernlng paLlenL
welfare 1hus Lhe argumenL ls offered LhaL commerclal pracLlce resLrlcLlons are
necessary Lo prevenL layemployed opLomeLrlsL from lncreaslng Lhelr markeL share by
selllng servlces aL lower prlces and subsLlLuLlng low for hlgh quallLy case wlLhouL
consumer recognlLlon of Lhe change ln quallLy
32

Closer Lo home Lhe SenaLe proceedlngs dlscusslng SenaLe 8lll no 1998 Lhe precursor of 8A
8030 ls enllghLenlng as Lo Lhe raLlonale behlnd Lhe orlglnal proposal Lo speclflcally
prohlblL employmenL by corporaLlons of opLomeLrlsLs
33

1he exchange beLween SenaLor Webb Chalrman of Lhe CommlLLee on PealLh and
uemography and SenaLor Macapagal ls lnsLrucLlve
SenaLor Macapagal Mr resldenL whaL l wlll ask comes from Lhe concern of corporaLlons
LhaL hlre opLomeLrlsLs WhaL Lhey would llke Lo know from Lhe CenLleman ls whaL ls Lhe
raLlonale behlnd prohlblLlng corporaLlons from engaglng Lhe servlces of opLomeLrlsLs
SenaLor Webb Mr resldenL a corporaLlon ls noL Lhe same as an lndlvldual human belng for
one Lhlng A corporaLlon cannoL be a docLor or a lawyer Cnly a human belng may be
permlLLed Lo pracLlce medlclne or law
x x x
1he opLomeLrlsL for one Lhlng has a pecullar relaLlonshlp wlLh a paLlenL and Lhls ls prlmarlly
based noL on proflL Lhough people wlll say LhaL one enLers a professlon prlmarlly Lo
make money 8uL under Lhelr Code of LLhlcs lL ls clearly sLaLed LhaL one goes Lhere as a
docLor prlmarlly Lo cure people
A corporaLlon Mr resldenL ls a dlfferenL enLlLy rlmarlly lL ls Lhere Lo make money ln
facL lf a corporaLlon were Lo hlre an opLomeLrlsL Lhen he ls dlvlded beLween hls loyalLy
Lo Lhe corporaLlon and hls love and affecLlon for hls paLlenL because a corporaLlon may
have a speclflc producL LhaL lL wanLs Lo push And as such an opLomeLrlsL ls Lold Lo
push a parLlcular producL for whaLever lL ls worLh kallangang lLulak naLln lLo sapagkaL
lLo ang aLlng produkLo
Sa opLomeLrlsL po ay hlndl ganoon sapagkaL wala kayong maklklLang abogado o dukLor na
nagaadverLlse na ang glnagamlL ay Lrade name or corporaLe name ln facL ln
adverLlsemenL Lhough noL very clear kung plnapayagan lLoy ay hlndl kayo puwedeng
gumamlL ng korporasyon kundl lyong mga pangalan AL lyan po ang lplnagbabawal
Plndl po lplnagbabawal ang pagpapaLuloy ng negosyo ng mga opLomeLrlsL Ang
lplnagbabawal lamang ay lyong korporasyon dahll alam naman naLlng pag mayroong
sakunang nangyarl ay napakahlrap ldlmanda ang korporasyon Plndl kaLulad ng lsang
Lao na personal and pagdadala ng serblsyo kaya mas madallng maLunLon ang kanlyang
pagkakamall hlndl kapareho ng lsang korporasyon
SenaLor Macapagal SuballL kung lhahamblng po naLln sa lsang hosplLal mayroong dukLor
lyong hosplLal aL nagkaroon ng sakuna nadldemanda rln naman lyong hosplLal Plndl
po ba pareho na rln lyon kung ldldemanda lyong korporasyon na mayroong
opLomeLrlsL na nagLaLrabaho doon?
