Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-12541 March 30, 1960 ROSARIO U.

ULO, a!!"!#$% &' h$r h(!&a)% *o!$ C. (+o, plaintiffs-appellants, vs. ANG C,IAO SENG, defendant-appellee. Punzalan, Yabut and Eusebio for appellants. A. Francisco and J. T. Ocampo for appellee. LA-RA.OR, J./ This concerns a "Petition to Reopen Case," dated ece!ber "#, "$%$, presented b& attorne&s for plaintiffs-appellants, alle'in' that the relationship bet(een Rosario ). *ulo, plaintiff-appellant and *an' Chiao +en', defendant-appellee, as lessor and lessee, has alread& been definitel& decided b& the Court of Appeals in the case of +ta. Marina, et al., and Rosario ). *ulo and *an' Chiao +en', C. A. ,. R. No. -"#.-R. /e have 'one out of our (a& to revie( our conclusion that no relation of partnership e0isted bet(een said parties because (e had denied the !otion for reconsideration of plaintiff-appellant 1uestionin' the conclusion of this Court (ithout e0planation. The clai! of plaintiff-appellant Rosario ). *ulo is that the relationship bet(een her and defendantappellee *an' Chiao +en' as partners had alread& been passed upon b& the Court of Appeals in the above-indicated decision. The portion of the decision of the Court of Appeals is contained on pa'e - of the !otion for reconsideration in (hich it held that articles of partnership of *oun' 2 Co., 3td. sho( that the parties to this case are partners in the construction of the Astor Theatre. 4t is to be noted, ho(ever, that the decision of the Court of Appeals (as one in (hich E!ilia and Maria Carrion +ta. Marina are plaintiffs and the defendants are Rosario *ulo and *an' Chiao +en'5 the action (as one to e6ect the defendants fro! the land occupied b& the!5 the issue (as the reasonable value for the use and occupation of the land. The Court of Appeals said that the plaintiffs in that case had clai!ed that the reasonable value (as P.,777, (hile the defendants clai!ed that it (as onl& P",777, and the Court of Appeals held that in vie( of the partnership papers P.,777 represent the share of Rosario ). *ulo in the profits of the partnership and not the reasonable rent of the propert&. 4t is evident that no res 6udicata can be clai!ed for the previous 6ud'!ent of the Court of Appeals. 4n the first place, the parties in that case (ere E!ilia and Maria Carrion +ta. Marina and the defendants, Rosaria ). *ulo and *an' Chiao +en'5 in the second place, the issue decided b& the Court of Appeals (as the rental value of the propert& in 1uestion5 that the cause of action (as for e6ect!ent of Rosario ). *ulo and *an' Chiao +en'. 4n the case at bar, the action is bet(een Rosario ). *ulo as plaintiff and *an' Chiao +en' as defendant5 the issue is (hether or not the plaintiff is partner in the cine!ato'raph business, as clai!ed b& plaintiff, or said plaintiff is !erel& a sublessee, as clai!ed b& the defendant. There is, therefore, no identit& of parties nor identit& of issue, nor identit& of cause of action. /e call attention to the ver& citation contained in appellant8s !otion for reconsideration, (hich reads as follo(s9 Parties to a 6ud'!ent are not bound b& it, in a subse1uent controvers& bet(een each other unless the& (ere adversar& parties in the ori'inal action. There !ust have been an issue or controvers& bet(een the!. The reason for this rule obviousl& is the sa!e as that (hich

underlies the (hole doctrine of res 6udicata, na!el&, that a person should not be bound b& a 6ud'!ent e0cept to the e0tent that he, or so!eone representin' hi!, had an ade1uate opportunit& not onl& to liti'ate the !atters ad6udicated, but to liti'ate the! a'ainst the part& :or his prodecessor in interest; (ho see<s to use the 6ud'!ent a'ainst hi!. :+ec. #==, " >ree!an on ?ud'!ents, %th ed., p. $"-;. /ithout 'oin' further, (e are full& satisfied of the correctness of our conclusion that the relationship bet(een plaintiff-appellant Rosario ). *ulo and *an' Chiao +en' is !erel& that of sublessor and sublessee, and not that of partners. The !otion to reopen the case is hereb& denied and considerin' that 6ud'!ent had beco!e final since @ctober =$, "$%$, order is hereb& 'iven to re!and the record to the court belo(. Paras, C. J., Bautista Angelo, e!es, J. B. "., Barrera and #utierrez $a%id, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-4935 Ma' 20, 1954 *. M. TUASON 1 CO., INC., r$2r$!$)#$% &' "# Ma)a3")3 PARTNER, GREGORIA ARANETA, INC., plaintiff-appellee, vs. 4UIRINO -OLA5OS, defendant-appellant. Araneta and Araneta for appellee. Jose A. Buendia for appellant. RE ES, J./ This is an action ori'inall& brou'ht in the Court of >irst 4nstance of RiAal, BueAon Cit& Branch, to recover possesion of re'istered land situated in barrio Tatalon, BueAon Cit&. Plaintiff8s co!plaint (as a!ended three ti!es (ith respect to the e0tent and description of the land sou'ht to be recovered. The ori'inal co!plaint described the land as a portion of a lot re'istered in plaintiff8s na!e under Transfer Certificate of Title No. .CD-D of the land record of RiAal Province and as containin' an area of ". hectares !ore or less. But the co!plaint (as a!ended b& reducin' the area of D hectares, !ore or less, after the defendant had indicated the plaintiff8s surve&ors the portion of land clai!ed and occupied b& hi!. The second a!end!ent beca!e necessar& and (as allo(ed follo(in' the testi!on& of plaintiff8s surve&ors that a portion of the area (as e!braced in another certificate of title, (hich (as plaintiff8s Transfer Certificate of Title No. .CDCC. And still later, in the course of trial, after defendant8s surve&or and (itness, Buirino >eria, had testified that the area occupied and clai!ed b& defendant (as about ". hectares, as sho(n in his E0hibit ", plaintiff a'ain, (ith the leave of court, a!ended its co!plaint to !a<e its alle'ations confor! to the evidence. efendant, in his ans(er, sets up prescription and title in hi!self thru "open, continuous, e0clusive and public and notorious possession :of land in dispute; under clai! of o(nership, adverse to the entire (orld b& defendant and his predecessor in interest" fro! "ti!e in-!e!orial". The ans(er further alle'es that re'istration of the land in dispute (as obtained b& plaintiff or its predecessors in interest thru "fraud or error and (ithout <no(led'e :of; or interest either personal or thru publication to defendant andEor predecessors in interest." The ans(er therefore pra&s that the co!plaint be dis!issed (ith costs and plaintiff re1uired to reconve& the land to defendant or pa& its value. After trial, the lo(er court rendered 6ud'!ent for plaintiff, declarin' defendant to be (ithout an& ri'ht to the land in 1uestion and orderin' hi! to restore possession thereof to plaintiff and to pa& the latter a !onthl& rent of P".=.D= fro! ?anuar&, "$#7, until he vacates the land, and also to pa& the costs. Appealin' directl& to this court because of the value of the propert& involved, defendant !a<es the follo(in' assi'n!ent or errors9 4. The trial court erred in not dis!issin' the case on the 'round that the case (as not brou'ht b& the real propert& in interest.