SenaLor Webb 1ama po lyan ngunlL ang hosplLal ay regulaLed by Lhe ueparLmenL of PealLh
Ang korporasyon po ay hlndl man lamang regulaLed by rofesslonal 8egulaLlon
Commlsslon hlndl kapareho ng mga opLomeLrlsL Lhey are regulaLed Wala pong nag
reregulaLe sa korporasyon kung mayroon kayong opLlcal shop ngayon wala pong
nagreregulaLe dlyan kaya ang maaarlng mablgyan ng kasalanan ay lyong opLomeLrlsL
na nagLaLrabaho sa kanlla ngunlL slla po ay llbre sa kasong pagkakamall nabangglL dln
ng lsang korporasyon na napakaraml nllang Lrabahador na madldlsplace lyan po ay
aklng sasaguLln mamaya
34

AfLer lnLense lnLerpellaLlon by SenaLor Conzales SenaLor Webb conceded LhaL Lhe proposal
was also meanL Lo equallze Lhe playlng fleld beLween a corporaLlon and one
personally pracLlclng opLomeLry
33

Whlle Lhe abovemenLloned ob[ecLlves are leglLlmaLe Lhe means employed may be unduly
oppresslve upon lndlvlduals lor example one dlsLlncL feaLure of Lhe regulaLlon
lnvolved ls LhaL on lLs face lL purporLs Lo regulaLe buslness and commerce ln lLs
appllcaLlon and effecL however Lhe buslness llcense pracLlcally prohlblLs lndlvlduals
from seeklng leglLlmaLe employmenL from corporaLlons 1he nulllLy of Lhe regulaLlon
Lherefore arlses from lLs operaLlon
1haL Lhe exerclse of pollce powers ls sub[ecL Lo [udlclal revlew ls wlLhouL quesLlon ollce
powers belng Lhe mosL pervaslve and mosL demandlng of Lhe Lhree lnherenL powers of
Lhe SLaLe lLs exerclse ls noL unbrldled and musL ln all cases meeL Lhe LesLs of leglLlmacy
boLh ln Lhe ends lL seeks Lo achleve as well as ln Lhe means employed Lo achleve Lhem
Applylng such LesLs Lo Lhe presenL case Lherefore lL ls clear LhaL Lhe respondenL mayor
acLed ln excess of hls leglLlmaLe auLhorlLy 1he purporLed ends soughL Lo be achleved
go no deeper Lhan a reclLal of Lhe Ceneral Welfare clause le Lhe safeLy and well
belng of Lhe people safeguardlng Lhe general publlc especlally Lhe poor wlLhouL
esLabllshlng how Lhose goals could be reasonably achleved by lmposlng such condlLlons
ln Lhe permlL lurLhermore Lhe means employed effecLlvely deprlve opLomeLrlsLs of
baslc properLy rlghL LhaL ls Lhe rlghL Lo seek leglLlmaLe employmenL of Lhelr cholce
whlch cannoL be arblLrarlly lnfrlnged upon by regulaLlons LhaL are conLrary Lo law
1he prlmary purpose of Lhe CpLomeLry Law ls Lo ensure LhaL Lhe servlce would be rendered
by compeLenL and llcensed persons and Lhereby proLecL Lhe publlc from lnexperLness
uesplLe Lhe publlc respondenLs asserLlons LhaL Lhe condlLlons ln Lhe buslness permlL
were made for Lhe purpose of safeguardlng Lhe general publlc and especlally Lhe poor
who are easlly gulled by mlsleadlng adverLlsemenLs hence falllng wlLhln Lhe amblL of
pollce powers granLed Lo local offlclals under Lhe Local CovernmenL Code Lhls CourL
sees no cogenL reason why such purpose cannoL be aLLalned even lf Lhe persons
renderlng Lhe servlce are employed by a corporaLlon CpLomeLrlsLs llke any oLher
professlonals are noneLheless bound by Lhe same sLandards of professlonal conducL