44. The trial court erred in ad!ittin' the third a!ended co!plaint. 444. The trial court erred in den&in' defendant8s !otion to stri<e. 4F. The trial court erred in includin' in its decision land not involved in the liti'ation. F. The trial court erred in holdin' that the land in dispute is covered b& transfer certificates of Title Nos. .CD-D and .CDCC. Fl. The trial court erred in not findin' that the defendant is the true and la(ful o(ner of the land. F44. The trial court erred in findin' that the defendant is liable to pa& the plaintiff the a!ount of P".=.D= !onthl& fro! ?anuar&, "$#7, until he vacates the pre!ises. F444. The trial court erred in not orderin' the plaintiff to reconve& the land in liti'ation to the defendant. As to the first assi'ned error, there is nothin' to the contention that the present action is not brou'ht b& the real part& in interest, that is, b& ?. M. Tuason and Co., 4nc. /hat the Rules of Court re1uire is that an action be brou'ht in t&e name of, but not necessaril& b!, the real part& in interest. :+ection =, Rule =.; 4n fact the practice is for an attorne&-at-la( to brin' the action, that is to file the co!plaint, in the na!e of the plaintiff. That practice appears to have been follo(ed in this case, since the co!plaint is si'ned b& the la( fir! of Araneta and Araneta, "counsel for plaintiff" and co!!ences (ith the state!ent "co!es no( plaintiff, throu'h its undersi'ned counsel." 4t is true that the co!plaint also states that the plaintiff is "represented herein b& its Mana'in' Partner ,re'orio Araneta, 4nc.", another corporation, but there is nothin' a'ainst one corporation bein' represented b& another person, natural or 6uridical, in a suit in court. The contention that ,re'orio Araneta, 4nc. can not act as !ana'in' partner for plaintiff on the theor& that it is ille'al for t(o corporations to enter into a partnership is (ithout !erit, for the true rule is that "thou'h a corporation has no po(er to enter into a partnership, it !a& nevertheless enter into a 6oint venture (ith another (here the nature of that venture is in line (ith the business authoriAed b& its charter." :/&o!in'-4ndiana @il ,as Co. %s. /eston, -7 A. 3. R., "7#., citin' = >letcher C&c. of Corp., "7-=.; There is nothin' in the record to indicate that the venture in (hich plaintiff is represented b& ,re'orio Araneta, 4nc. as "its !ana'in' partner" is not in line (ith the corporate business of either of the!. Errors 44, 444, and 4F, referrin' to the ad!ission of the third a!ended co!plaint, !a& be ans(ered b& !ere reference to section # of Rule "C, Rules of Court, (hich sanctions such a!end!ent. 4t reads9 +ec. #. Amendment to conform to e%idence. G /hen issues not raised b& the pleadin's are tried b& e0press or i!plied consent of the parties, the& shall be treated in all respects, as if the& had been raised in the pleadin's. +uch a!end!ent of the pleadin's as !a& be necessar& to cause the! to confor! to the evidence and to raise these issues !a& be !ade upon !otion of an& part& at !& ti!e, even of the trial of these issues. 4f evidence is ob6ected to at the trial on the 'round that it is not (ithin the issues !ade b& the pleadin's, the court !a& allo( the pleadin's to be a!ended and shall be so freel& (hen the presentation of the !erits of the action (ill be subserved thereb& and the ob6ectin' part& fails to satisf& the court that the ad!ission of such evidence (ould pre6udice hi! in !aintainin' his action or defense upon the !erits. The court !a& 'rant a continuance to enable the ob6ectin' part& to !eet such evidence.

)nder this provision a!end!ent is not even necessar& for the purpose of renderin' 6ud'!ent on issues proved thou'h not alle'ed. Thus, co!!entin' on the provision, Chief ?ustice Moran sa&s in this Rules of Court9 )nder this section, A!erican courts have, under the Ne( >ederal Rules of Civil Procedure, ruled that (here the facts sho(n entitled plaintiff to relief other than that as<ed for, no a!end!ent to the co!plaint is necessar&, especiall& (here defendant has hi!self raised the point on (hich recover& is based, and that the appellate court treat the pleadin's as a!ended to confor! to the evidence, althou'h the pleadin's (ere not actuall& a!ended. :4 Moran, Rules of Court, "$%= ed., .-$-.$7.; @ur conclusion therefore is that specification of error 44, 444, and 4F are (ithout !erit.. 3et us no( pass on the errors F and F4. Ad!ittin', thou'h his attorne&, at the earl& sta'e of the trial, that the land in dispute "is that described or represented in E0hibit A and in E0hibit B enclosed in red pencil (ith the na!e Buirino BolaHos," defendant later chan'ed his la(&er and also his theor& and tried to prove that the land in dispute (as not covered b& plaintiff8s certificate of title. The evidence, ho(ever, is a'ainst defendant, for it clearl& establishes that plaintiff is the re'istered o(ner of lot No. #-B-.-C, situate in barrio Tatalon, BueAon Cit&, (ith an area of %,=$C,#=$.. s1uare !eters, !ore or less, covered b& transfer certificate of title No. .CD-D of the land records of RiAal province, and of lot No. #-B-#, situated in the sa!e barrio, havin' an area of C#,C-$ s1uare !eters, !ore or less, covered b& transfer certificate of title No. .CDCC of the land records of the sa!e province, both lots havin' been ori'inall& re'istered on ?ul& -, "$"# under ori'inal certificate of title No. C.%. The identit& of the lots (as established b& the testi!on& of Antonio Manahan and Ma'no >austino, (itnesses for plaintiff, and the identit& of the portion thereof clai!ed b& defendant (as established b& the testi!on& of his o(n (itness, Buirico >eria. The co!bined testi!on& of these three (itnesses clearl& sho(s that the portion clai!ed b& defendant is !ade up of a part of lot #-B-.-C and !a6or on portion of lot #-B-#, and is (ell (ithin the area covered b& the t(o transfer certificates of title alread& !entioned. This fact also appears ad!itted in defendant8s ans(er to the third a!ended co!plaint. As the land in dispute is covered b& plaintiff8s Torrens certificate of title and (as re'istered in "$"#, the decree of re'istration can no lon'er be i!pu'ned on the 'round of fraud, error or lac< of notice to defendant, as !ore than one &ear has alread& elapsed fro! the issuance and entr& of the decree. Neither court the decree be collaterall& attac<ed b& an& person clai!in' title to, or interest in, the land prior to the re'istration proceedin's. :+oroH'on %s. Ma<alintal," #% @ff. ,aA., .-"$.; Nor could title to that land in dero'ation of that of plaintiff, the re'istered o(ner, be ac1uired b& prescription or adverse possession. :+ection #D, Act No. #$D.; Adverse, notorious and continuous possession under clai! of o(nership for the period fi0ed b& la( is ineffective a'ainst a Torrens title. :Faliente %s. ?ud'e of C>4 of Tarlac,= etc., #% @ff. ,aA., +upp. $, p. #..; And it is li<e(ise settled that the ri'ht to secure possession under a decree of re'istration does not prescribed. :>rancisco vs. CruA, #. @ff. ,aA., %"7%, %"7$-%""7.; A recent decision of this Court on this point is that rendered in the case of Jose Alcantara et al., %s. 'ariano et al., $= Phil., C$D. This disposes of the alle'ed errors F and F4. As to error F44, it is clai!ed that Ithere (as no evidence to sustain the findin' that defendant should be sentenced to pa& plaintiff P".=.D= !onthl& fro! ?anuar&, "$#7, until he vacates the pre!ises.8 But it appears fro! the record that that reasonable co!pensation for the use and occupation of the pre!ises, as stipulated at the hearin' (as P"7 a !onth for each hectare and that the area occupied b& defendant (as "..=D"$ hectares. The total rent to be paid for the area occupied should therefore be P".=.D= a !onth. 4t is appears fro! the testi!on& of ?. A. Araneta and (itness E!i'dio Tan6uatco that as earl& as "$.$ an action of e6ect!ent had alread& been filed a'ainst defendant. And it cannot be supposed that defendant has been pa&in' rents, for he has been assertin' all alon' that the pre!ises in 1uestion 8have al(a&s been since ti!e i!!e!orial in open, continuous,

e0clusive and public and notorious possession and under clai! of o(nership adverse to the entire (orld b& defendant and his predecessors in interest.8 This assi'n!ent of error is thus clearl& (ithout !erit. Error No. F444 is but a conse1uence of the other errors alle'ed and needs for further consideration. urin' the pendenc& of this case in this Court appellant, thru other counsel, has filed a !otion to dis!iss alle'in' that there is pendin' before the Court of >irst 4nstance of RiAal another action bet(een the sa!e parties and for the sa!e cause and see<in' to sustain that alle'ation (ith a cop& of the co!plaint filed in said action. But an e0a!ination of that co!plaint reveals that appellant8s alle'ation is not correct, for the pretended identit& of parties and cause of action in the t(o suits does not appear. That other case is one for recover& of o(nership, (hile the present one is for recover& of possession. And (hile appellant clai!s that he is also involved in that order action because it is a class suit, the co!plaint does not sho( that such is reall& the case. @n the contrar&, it appears that the action see<s relief for each individual plaintiff and not relief for and on behalf of others. The !otion for dis!issal is clearl& (ithout !erit. /herefore, the 6ud'!ent appealed fro! is affir!ed, (ith costs a'ainst the plaintiff. Paras, C.J., Pablo, Bengzon, 'ontema!or, Jugo, Bautista Angelo, "abrador, and Concepcion, JJ., concur.

6oo#)o#$!
"

-7 Phil., =%$.

= -7 Phil., #"%.

Republic of the Philippines SUPREME COURT Manila >4R+T 4F4+4@N G.R. No!. L-32347-53 .$c$8&$r 26, 1973 AGUSTIN A-ONG, petitioner, vs. T,E 9OR:MEN;S COMPENSATION COMMISSION, NELL -ALLARES, ANACORITA .A,IL.A,IL, MANUEL LA,AO-LA,AO, CONC,ITA MONTERO O, S,IRLE LO<A.A a)% ROSARIO ALO=A, respondents. Pelaez, Jalandoni and Jamir for petitioner. Pagano C. (illa%ie)a for respondent *or+men Compensation Commission. "abaton and "abaton for pri%ate respondents. ESGUERRA, J.: 4. ,TATE'E-T OF T.E CA,E Appeal b& certiorari fro! the decision of the /or<!en8s Co!pensation Co!!ission, a(ardin' co!pensation to private respondents. 44. FACT, OF T.E CA,E The undisputed facts as borne out b& the record are follo(s9 Aladino ionson, >ilo!eno )!bria, Noel 3ahao-lahao, ?uanita Montero&o and /ilfredo Montero&o and e!etrio Escoreal, all decent (ere !e!bers of a fishin' outfit, the "4/A," or !ore popularl& called the "A3EJ", o(ned b& petitioner herein, r. A'ustino R. Abon'. @n Ma& "%, "$DD, this fishin' outfit set out to sea so!e(hat off the coast of Northern Ne'ros. The decedents (ere a!on' the C7 cre( !e!bers (ho (ere loaded on t(o bi' bancas, - s!all fishin' boats locall& <no(n as "la(a'an" and one to(in' !otorboat. /hile the& (ere, thus, fishin', t&phoon "4RMA" passed alon' their (a&, scatterin' the boats and blo(in' the! far out into the open sea. The tra'ed& netted ei'ht :-; dead (hile so!e si0t& :D7; !en survived the disaster. 1 As a conse1uence of the incident seven :C; notices and clai!s for death co!pensation (ere filed (ith the Bacolod +ub-Re'ional @ffice :or Re'ional @ffice No. F44; of the epart!ent of 3abor b& herein private respondents on ?une ", "$DD. A cop& of the notices and clai!s (ere sent to petitioner r. A'ustino R. Abon' b& re'istered !ail at his place of business, but the envelopes containin' said notices and clai!s (ere returned unclai!ed, althou'h petitioner (as personall& notified thrice. Thereafter, counsel for private respondents on ?ul& D, "$DD, and ?ul& "#, "$DD, respectivel&, filed an e/0parte !otion (ith the Bacolod +ub-Re'ional @ffice of the /or<!en8s Co!pensation Co!!ission to declare petitioner in default, (hich !otion (as 'ranted. Thereupon, clai!ants (ere allo(ed to present their evidence. >indin' the clai!s of the private respondents to be allied in nature, the cases (ere consolidated. 2

After due hearin' before Actin' Referee, Bertito . adivas, he rendered on Au'ust ", "$DD, a decision 'rantin' the clai!s, the pertinent portions of (hich are 1uoted as follo(s9 4n the li'ht of the testi!onies of herein clai!ants and their principal (itness, >ilo!eno Pason, (ho is a survivor of that unfortunate tra'ed& and (ho personall& (itnessed the deaths of all ei'ht :-; deceased (or<ers of respondent, there is no doubt at all that their deaths arose out of and in the course of their e!plo&!ent as "(ashin'" or helpers and li'ht tenders of respondent r. A'ustino R. Abon'. )nder +ections = and - of the /or<!en8s Co!pensation Act, as a!ended, the deaths of above deceased persons are, therefore, co!pensable. 4n 'rantin' this a(ard G it should be considered that t(o of the ei'ht deceased (or<ers G Noel 3ahao-lahao and /ilfredo Montero&o G (ere !inors at the ti!e of e!plo&!ent. Respondent herein has also failed to sub!it a report of this accident "as soon as possible after the occurence of an in6ur& resultin' in absence fro! (or< for a da& or !ore"5 nor re'istered hi!self or his business enterprise in accordance (ith +ections .C and %D of the /or<!en8s Co!pensation Act, other(ise <no(n as Republic Act No. .#=-. +ection #-A of the /or<!en8s Co!pensation Act provides for pa&!ent of an additional co!pensation e1ual to fift& per centu! of the co!pensation to be a(arded, in case of failure of the e!plo&er to co!pl& (ith an& order, rule or re'ulation of the /or<!en8s Co!pensation Act in the event of the death of the e!plo&ee or e!plo&ees concerned. /herefore, under the la(, the clai!ants are entitled to co!pensation and respondent is hereb& ordered9 ". To pa& to clai!ant, ANAC@R4TA AK43- AK43 the su! of +4J TK@)+AN PE+@+ :PD,777.77;, plus %7L penalt& in the su! of TKREE TK@)+AN PE+@+ :P.,777.77;, plus the further su! of T/@ K)N RE PE+@+ as burial e0penses, throu'h this @ffice5 =. To pa& to clai!ant, NE33* BA33ARE+, the su! of +4J TK@)+AN PE+@+ :PD,777.77; plus %7L penalt& in the su! of TKREE TK@)+AN PE+@+ :P.,777.77; or the total su! of N4NE TK@)+AN PE+@+ :P$,777.77; plus the further su! of T/@ K)N RE PE+@+ :P=77.77;, as burial e0penses throu'h this @ffice5 .. To pa& to clai!ant, MAN)E3 3AKA@-3AKA@, the su! of T/@ TK@)+AN +4J K)N RE PE+@+ :P=,D77.77; plus %7L penalt& in the su! of @NE TK@)+AN TKREE K)N RE PE+@+ :P",.77.77;, or the total su! of TKREE TK@)+AN N4NE K)N RE PE+@+ :P.,$77.77;, plus burial e0penses in the su! of T/@ K)N RE PE+@+ :P=77.77;, throu'h this @ffice5 #. To pa& to clai!ant, +K4R3E* 3@MA A, the su! of >4FE TK@)+AN @NE K)N RE T/ENT* PE+@+ :P%,"=7.77; plus %7L penalt& in the su! of T/@ TK@)+AN >4FE K)N RE +4JT* PE+@+ :P=,%D7.77; or the total su! of +EFEN TK@)+AN +4J K)N RE E4,KT* PE+@+ :PC,D-7.77;, plus burial e0penses of T/@ K)N RE PE+@+ :P=77.77; throu'h this @ffice5