care sklll and dlllgence wheLher Lhey pracLlce as lndependenL opLomeLrlsLs or as
employees of unllcensed persons or corporaLlons

LInton[ua Ir v L|ton[ua Sr
lacLs Aurello and Lduardo are broLhers Aurello flled a case agalnsL Lduardo and 8oberL
?ang for speclflc performance and accounLlng Aurello alleged LhaL slnce !une 1973 he
and Lduardo are lnLo a [olnL venLure/parLnershlp arrangemenL ln Lhe Cdeon 1heaLer
buslness whlch had expanded Lhru lnvesLmenL ln Clneplex lnc LCM 1heaLrlcal
LnLerprlses Cdeon 8ealLy CorporaLlon (operaLor of Cdeon l and ll LheaLres) Avenue
8ealLy lnc owner of lands and bulldlngs among oLher corporaLlons ?ang ls descrlbed
ln Lhe complalnL as peLlLloner's and Lduardo's parLner ln Lhelr Cdeon 1heaLer
lnvesLmenL
Lduardo et ol aparL from ralslng a [urlsdlcLlonal maLLer alleged LhaL Lhe complalnL
sLaLes no cause of acLlon slnce no cause of acLlon may be derlved from Lhe acLlonable
documenL le Annex ## belng vold under Lhe Lerms of ArLlcle 1767 ln relaLlon Lo
ArLlcle 1773 of Lhe Clvll Code lofto lL ls furLher alleged LhaL whaLever underLaklng
Lduardo agreed Lo do lf any under Annex ## are unenforceable under Lhe
provlslons of Lhe SLaLuLe of lrauds
lssue WCn parLnershlps exlsLs
Peld no A parLnershlp exlsLs when Lwo or more persons agree Lo place Lhelr money
effecLs labor and sklll ln lawful commerce or buslness wlLh Lhe undersLandlng LhaL
Lhere shall be a proporLlonaLe sharlng of Lhe proflLs and losses beLween Lhem
20
A
conLracL of parLnershlp ls deflned by Lhe Clvll Code as one where Lwo or more persons
bound Lhemselves Lo conLrlbuLe money properLy or lndusLry Lo a common fund wlLh
Lhe lnLenLlon of dlvldlng Lhe proflLs among Lhemselves
21
A [olnL venLure on Lhe
oLher hand ls hardly dlsLlngulshable from and may be llkened Lo a parLnershlp slnce
Lhelr elemenLs are slmllar le communlLy of lnLeresLs ln Lhe buslness and sharlng of
proflLs and losses 8elng a form of parLnershlp a [olnL venLure ls generally governed by
Lhe law on parLnershlp
loremosL of Lhese are Lhe followlng provlslons of Lhe Clvll Code
ArL 1771 A parLnershlp may be consLlLuLed ln any form excepL where lmmovable
properLy or real rlghLs are conLrlbuLed LhereLo ln whlch case a publlc lnsLrumenL shall
be necessary
ArL 1772 Lvery conLracL of parLnershlp havlng a caplLal of Lhree Lhousand pesos or
more ln money or properLy shall appear ln a publlc lnsLrumenL whlch musL be
recorded ln Lhe Cfflce of Lhe SecurlLles and Lxchange Commlsslon
lallure Lo comply wlLh Lhe requlremenL of Lhe precedlng paragraph shall noL affecL
Lhe llablllLy of Lhe parLnershlp and Lhe members Lhereof Lo Lhlrd persons
ArL 1773 A conLracL of parLnershlp ls vold whenever lmmovable properLy ls
conLrlbuLed LhereLo lf an lnvenLory of sald properLy ls noL made slgned by Lhe parLles
and aLLached Lo Lhe publlc lnsLrumenL
Annex # on lLs face conLalns LypewrlLLen enLrles personal ln Lone buL ls unslgned and
undaLed As an unslgned documenL Lhere can be no qulbbllng LhaL Annex # does