%. To pa& to clai!ant, R@+AR4@ A3@FA, the su! of +4J TK@)+AN PE+@+ :PD,777.77; plus %7L penalt& in the su! of TKREE TK@)+AN PE+@+ :P.,777.77; or the total su! of N4NE TK@)+AN PE+@+ :P$,777.77;, plus the further su! of T/@ K)N RE PE+@+ :P=77.77; for burial e0penses, throu'h this @ffice5 D. To pa& to clai!ant, C@NCK4TA M@NTER@*@, the su! of +4J TK@)+AN PE+@+ :PD,777.77; plus %7L penalt& in the su! of TKREE TK@)+AN PE+@+ :P.,777.77; representin' co!pensation for the death of her husband, ?uanito5 and T/@ TK@)+AN +4J K)N RE PE+@+ :P=,D77.77; plus %7L penalt& in the su! of @NE TK@)+AN TKREE K)N RE PE+@+ :P",.77.77; or the total su! of TKREE TK@)+AN N4NE K)N RE PE+@+ :P.,$77.77; representin' co!pensation for the death of her son, /ilfredo5 plus the further su! of >@)R K)N RE PE+@+ :P#77.77; for burial e0penses of ?uanito and /ilfredo Montero&o5 or a 'rand total for these t(o cases of TK4RTEEN TK@)+AN TKREE K)N RE PE+@+ :P".,.77.77;, throu'h this @ffice5 C. To pa& to counsel for clai!ants, Att&. An'el >. 3obaton, +r. the su! of T/@ TK@)+AN +4J K)N RE >@RT*->@)R PE+@+ :P=,D##.77; as attorne&8s fees5 and -. To pa& to the /or<!en8s Co!pensation >und, throu'h this @ffice, the su! of >4FE K)N RE T/ENT* PE+@+ :P%=7.77;, pursuant to +ection %% of the /or<!en8s Co!pensation Act, as a!ended." 3 @n +epte!ber "#, "$DD, herein petitioner filed a :"; !otion to set aside the order declarin' hi! in default and a :=; separate !otion to set aside the ecision of the Actin' Referee, to (hich seasonable oppositions (ere interposed b& private respondents on +epte!ber =D, "$DD. 4 @n @ctober =%, "$DD, Actin' Referee Bertito . adivas issued an @rder den&in' both !otions of petitioner. 5 A !otion for reconsideration (as then filed b& petitioner on Nove!ber #, "$DD, raisin', inter alia, the funda!ental 1uestion of 6urisdiction and denial of due process. 6 An opposition thereto (as interposed b& private respondents on Nove!ber "7, "$DD. 7 @n March =., "$C7, Associate :Medical; Co!!issioner Ker!inia Castelo-+otto, M. ., of the /or<!en Co!pensation Co!!ission rendered a decision affir!in' the earlier decision of the referee. 0 @n April "C, "$C7, petitioner sou'ht the revie( of the decision of Associate :Medical; Co!!ission Castelo-+otto b& the respondent /or<!en8s Co!pensation Co!!ission sittin' en banc, but the latter ho(ever affir!ed the decision (ith the !odification that the %7L additional co!pensation earlier i!posed as penalt& (as eli!inated, in its resolution of ?ul& C, "$C7. 9 issatisfied (ith the verdict, petitioner ca!e to this Court for reversal of the adverse decision a'ainst hi!. 444. 1,,2E, OF T.E CA,E 4n his brief before this Court the petitioner i!putes five errors co!!itted b& respondent /or<!en8s Co!pensation Co!!ission, viA9

". TKE RE+P@N ENT C@MM4++4@N ERRE AN E@R ACTE /4TK ,RAFE AB)+E @> 4+CRET4@N 4N K@3 4N, TKAT TKERE /A+ AN EMP3@*EREMP3@*EE RE3AT4@N+K4P BET/EEN TKE PET4T4@NER AN TKE ECEA+E CRE/ MEMBER+ @> TKE "4/A," >4+K4N, @)T>4T. =. TKE RE+P@N ENT C@MM4++4@N ERRE AN E@R ACTE /4TK ,RAFE AB)+E @> 4+CRET4@N 4N N@T EC3AR4N, 4T+E3> /4TK@)T ?)R4+ 4CT4@N @FER TKE C3A4M+ >@R EATK BENE>4T+. .. TKE RE+P@N ENT C@MM4++4@N ERRE AN E@R ACTE /4TK ,RAFE AB)+E @> 4+CRET4@N 4N >4N 4N, TKAT TKE EATK @> TKE ECEA+E CRE/ MEMBER 4+ C@MPEN+AB3E )N ER TKE /@RNMEN8+ C@MPEN+AT4@N ACT, A+ AMEN E , 4N >4N 4N, PET4T4@NER 34AB3E >@R TKE PA*MENT @> +)CK C@MPEN+AT4@N. #. TKE RE+P@N ENT C@MM4++4@N ERRE AN E@R ACTE /4TK ,RAFE AB)+E @> 4+CRET4@N 4N EN*4N, PET4T4@NER K4+ R4,KT T@ BE KEAR . %. TKE RE+P@N ENT C@MM4++4@N ERRE AN E@R ACTE /4TK ,RAFE AB)+E @> 4+CRET4@N, AM@)NT4N, T@ 3ACN @> ?)R4+ 4CT4@N, 4N ,RANT4N, EJCE++4FE A/AR + T@ TKE C3A4MANT+. The pivotal issue re1uirin' deter!ination is (ho is the statutor& e!plo&er of the decedents and (ho should be liable for their death co!pensation. Nevertheless, /e ta<e up the !erits of the points raised ad seriatim. 4F. $1,C2,,1OAs re'ards the first three interrelated assi'ned errors, there is a faint atte!pt b& petitioner A'ustino R. Abon' to evade liabilit& b& advancin' the theor& that he had absolutel& no voice or intervention in the choice, hirin', dis!issin', control, supervision and co!pensation of the fisher!en-cre( !e!bers, and that these !atters, (hich are the essence of e!plo&er-e!plo&ee relationship, are the sole responsibilit& of the tea! leader, +i!plicio Pan'aniban, and the tea!-!e!bers or cre( pursuant to their A'ree!ent :E0hibit ",";. 10 The contention of petitioner is devoid of !erit. 4t should be pointed out that this case is an appeal fro! the decision of the /or<!en8s Co!pensation Co!!ission. And in this class of proceedin's, onl& 1uestions of la( should be raised, the findin's of facts !ade b& the Co!!ission bein' conclusive and bindin' upon this Court. 11 Althou'h this Court is authoriAed to in1uire into the facts, it onl& does so (hen the conclusions therefro! are not supported b& the evidence. 4n the case at bar, ho(ever, this Court finds the findin's of fact !ade b& Associate :Medical; Co!!issioner Ker!inia Castelo-+otto, M. ., and concurred in b& the Co!!ission en banc to be full& supported b& the evidence on record (hich clearl& points out that petitioner A'ustino R. Abon' is the statutor& e!plo&er of the decedents. 4n rulin' for the deceased (or<ers, the Co!!ission said9 ... After a careful revie( of the evidence and the records, /e are inclined to a'ree (ith the proposition, advanced b& the clai!ant8s counsel that there e0isted an e!plo&er-e!plo&ee relationship bet(een the respondent and the decedents. Not onl& that the said deceased (or<ers (or<ed for and in the interest of the business of the herein respondent. But that the& (ere sub6ect to the control, supervision, and dis!issal of the respondent, thru its a'ent, +i!plicio Pan'aniban, the alle'ed "partner" of herein respondent. And (hile these (or<ers (ere paid in <ind, or b&

"pa<iao basis" still that fact did not alter the character of their relationship (ith the respondent as e!plo&ees of the latter. The intervention of +i!plicio Pan'aniban, in this case, is !erel& that of an a'ent or inter!ediar& bet(een the o(ner of the fishin' boat and the !e!bers of its cre(. 4n short, Pan'aniban is !erel& the person char'ed b& r. Abon' to recruit the said fisher!en to (or< for and for the enforce!ent of the business venture of herein respondent. The proposition, on the other hand, of the respondent8s counsel, that r. Abon' (as not the e!plo&er of the decedents, si!pl& because of an alle'ed partnership a'ree!ent, e0ecuted on March =., "$D=, bet(een the respondent, r. A'ustino R. Abon', as ">inancier" and +i!plicio Pan'aniban, as his "Tea! leader", is intended certainl& as a ver& clever device desi'ned pri!aril& to e0e!pt the e!plo&er fro! ans(erin' an& liabilit& under the provisions of the /or<!en8s Co!pensation Act, as a!ended. The said contract of partnership (hile it !a& be considered as valid and la(ful, bet(een the si'natories thereto, the respondent r. Abon' and his "partner" or a'ent, +i!plicio Pan'aniban, no(here in that said a'ree!ent did the decedents or their heirs in interests ta<e an& participation or !anifested their confor!it& to the said covenant. Thus, even if (e consider this contract as valid and enforceable bet(een the!, it cannot bind the non-si'natories thereto, li<e the deceased fisher!en. The case invo<ed b& the respondent :Pa6arillo, et al., vs. +ocial +ecurit& +&ste!, ,.R. No. 3-="$.7, Au'ust .", "$DD; can not be le'all& applied in the instant case, for the si!ple reason that the facts in that aforesaid case are not the sa!e as those in the case at bar. Moreover, (e are of the vie(, that the said Pa6arillo case !a& be 'ood onl& as far as the +ocial +ecurit& +&ste!, for purposes of !e!bership thereat, is concerned and is not readil& applicable to cases involvin' /or<!en8s Co!pensation clai!s as the one at bar. >or here, the contract of partnership, if valid, onl& binds the parties thereto, and the decedents in this case, as the records (ill sho(, (ere never a part& si'nator& thereto. Ko( then can (e tie the! to that partnership a'ree!ent (hen it onl& holds the t(o-part&, Abon' and Pan'aniban, as the sole partners in that a'ree!entO >urther!ore, even if Pan'aniban (ill be considered as an independent contractor, (hich he is not, his position as such (ill not relieve the e!plo&er, respondent Abon', fro! his liabilit& under the Act. 4t is (ell-defined in the Act, that an e!plo&er includes ever& person or association of persons, incorporated or not, public or private, and the le'al representatives of the deceased e!plo&er. 4t includes the o(ner or !ana'er of the business carried on in the establish!ent or place of (or< but (ho, for the reason that there is an independent contractor in the sa!e, or for an& other reason, is not the direct e!plo&er of laborers e!plo&ed there. :+ection .$, para'raphPsQ, /or<!en8s Co!pensation Act, as a!ended;. 000 000 000 12 As pointed out b& the Co!!ission8s findin's, the funda!ental bases sho(in' that petitioner, r. A'ustino R. Abon', is the e!plo&er, are present, na!el&, the selection and en'a'e!ent of the e!plo&ee5 the pa&!ent of (a'es5 the po(er of dis!issal and the e!plo&er8s po(er to control the e!plo&ees8 conduct. 13 These po(ers (ere lod'ed in petitioner Abon', thru his a'ent, +i!plicio Pan'aniban, (ho! he alle'es to be his "partner". @n this score alone, the petitioner for revie( !ust

fail. 4t is (ell-settled that e!plo&er-e!plo&ee relationship involves findin's of fact (hich are conclusive and bindin' and not sub6ect to revie( b& this Court. 14 Petitioner also ar'ues that he (as denied his ri'ht to heard. properl& notified of the proceedin's a'ainst hi!.
15

4t is contended that petitioner (as not

The assi'ned error !erits scant consideration. Proper notices and clai!s for co!pensation to'ether (ith a for!al letter to acco!plish /CC >or! No. . G E!plo&er8s Report Accident or +ic<ness G (ere dul& served upon petitioner at his place of business in +a'a&, Ne'ros @ccidental. 16 Kis failure to clai! his !ail and to ans(er the clai!s or controvert the sa!e and to acco!plish /CC >or! No. ., are fatal errors (hich cannot be repaired at this ti!e. 4t needs no ar'u!ent to sho( that service b& re'istered !ail is dee!ed co!pleted upon petitioner8s failure to clai! his !ail fro! the post office (ithin five :%; da&s fro! the first notice sent b& the post!aster. 17 The further contention that the "notices" should have been sent his place of residence in Bacolod Cit& is of no !o!ent either. +ection =D of Republic Act No. .#=-, as a!ended, provides9 +EC. =D. eliver& of notice and clai! ... . The notices shall be served b& personal deliver& or b& sendin' it b& re'istered letter addressed to the e!plo&er at his last <no(n residence or at &is place of business. :E!phasis supplied; Clearl&, there (as no error in sendin' petitioner8s !ails to his place of business at +a'a&, Ne'ros @ccidental. And no( /e co!e to the last point. 4t is contended that respondent Co!!ission erred in 'rantin' e0cessive a(ards the clai!ants. /e find this contention incorrect. The Co!!ission8s findin's relative to the (a'es of the decedents are findin's facts (hich are not open to revie( b& this Court as the sa!e are supported b& substantial evidence on record. 10 /e, therefore, find no co'ent reason to disturb the Co!!ission8s findin's on this point. F. CO-C"2,1O)nder the circu!stances, private respondents8 clai! should be upheld not onl& because the& are supported b& the evidence on record, but also because the /or<!en8s Co!pensation Act is a social le'islation desi'ned to 'ive relief to the (or<!an (ho has been the victi! of an accident in the pursuit of his e!plo&!ent, and the la( !ust be liberall& construed to attain the purpose for (hich it (as enacted. 19 Moreover, this Tribunal finds no reason in this case to depart fro! the rule (hich li!its its appellate 6urisdiction to the revie( of errors of la( onl&, acceptin' as conclusive the factual findin's of the /or<!en8s Co!pensation Co!!ission (hich in this case are supported b& substantial evidence. F4. J2$#'E-T ACC@R 4N,3*, the assailed decision is hereb& full& affir!ed. Costs a'ainst the petitioner. 'a+alintal C.J., Castro, Tee&an+ee, 'a+asiar and 'u3oz Palma, JJ., concur. 6oo#)o#$!