noL meeL Lhe publlc lnsLrumenLaLlon requlremenLs exacLed under ArLlcle 1771 of Lhe
Clvll Code Moreover belng unslgned and doubLless referrlng Lo a parLnershlp lnvolvlng
more Lhan 300000 ln money or properLy Annex ## cannoL be presenLed for
noLarlzaLlon leL alone reglsLered wlLh Lhe SecurlLles and Lxchange Commlsslon (SLC)
as called for under Lhe ArLlcle 1772 of Lhe Code And lnasmuch as Lhe lnvenLory
requlremenL under Lhe succeedlng ArLlcle 1773 goes lnLo Lhe maLLer of valldlLy when
lmmovable properLy ls conLrlbuLed Lo Lhe parLnershlp Lhe nexL loglcal polnL of lnqulry
Lurns on Lhe naLure of peLlLloner's conLrlbuLlon lf any Lo Lhe supposed parLnershlp
A vold Annex A1# as an acLlonable documenL of parLnershlp would sLrlp peLlLloner of
a cause of acLlon under Lhe premlses A complalnL for dellvery and accounLlng of
parLnershlp properLy based on such vold or legally nonexlsLenL acLlonable documenL ls
dlsmlsslble for fallure Lo sLaLe of acLlon
IM 1uazon v 8o|anos
lacLs1hls was an acLlon Lo recover possesslon of a parcel of land ln 8arrlo 1aLalon Cuezon
ClLy where Lhe plalnLlff was represenLed by a corporaLlon
lssue WCn Lhe case should be dlsmlssed on Lhe ground LhaL Lhe case was noL broughL by
Lhe real properLy ln lnLeresL
Peld lL ls Lrue LhaL Lhe complalnL also sLaLes LhaL Lhe plalnLlff ls represenLed hereln by lLs
Managlng arLner Cregorlo AraneLa lnc anoLher corporaLlon buL Lhere ls noLhlng
agalnsL one corporaLlon belng represenLed by anoLher person naLural or [urldlcal ln a
sulL ln courL 1he conLenLlon LhaL Cregorlo AraneLa lnc can noL acL as managlng
parLner for plalnLlff on Lhe Lheory LhaL lL ls lllegal for Lwo corporaLlons Lo enLer lnLo a
parLnershlp ls wlLhouL merlL for Lhe Lrue rule ls LhaL Lhough a corporaLlon has no
power Lo enLer lnLo a parLnershlp lL may neverLheless enLer lnLo a [olnL venLure wlLh
anoLher where Lhe naLure of LhaL venLure ls ln llne wlLh Lhe buslness auLhorlzed by lLs
charLer

Aurbach v San|wares
lacLs 1wo groups ASl and llllplno group of Sanlwares a corporaLlon engaged ln
manufacLurlng and selllng vlLreous Chlna and sanlLary producLs cannoL declde who
were Lhe duly elecLed offlcers durlng Lhe 1983 elecLlon
lssue 1he maln lssue hlnges on who were Lhe duly elecLed dlrecLors of Sanlwares for Lhe
year 1983 durlng lLs annual sLockholders meeLlng held on March 8 1983
Peld 1o answer Lhls quesLlon Lhe followlng facLors should be deLermlned (1) Lhe naLure of
Lhe buslness esLabllshed by Lhe parLles wheLher lL was a [olnL venLure or a corporaLlon
and (2) wheLher or noL Lhe ASl Croup may voLe Lhelr addlLlonal 10 equlLy durlng
elecLlons of Sanlwares board of dlrecLors
1he rule ls LhaL wheLher Lhe parLles Lo a parLlcular conLracL have Lhereby esLabllshed among
Lhemselves a [olnL venLure or some oLher relaLlon depends upon Lhelr acLual lnLenLlon
whlch ls deLermlned ln accordance wlLh Lhe rules governlng Lhe lnLerpreLaLlon and
consLrucLlon of conLracLs
ln an acLlon aL law where Lhere ls evldence Lendlng Lo prove LhaL Lhe parLles [olned Lhelr
efforLs ln furLherance of an enLerprlse for Lhelr [olnL proflL Lhe quesLlon wheLher Lhey
lnLended by Lhelr agreemenL Lo creaLe a [olnL advenLure or Lo assume some oLher
relaLlon ls a quesLlon of facL for Lhe [ury
ln Lhe lnsLanL cases our examlnaLlon of lmporLanL provlslons of Lhe AgreemenL as well as
Lhe LesLlmonlal evldence presenLed by Lhe Lagdameo and ?oung Croup shows LhaL Lhe
parLles agreed Lo esLabllsh a [olnL venLure and noL a corporaLlon 1he hlsLory of Lhe
organlzaLlon of Sanlwares and Lhe unusual arrangemenLs whlch govern lLs pollcy
maklng body are all conslsLenL wlLh a [olnL venLure and noL wlLh an ordlnary
corporaLlon
lL ls perLlnenL Lo noLe LhaL Lhe provlslons of Lhe AgreemenL requlrlng a 7 ouL of 9 voLes of
Lhe board of dlrecLors for cerLaln acLlons ln effecL gave ASl (whlch deslgnaLes 3
dlrecLors under Lhe AgreemenL) an effecLlve veLo power lurLhermore Lhe granL Lo ASl
of Lhe rlghL Lo deslgnaLe cerLaln offlcers of Lhe corporaLlon Lhe superma[orlLy voLlng
requlremenLs for amendmenLs of Lhe arLlcles and bylaws and mosL slgnlflcanLly Lo Lhe
lssues of Lms case Lhe provlslon LhaL ASl shall deslgnaLe 3 ouL of Lhe 9 dlrecLors and Lhe
oLher sLockholders shall deslgnaLe Lhe oLher 6 clearly lndlcaLe LhaL Lhere are Lwo
dlsLlncL groups ln Sanlwares namely ASl whlch owns 40 of Lhe caplLal sLock and Lhe
hlllpplne naLlonal sLockholders who own Lhe balance of 60 and LhaL 2) ASl ls glven
cerLaln proLecLlons as Lhe mlnorlLy sLockholder

Gatcha||an v CIk
lacLs lalnLlff eL Al boughL sweepsLakes LlckeLs for Lhe sole purpose of dlvldlng equally Lhe
prlze whlch Lhey may as Lhey dld ln facL ln Lhe amounL of 30000 lf a parLnershlp had
been formed lL was llable for lncome Lax pursuanL Lo law Lhen ln force lf merely a
communlLy of properLy Lhen such coownershlp ls noL llable noL havlng a legal
personallLy of lLs own
lssue ls Lhere parLnershlp?
Peld ?es 1he parLnershlp was noL only formed buL upon Lhe organlzaLlon Lhereof and Lhe
wlnnlng of Lhe prlze !ose CaLchallan personally appeared ln Lhe offlce of Lhe
hlllpplnes CharlLy SweepsLakes ln hls capaclLy as coparLner as such collecLlon Lhe
prlze Lhe offlce lssued Lhe check for 30000 ln favor of !ose CaLchallan and company
and Lhe sald parLner ln Lhe same capaclLy collecLed Lhe sald check All Lhese
clrcumsLances repel Lhe ldea LhaL Lhe plalnLlffs organlzed and formed a communlLy of
properLy only
Cna v CIk
lacLs Lorenzo Cna and helrs of !ulla 8unales are coowners of lnherlLed properLles 1hey
agreed Lo use Lhe sald common properLles and Lhe lncome derlved Lherefrom as a
common fund wlLh Lhe lnLenLlon Lo produce proflLs for Lhem ln proporLlon Lo Lhelr
respecLlve shares ln Lhe lnherlLance as deLermlned by Lhe parLlLlon
lssue WCn Lhere ls parLnershlp
Peld ?es Lhere ls unreglsLered parLnershlp lL ls Lhus lnconLroverLlble LhaL peLlLloners dld
noL conLrary Lo Lhelr conLenLlon merely llmlL Lhemselves Lo holdlng Lhe properLles
lnherlLed by Lhem lndeed lL ls admlLLed LhaL durlng Lhe maLerlal years hereln lnvolved
some of Lhe sald properLles were sold aL conslderable proflL and LhaL wlLh sald proflL