" Record, p. =7. = Record, pp. "$-=7. . Record, pp. ."-... # 1d., p. .#5 .C5 #"5 #C. % 1d., p. %C. D 1d., pp. %--D%. C 1d., pp. DD-C=. - Record, pp. -=-$7. $ 1d., pp. -.-$75 $=-$.. "7 Record, p. ".. "" Bernardo v. Pascual, "7$ Phil. $.D, $.$. "= Record, pp. C$--". ". 1d., e los Re&es v. Espineli, .7 +CRA %C#. "# 1d., R.>. +u'a& 2 Co., 4nc. v. Re&es, et al., .7 +CRA C7%. "% Accordin' to the constitutional provision in force at the ti!e the hearin' too< place9 "No person shall be deprived of life, libert&, or propert& (ithout due process of la(, nor shall an& person be denied the e1ual protection of the la(s." Article 444, +ection ", par. ". +uch a provision, identicall& (orded, is no( found in +ection " of Article 4F of the Ne( Constitution. "D Record, p. "#. "C Rule "., +ec. -, Rules of Court. "- Bard(ill Bros. v. Philippine 3abor )nion, C7 Phil., DC=, DC.5 4nternational @il >actor& v. MartineA, et al., "7$ Phil. %%., %%#. "$ Abana v. Buisu!bin', == +CRA "=C-, "=-.5 Batan'as Transportation Co. v. PereA, "" +CRA C$., C$$5 >rancisco v. Consin', D. Phil. .%#, .D7.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 31057 S$2#$8&$r 7, 1929 A.RIANO AR-ES, ET AL., plaintiffs-appellees, vs. =ICENTE POLISTICO, ET AL., defendants-appellants. 'arcelino "onto+ and 'anuel dela osa for appellants. ,umulong 4 "a%ides for appellees. =ILLAMOR, J.: This is an action to brin' about li1uidation of the funds and propert& of the association called "Turnuhan Polistico 2 Co." The plaintiffs (ere !e!bers or shareholders, and the defendants (ere desi'nated as president-treasurer, directors and secretar& of said association. 4t is (ell to re!e!ber that this case is no( brou'ht before the consideration of this court for the second ti!e. The first one (as (hen the sa!e plaintiffs appeared fro! the order of the court belo( sustainin' the defendant8s de!urrer, and re1uirin' the for!er to a!end their co!plaint (ithin a period, so as to include all the !e!bers of "Turnuhan Polistico 2 Co.," either as plaintiffs or as a defendants. This court held then that in an action a'ainst the officers of a voluntar& association to (ind up its affairs and enforce an accountin' for !one& and propert& in their possessions, it is not necessar& that all !e!bers of the association be !ade parties to the action. :Borlasa vs. Polistico, #C Phil., .#%.; The case havin' been re!anded to the court of ori'in, both parties a!end, respectivel&, their co!plaint and their ans(er, and b& a'ree!ent of the parties, the court appointed A!adeo R. Buintos, of the 4nsular Auditor8s @ffice, co!!issioner to e0a!ine all the boo<s, docu!ents, and accounts of "Turnuhan Polistico 2 Co.," and to receive (hatever evidence the parties !i'ht desire to present. The co!!issioner rendered his report, (hich is attached to the record, (ith the follo(in' resu!e9 4nco!e9 Me!ber8s shares............................ Credits paid................................ 4nterest received........................... Miscellaneous............................... $C,=D..C7 D,"$D.%% #,%D$.#% ",-$".77 P"7$,D=7.C7 E0penses9 Pre!iu!s to !e!bers....................... D-,"#D.=%

3oans on real-estate....................... 3oans on pro!issor& notes.............. +alaries.................................... Miscellaneous...............................

$,-=C.77 #,=%-.%% ",7$%.77 ",D-D."7 -%,7"=.$7

Cash on hand........................................

=#,D7C.-7

The defendants ob6ected to the co!!issioner8s report, but the trial court, havin' e0a!ined the reasons for the ob6ection, found the sa!e sufficientl& e0plained in the report and the evidence, and acceptin' it, rendered 6ud'!ent, holdin' that the association "Turnuhan Polistico 2 Co." is unla(ful, and sentencin' the defendants 6ointl& and severall& to return the a!ount of P=#,D7C.-7, as (ell as the docu!ents sho(in' the uncollected credits of the association, to the plaintiffs in this case, and to the rest of the !e!bers of the said association represented b& said plaintiffs, (ith costs a'ainst the defendants. The defendants assi'ned several errors as 'rounds for their appeal, but (e believe the& can all be reduced to t(o points, to (it9 :"; That not all persons havin' an interest in this association are included as plaintiffs or defendants5 :=; that the ob6ection to the co!!issioner8s report should have been ad!itted b& the court belo(. As to the first point, the decision on the case of Borlasa vs. Polistico, supra, !ust be follo(ed. /ith re'ard to the second point, despite the praise(orth& efforts of the attorne& of the defendants, (e are of opinion that, the trial court havin' e0a!ined all the evidence touchin' the 'rounds for the ob6ection and havin' found that the& had been e0plained a(a& in the co!!issioner8s report, the conclusion reached b& the court belo(, acceptin' and adoptin' the findin's of fact contained in said report, and especiall& those referrin' to the disposition of the association8s !one&, should not be disturbed. 4n Tan iansen' Tan +iu Pic vs. EchauA Tan +iuco :% Phil., %"D;, it (as held that the findin's of facts !ade b& a referee appointed under the provisions of section ".% of the Code of Civil Procedure stand upon the sa!e basis, (hen approved b& the Court, as findin's !ade b& the 6ud'e hi!self. And in Nriedt vs. E. C. McCullo'h 2 Co.:.C Phil., #C#;, the court held9 ")nder section "#7 of the Code of Civil Procedure it is !ade the dut& of the court to render 6ud'!ent in accordance (ith the report of the referee unless the court shall unless for cause sho(n set aside the report or reco!!it it to the referee. This provision places upon the liti'ant parties of the dut& of discoverin' and e0hibitin' to the court an& error that !a& be contained therein." The appellants stated the 'rounds for their ob6ection. The trial e0a!ined the evidence and the co!!issioner8s report, and accepted the findin's of fact !ade in the report. /e find no convincin' ar'u!ents on the appellant8s brief to 6ustif& a reversal of the trial court8s conclusion ad!ittin' the co!!issioner8s findin's. There is no 1uestion that "Turnuhan Polistico 2 Co." is an unla(ful partnership :).+. vs. Ba'uio, .$ Phil., $D=;, but the appellants alle'e that because it is so, so!e charitable institution to (ho! the partnership funds !a& be ordered to be turned over, should be included, as a part& defendant. The appellants refer to article "DDD of the Civil Code, (hich provides9

A partnership !ust have a la(ful ob6ect, and !ust be established for the co!!on benefit of the partners. /hen the dissolution of an unla(ful partnership is decreed, the profits shall be 'iven to charitable institutions of the do!icile of the partnership, or, in default of such, to those of the province. Appellant8s contention on this point is untenable. Accordin' to said article, no charitable institution is a necessar& part& in the present case of deter!ination of the ri'hts of the parties. The action (hich !a& arise fro! said article, in the case of unla(ful partnership, is that for the recover& of the a!ounts paid b& the !e!ber fro! those in char'e of the ad!inistration of said partnership, and it is not necessar& for the said parties to base their action to the e0istence of the partnership, but on the fact that of havin' contributed so!e !one& to the partnership capital. And hence, the charitable institution of the do!icile of the partnership, and in the default thereof, those of the province are not necessar& parties in this case. The article cited above per!its no action for the purpose of obtainin' the earnin's !ade b& the unla(ful partnership, durin' its e0istence as result of the business in (hich it (as en'a'ed, because for the purpose, as Manresa re!ar<s, the partner (ill have to base his action upon the partnership contract, (hich is to annul and (ithout le'al e0istence b& reason of its unla(ful ob6ect5 and it is self evident that (hat does not e0ist cannot be a cause of action. Kence, para'raph = of the sa!e article provides that (hen the dissolution of the unla(ful partnership is decreed, the profits cannot inure to the benefit of the partners, but !ust be 'iven to so!e charitable institution. /e dee! in pertinent to 1uote Manresa8s co!!entaries on article "DDD at len'th, as a clear e0planation of the scope and spirit of the provision of the Civil Code (hich (e are concerned. Co!!entin' on said article Manresa, a!on' other thin's sa&s9 /hen the subscriptions of the !e!bers have been paid to the !ana'e!ent of the partnership, and e!plo&ed b& the latter in transactions consistent (ith the purposes of the partnership !a& the for!er de!and the return of the rei!burse!ent thereof fro! the !ana'er or ad!inistrator (ithholdin' the!O Apropos of this, it is asserted9 4f the partnership has no valid e0istence, if it is considered 6uridicall& non-e0istent, the contract entered into can have no le'al effect5 and in that case, ho( can it 'ive rise to an action in favor of the partners to 6udiciall& de!and fro! the !ana'er or the ad!inistrator of the partnership capital, each one8s contributionO The authors discuss this point at 'reat len'th, but Ricci decides the !atter 1uite clearl&, dispellin' all doubts thereon. Ke holds that the partner (ho li!its hi!self to de!andin' onl& the a!ount contributed b& hi! need not resort to the partnership contract on (hich to base his action. And he adds in e0planation that the partner !a<es his contribution, (hich passes to the !ana'in' partner for the purpose of carr&in' on the business or industr& (hich is the ob6ect of the partnership5 or in other (ords, to breathe the breath of life into a partnership contract (ith an ob6ection forbidden b& la(. And as said contrast does not e0ist in the e&es of the la(, t&e purpose fro! (hich the contribution (as !ade has not co!e into e0istence, and the ad!inistrator of the partnership holdin' said contribution retains (hat belon's to others, 5it&out an! consideration5 for (hich reason he is not bound to return it and he (ho has paid in his share is entitled to recover it.

But this is not the case (ith re'ard to profits earned in the course of the partnership, because the& do not constitute or represent the partner8s contribution but are the result of the industr&, business or speculation (hich is the ob6ect of the partnership, and therefor, in order to de!and the proportional part of the said profits, the partner (ould have to base his action on the contract (hich is null and void, since this partition or distribution of the profits is one of the 6uridical effects thereof. /herefore considerin' this contract as non0e/istent, b& reason of its illicit ob6ect, it cannot 'ive rise to the necessar& action, (hich !ust be the basis of the 6udicial co!plaint. >urther!ore, it (ould be i!!oral and un6ust for the la( to per!it a profit fro! an industr& prohibited b& it. Kence the distinction !ade in the second para'raph of this article of this Code, providin' that the profits obtained b& unla(ful !eans shall not enrich the partners, but shall upon the dissolution of the partnership, be 'iven to the charitable institutions of the do!icile of the partnership, or, in default of such, to those of the province. This is a ne( rule, unprecedented b& our la(, introduced to suppl& an obvious deficienc& of the for!er la(, (hich did not describe the purpose to (hich those profits denied the partners (ere to be applied, nor state (hat to be done (ith the!. The profits are so applied, and not the contributions, because this (ould be an e0cessive and un6ust sanction for, as (e have seen, there is no reason, in such a case, for deprivin' the partner of the portion of the capital that he contributed, the circu!stances of the t(o cases bein' entirel& different. @ur Code does not state (hether, upon the dissolution of the unla(ful partnership, the a!ounts contributed are to be returned b& the partners, because it onl& deals (ith the disposition of the profits5 but the fact that said contributions are not included in the disposal prescribed profits, sho(s that in conse1uences of said e0clusion, the 'eneral la( !ust be follo(ed, and hence the partners should rei!burse the a!ount of their respective contributions. An& other solution is i!!oral, and the la( (ill not consent to the latter re!ainin' in the possession of the !ana'er or ad!inistrator (ho has refused to return the!, b& den&in' to the partners the action to de!and the!. :Manresa, Co!!entaries on the +panish Civil Code, vol. J4, pp. =D=-=D#; The 6ud'!ent appealed fro!, bein' in accordance (ith la(, should be, as it is hereb&, affir!ed (ith costs a'ainst the appellants5 provided, ho(ever, the defendants shall pa& the le'al interest on the su! of P=#,D7C.-7 fro! the date of the decision of the court, and provided, further, that the defendants shall deposit this su! of !one& and other docu!ents evidencin' uncollected credits in the office of the cler< of the trial court, in order that said court !a& distribute the! a!on' the !e!bers of said association, upon bein' dul& identified in the !anner that it !a& dee! proper. +o ordered. A%ance3a, C.J., Jo&nson, ,treet, Jo&ns, omualdez, and (illa0 eal, JJ., concur.

EN BANC G.R. No. L-21101 November 12, 1923 PACIFIC COMMERCIAL COMPANY, ASIATIC PETROLEUM COMPANY P. I.!, LT"., #$% INTERNATIONAL &AN'ING CORPORATION, petitioners-appellants, vs. ANTONIO CAMPOS RUE"A #$% (OSE CAMPOS RUE"A, partnersappellees. ROMUAL"E), J.:
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The petitioners appeal from an order of the Court of First nstance of !anila settin" aside a previous order which directed the receiver to ta#e possession of the boo#s, papers, and private property of the partners, and prohibited the payment to the latter of their private credits, and the collection of their debts.
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The appellants contend that with the annulment of said order, $ud"ment of this court of Au"ust %&, '(%%, in case ). *. No. '&+,- becomes ineffective. 1
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.uch a conclusion is untenable, considerin" that the pronouncement prayed for and made in said case ). *. No. '&+,- was one declarin" insolvent the partnership Campos *ueda / Co., the partners not havin" been individually summoned or heard in that proceedin".
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The order appealed from is hereby affirmed, with the costs a"ainst the appellants. .o ordered. Johnson, Street, Malcolm, Avancena, Villamor and Johns, JJ., concur.

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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-25532 6$&r(ar' 20, 1969 COMMISSIONER O6 INTERNAL RE=ENUE, petitioner, vs. 9ILLIAM *. SUTER a)% T,E COURT O6 TA> APPEALS, respondents. Office of t&e ,olicitor #eneral Antonio P. Barredo, Assistant ,olicitor #eneral Felicisimo and ,pecial Attorne!s B. #atdula, Jr. and T. Temprosa Jr. for petitioner. A. ,. 'onzon, #utierrez, Farrales and Ong for respondents. RE ES, *.-.L., J.: A li!ited partnership, na!ed "/illia! ?. +uter 8Morcoin8 Co., 3td.," (as for!ed on .7 +epte!ber "$#C b& herein respondent /illia! ?. +uter as the 'eneral partner, and ?ulia +piri' and ,ustav Carlson, as the li!ited partners. The partners contributed, respectivel&, P=7,777.77, P"-,777.77 and P=,777.77 to the partnership. @n " @ctober "$#C, the li!ited partnership (as re'istered (ith the +ecurities and E0chan'e Co!!ission. The fir! en'a'ed, a!on' other activities, in the i!portation, !ar<etin', distribution and operation of auto!atic phono'raphs, radios, television sets and a!use!ent !achines, their parts and accessories. 4t had an office and held itself out as a li!ited partnership, handlin' and carr&in' !erchandise, usin' invoices, bills and letterheads bearin' its trade-na!e, !aintainin' its o(n boo<s of accounts and ban< accounts, and had a 1uota allocation (ith the Central Ban<. 4n "$#-, ho(ever, 'eneral partner +uter and li!ited partner +piri' 'ot !arried and, thereafter, on "ece!ber "$#-, li!ited partner Carlson sold his share in the partnership to +uter and his (ife. The sale (as dul& recorded (ith the +ecurities and E0chan'e Co!!ission on =7 ece!ber "$#-. The li!ited partnership had been filin' its inco!e ta0 returns as a corporation, (ithout ob6ection b& the herein petitioner, Co!!issioner of 4nternal Revenue, until in "$%$ (hen the latter, in an assess!ent, consolidated the inco!e of the fir! and the individual inco!es of the partners-spouses +uter and +piri' resultin' in a deter!ination of a deficienc& inco!e ta0 a'ainst respondent +uter in the a!ount of P=,DC-.7D for "$%# and P#,%DC.77 for "$%%. Respondent +uter protested the assess!ent, and re1uested its cancellation and (ithdra(al, as not in accordance (ith la(, but his re1uest (as denied. )nable to secure a reconsideration, he appealed to the Court of Ta0 Appeals, (hich court, after trial, rendered a decision, on "" Nove!ber "$D%, reversin' that of the Co!!issioner of 4nternal Revenue. The present case is a petition for revie(, filed b& the Co!!issioner of 4nternal Revenue, of the ta0 court8s aforesaid decision. 4t raises these issues9 :a; /hether or not the corporate personalit& of the /illia! ?. +uter "Morcoin" Co., 3td. should be disre'arded for inco!e ta0 purposes, considerin' that respondent /illia! ?. +uter and his (ife, ?ulia +piri' +uter actuall& for!ed a sin'le ta0able unit5 and . osete