peLlLloners engaged Lhru Lorenzo 1 Cna ln Lhe purchase and sale of corporaLe
securlLles lL ls llkewlse admlLLed LhaL all Lhe proflLs from Lhese venLures were dlvlded
among peLlLloners proporLlonaLely ln accordance wlLh Lhelr respecLlve shares ln Lhe
lnherlLance ln Lhese clrcumsLances lL ls Cur consldered vlew LhaL from Lhe momenL
peLlLloners allowed noL only Lhe lncomes from Lhelr respecLlve shares of Lhe
lnherlLance buL even Lhe lnherlLed properLles Lhemselves Lo be used by Lorenzo 1 Cna
as a common fund ln underLaklng several LransacLlons or ln buslness wlLh Lhe lnLenLlon
of derlvlng proflL Lo be shared by Lhem proporLlonally such acL was LanLamonuL Lo
acLually conLrlbuLlng such lncomes Lo a common fund and ln effecL Lhey Lhereby
formed an unreglsLered parLnershlp wlLhln Lhe purvlew of Lhe abovemenLloned
provlslons of Lhe 1ax Code


Cb|||os v CIk
lacLs !ose Cblllos afLer compleLlng paymenLs Lo CrLlgas and Co on Lwo loLs Lransferred hls
rlghLs Lo four chlldren Lo enable Lhem Lo bulld Lhelr resldences Cblllos boughL Lhe loL
for 17870812 and Lhe chlldren resold lL for 31334188 wlLh 13434188 as caplLal
galns and paylng an lncome Lax of one half of Lhelr respecLlve shares of Lhe proflL
lssue ls Lhere parLnershlp?
Peld no dlvlslonof proflLs was merely lncldenLal 1hey were noL engaged ln any [olnL
venLure by reason of LhaL lsolaLed LransacLlon
1helr orlglnal purpose was Lo dlvlde Lhe loLs for resldenLlal purposes lf laLer on Lhey found lL
noL feaslble Lo bulld Lhelr resldences on Lhe loLs because of Lhe hlgh cosL of
consLrucLlon Lhen Lhey had no cholce buL Lo resell Lhe same Lo dlssolve Lhe co
ownershlp 1he dlvlslon of Lhe proflL was merely lncldenLal Lo Lhe dlssoluLlon of Lhe co
ownershlp whlch was ln Lhe naLure of Lhlngs a Lemporary sLaLe lL had Lo be LermlnaLed
sooner or laLer
ArLlcle 1769(3) of Lhe Clvll Code provldes LhaL Lhe sharlng of gross reLurns does noL of lLself
esLabllsh a parLnershlp wheLher or noL Lhe persons sharlng Lhem have a [olnL or
common rlghL or lnLeresL ln any properLy from whlch Lhe reLurns are derlved 1here
musL be an unmlsLakable lnLenLlon Lo form a parLnershlp or [olnL venLure

L|m 1ong L|m v h|| I|sh|ng Gear
lacLs Cn behalf of Ccean CuesL llshlng CorporaLlon AnLonlo Chua and eLer ?ao enLered
lnLo a ConLracL for Lhe purchase of flshlng neLs and floaLs from respondenL hlllpplne
llshlng Cear lndusLrles lnc 1hey clalmed LhaL Lhey were engaged ln a buslness venLure
wlLh eLlLloner Llm 1ong Llm who however was noL a slgnaLory Lo Lhe agreemenL 1he
buyers however falled Lo pay for Lhe flshlng neLs and Lhe floaLs hence prlvaLe
respondenLs flled a collecLlon sulL agalnsL Chua ?ao and eLlLloner Llm 1ong Llm wlLh a
prayer for a wrlL of prellmlnary aLLachmenL 1he sulL was broughL agalnsL Lhe Lhree ln
Lhelr capaclLles as general parLners on Lhe allegaLlon LhaL Ccean CuesL llshlng
CorporaLlon was a nonexlsLenL corporaLlon as shown by a CerLlflcaLlon from Lhe
SecurlLles and Lxchange Commlsslon 1he Lrlal courL malnLalned Lhe WrlL and upon
moLlon of prlvaLe respondenL ordered Lhe sale of Lhe flshlng neLs aL a publlc aucLlon
hlllpplne llshlng Cear lndusLrles won Lhe blddlng and deposlLed wlLh Lhe sald courL
Lhe sales proceeds of 900000
1hereafLer Lhe Lrlal courL ruled LhaL hlllpplne llshlng Cear lndusLrles was enLlLled Lo Lhe
WrlL of ALLachmenL and LhaL Chua ?ao and Llm as general parLners were [olnLly llable
Lo pay respondenL lL also ruled LhaL a parLnershlp among Llm Chua and ?ao exlsLed
based (1) on Lhe LesLlmonles of Lhe wlLnesses presenLed and (2) on a Compromlse
AgreemenL execuLed by Lhe Lhree ln a clvll case whlch provldes LhaL Lhe proceeds of Lhe
sale of four (4) vessels lncludlng Lhe flshlng neL shall be applled as full paymenL ln favor
of !L Poldlngs CorporaLlon and/or Llm 1ong Llm and Lo dlvlde equally among Lhem Lhe
excess or loss 1he CA afflrmed Lhe declslon of Lhe 81C rullng LhaL peLlLloner was a
parLner of Chua and ?ao ln a flshlng buslness and may Lhus be held llable as a such for
Lhe flshlng neLs and floaLs purchased by and for Lhe use of Lhe parLnershlp Pence
peLlLloner broughL Lhls recourse before Lhls CourL lssueWheLher by Lhelr acLs Llm
Chua and ?ao could be deemed Lo have enLered lnLo a parLnershlp Peld ?LS lrom Lhe
facLual flndlngs of boLh lower courLs lL ls clear LhaL Chua ?ao and Llm had declded Lo
engage ln a flshlng buslness whlch Lhey sLarLed by buylng boaLs worLh 333 mllllon
flnanced by a loan secured from !esus Llm who was peLlLloners broLher ln Lhelr
Compromlse AgreemenL Lhey subsequenLly revealed Lhelr lnLenLlon Lo pay Lhe loan
wlLh Lhe proceeds of Lhe sale of Lhe boaLs and Lo dlvlde equally among Lhem Lhe excess
or loss 1hese boaLs Lhe purchase and Lhe repalr of whlch were flnanced wlLh
borrowed money fell under Lhe Lerm common fund under ArLlcle 1767 1he
conLrlbuLlon Lo such fund need noL be cash or flxed asseLs lL could be an lnLanglble llke
credlL or lndusLry 1haL Lhe parLles agreed LhaL any loss or proflL from Lhe sale and
operaLlon of Lhe boaLs would be dlvlded equally among Lhem also shows LhaL Lhey had
lndeed formed a parLnershlp Moreover lL ls clear LhaL Lhe parLnershlp exLended noL
only Lo Lhe purchase of Lhe boaL buL also Lo LhaL of Lhe neLs and Lhe floaLs 1he flshlng
neLs and Lhe floaLs boLh essenLlal Lo flshlng were obvlously acqulred ln furLherance of
Lhelr buslness lL would have been lnconcelvable for Llm Lo lnvolve hlmself so much ln
buylng Lhe boaL buL noL ln Lhe acqulslLlon of Lhe aforesald equlpmenL wlLhouL whlch
Lhe buslness could noL have proceeded
Clven Lhe precedlng facLs lL ls clear LhaL Lhere was among peLlLloner Chua and ?ao a
parLnershlp engaged ln Lhe flshlng buslness 1hey purchased Lhe boaLs whlch
consLlLuLed Lhe maln asseLs of Lhe parLnershlp and Lhey agreed LhaL Lhe proceeds from
Lhe sales and operaLlons Lhereof would be dlvlded among Lhem
Crtega v CA
Iacts Law flrm 8lLo Mlza and Lozada !oaquln Mlza dlssolved Lhe parLnershlp because of
nonlncrease ln Lhe salary pay of employees lncludlng asslsLanL aLLorneys ALLy 8lLo and
Lozada boLh dled durlng Lhe pendency of Lhe case
Issue 1 WheLher or noL Lhe CourL of Appeals has erred ln holdlng LhaL Lhe parLnershlp of
8lLo Mlsa Lozada (now 8lLo Lozada CrLega CasLlllo) ls a parLnershlp aL wlll
2 WheLher or noL Lhe CourL of Appeals has erred ln holdlng LhaL Lhe wlLhdrawal of prlvaLe
respondenL dlssolved Lhe parLnershlp regardless of hls good or bad falLh and
3 WheLher or noL Lhe CourL of Appeals has erred ln holdlng LhaL prlvaLe respondenLs
demand for Lhe dlssoluLlon of Lhe parLnershlp so LhaL he can geL a physlcal parLlLlon of
parLnershlp was noL made ln bad falLh
Peld 1he blrLh and llfe of a parLnershlp aL wlll ls predlcaLed on Lhe muLual deslre and
consenL of Lhe parLners 1he rlghL Lo choose wlLh whom a person wlshes Lo assoclaLe
hlmself ls Lhe very foundaLlon and essence of LhaL parLnershlp lLs conLlnued exlsLence
ls ln Lurn dependenL on Lhe consLancy of LhaL muLual resolve along wlLh each
parLners capablllLy Lo glve lL and Lhe absence of a cause for dlssoluLlon provlded by Lhe
law lLself verlly any one of Lhe parLners may aL hls sole pleasure dlcLaLe a dlssoluLlon
of Lhe parLnershlp aL wlll Pe musL however acL ln good falLh noL LhaL Lhe aLLendance
of bad falLh can prevenL Lhe dlssoluLlon of Lhe parLnershlp
4
buL LhaL lL can resulL ln a
llablllLy for damages
S

ln passlng nelLher would Lhe presence of a perlod for lLs speclflc duraLlon or Lhe sLaLemenL
of a parLlcular purpose for lLs creaLlon prevenL Lhe dlssoluLlon of any parLnershlp by an
acL or wlll of a parLner
6
Among parLners
7
muLual agency arlses and Lhe docLrlne
of electos petsoooe allows Lhem Lo have Lhe powet alLhough noL necessarlly Lhetlqbt
Lo dlssolve Lhe parLnershlp An un[usLlfled dlssoluLlon by Lhe parLner can sub[ecL hlm Lo
a posslble acLlon for damages
1he dlssoluLlon of a parLnershlp ls Lhe change ln Lhe relaLlon of Lhe parLles caused by any
parLner ceaslng Lo be assoclaLed ln Lhe carrylng on as mlghL be dlsLlngulshed from Lhe
wlndlng up of Lhe buslness
8
upon lLs dlssoluLlon Lhe parLnershlp conLlnues and lLs
legal personallLy ls reLalned unLll Lhe compleLe wlndlng up of lLs buslness culmlnaLlng ln
lLs LermlnaLlon
9

1he llquldaLlon of Lhe asseLs of Lhe parLnershlp followlng lLs dlssoluLlon ls governed by
varlous provlslons of Lhe Clvll Code
10
however an agreemenL of Lhe parLners llke any
oLher conLracL ls blndlng among Lhem and normally Lakes precedence Lo Lhe exLenL
appllcable over Lhe Codes general provlslons
ALLorney Mlsa dld noL acL ln bad falLh ubllc respondenLs vlewed hls wlLhdrawal Lo have
been spurred by lnLerpersonal confllcL among Lhe parLners lL would noL be rlghL we
agree Lo leL any of Lhe parLners remaln ln Lhe parLnershlp under such an aLmosphere of
anlmoslLy cerLalnly noL agalnsL Lhelr wlll
12
lndeed for as long as Lhe reason for
wlLhdrawal of a parLner ls noL conLrary Lo Lhe dlcLaLes of [usLlce and falrness nor for
Lhe purpose of unduly vlslLlng harm and damage upon Lhe parLnershlp o foltb cannoL
be sald Lo characLerlze Lhe acL