:b; /hether or not the partnership (as dissolved after the !arria'e of the partners, respondent /illia! ?. +uter and ?ulia +piri' +uter and the subse1uent sale to the! b& the re!ainin' partner, ,ustav Carlson, of his participation of P=,777.77 in the partnership for a no!inal a!ount of P".77. The theor& of the petitioner, Co!!issioner of 4nternal Revenue, is that the !arria'e of +uter and +piri' and their subse1uent ac1uisition of the interests of re!ainin' partner Carlson in the partnership dissolved the li!ited partnership, and if the& did not, the fiction of 6uridical personalit& of the partnership should be disre'arded for inco!e ta0 purposes because the spouses have e0clusive o(nership and control of the business5 conse1uentl& the inco!e ta0 return of respondent +uter for the &ears in 1uestion should have included his and his (ife8s individual inco!es and that of the li!ited partnership, in accordance (ith +ection #% :d; of the National 4nternal Revenue Code, (hich provides as follo(s9 :d; .usband and 5ife. G 4n the case of !arried persons, (hether citiAens, residents or nonresidents, onl& one consolidated return for the ta0able &ear shall be filed b& either spouse to cover the inco!e of both spouses5 .... 4n refutation of the fore'oin', respondent +uter !aintains, as the Court of Ta0 Appeals held, that his !arria'e (ith li!ited partner +piri' and their ac1uisition of Carlson8s interests in the partnership in "$#- is not a 'round for dissolution of the partnership, either in the Code of Co!!erce or in the Ne( Civil Code, and that since its 6uridical personalit& had not been affected and since, as a li!ited partnership, as contra distin'uished fro! a dul& re'istered 'eneral partnership, it is ta0able on its inco!e si!ilarl& (ith corporations, +uter (as not bound to include in his individual return the inco!e of the li!ited partnership. /e find the Co!!issioner8s appeal un!eritorious. The thesis that the li!ited partnership, /illia! ?. +uter "Morcoin" Co., 3td., has been dissolved b& operation of la( because of the !arria'e of the onl& 'eneral partner, /illia! ?. +uter to the ori'inall& li!ited partner, ?ulia +piri' one &ear after the partnership (as or'aniAed is rested b& the appellant upon the opinion of no( +enator Tolentino in Co!!entaries and ?urisprudence on Co!!ercial 3a(s of the Philippines, Fol. ", #th Ed., pa'e %-, that reads as follo(s9 A husband and a (ife !a& not enter into a contract of general copartnership, because under the Civil Code, (hich applies in the absence of e0press provision in the Code of Co!!erce, persons prohibited fro! !a<in' donations to each other are prohibited fro! enterin' into uni%ersal partnerships. := Echaverri "$D; 4t follo(s that the !arria'e of partners necessaril& brin's about the dissolution of a pre-e0istin' partnership. :" ,u& de Montella %-; The petitioner-appellant has evidentl& failed to observe the fact that /illia! ?. +uter "Morcoin" Co., 3td. (as not a uni%ersal partnership, but a particular one. As appears fro! Articles "DC# and "DC% of the +panish Civil Code, of "--$ :(hich (as the la( in force (hen the sub6ect fir! (as or'aniAed in "$#C;, a uni%ersal partnership re1uires either that the ob6ect of the association be all t&e present propert! of the partners, as contributed b& the! to the co!!on fund, or else "all that the partners !a& ac1uire b& their industr! or 5or+ durin' the e0istence of the partnership". /illia! ?. +uter "Morcoin" Co., 3td. (as not such a universal partnership, since the contributions of the partners (ere fi0ed su!s of !one&, P=7,777.77 b& /illia! +uter and P"-,777.77 b& ?ulia +piri' and neither one of the! (as an industrial partner. 4t follo(s that /illia! ?. +uter "Morcoin" Co., 3td. (as not a partnership that spouses (ere forbidden to enter b& Article "DCC of the Civil Code of "--$.

The for!er Chief ?ustice of the +panish +upre!e Court, . ?ose Casan, in his erecho Civil, Cth Edition, "$%=, Folu!e #, pa'e %#D, footnote ", sa&s (ith re'ard to the prohibition contained in the aforesaid Article "DCC9 3os con&u'es, se'un esto, no pueden celebrar entre si el contrato de sociedad universal, pero o podran constituir sociedad particularO Aun1ue el punto ha sido !u& debatido, nos inclina!os a la tesis per!isiva de los contratos de sociedad particular entre esposos, &a 1ue nin'un precepto de nuestro Codi'o los prohibe, & ha& 1ue estar a la nor!a 'eneral se'un la 1ue toda persona es capaA para contratar !ientras no sea declarado incapaA por la le&. 3a 6urisprudencia de la ireccion de los Re'istros fue favorable a esta !is!a tesis en su resolution de . de febrero de "$.D, !as parece ca!biar de ru!bo en la de $ de !arAo de "$#.. Nor could the subse1uent !arria'e of the partners operate to dissolve it, such !arria'e not bein' one of the causes provided for that purpose either b& the +panish Civil Code or the Code of Co!!erce. The appellant8s vie(, that b& the !arria'e of both partners the co!pan& beca!e a sin'le proprietorship, is e1uall& erroneous. The capital contributions of partners /illia! ?. +uter and ?ulia +piri' (ere separatel& o(ned and contributed b& the! before their !arria'e5 and after the& (ere 6oined in (edloc<, such contributions re!ained their respective separate propert& under the +panish Civil Code :Article ".$D;9 The follo(in' shall be the e/clusi%e propert& of each spouse9 :a; That (hich is brou'ht to the !arria'e as his or her o(n5 .... Thus, the individual interest of each consort in /illia! ?. +uter "Morcoin" Co., 3td. did not beco!e co!!on propert& of both after their !arria'e in "$#-. 4t bein' a basic tenet of the +panish and Philippine la( that the partnership has a 6uridical personalit& of its o(n, distinct and separate fro! that of its partners :unli<e A!erican and En'lish la( that does not reco'niAe such separate 6uridical personalit&;, the b&passin' of the e0istence of the li!ited partnership as a ta0pa&er can onl& be done b& i'norin' or disre'ardin' clear statutor& !andates and basic principles of our la(. The li!ited partnership8s separate individualit& !a<es it i!possible to e1uate its inco!e (ith that of the co!ponent !e!bers. True, section =# of the 4nternal Revenue Code !er'es re'istered 'eneral co-partnerships :compa3ias colecti%as; (ith the personalit& of the individual partners for inco!e ta0 purposes. But this rule is e0ceptional in its disre'ard of a cardinal tenet of our partnership la(s, and can not be e0tended b& !ere i!plication to li!ited partnerships. The rulin's cited b& the petitioner :Collector of 4nternal Revenue vs. )niversit& of the Fisa&as, 3".%%#, Resolution of .7 @ctober "$D#, and Noppel PPhil.Q, 4nc. vs. *atco, CC Phil. %7#; as authorit& for disre'ardin' the fiction of le'al personalit& of the corporations involved therein are not applicable to the present case. 4n the cited cases, the corporations (ere alread& sub)ect to ta0 (hen the fiction of their corporate personalit& (as pierced5 in the present case, to do so (ould e/empt the li!ited partnership fro! inco!e ta0ation but (ould thro( the ta0 burden upon the partners-spouses in their individual capacities. The corporations, in the cases cited, !erel& served as business conduits or alter egos of the stoc<holders, a factor that 6ustified a disre'ard of their corporate personalities for ta0 purposes. This is not true in the present case. Kere, the li!ited partnership is not a !ere business conduit of the partner-spouses5 it (as or'aniAed for le'iti!ate business purposes5 it conducted its o(n dealin's (ith its custo!ers prior to appellee8s !arria'e, and had been filin' its

o(n inco!e ta0 returns as such independent entit&. The chan'e in its !e!bership, brou'ht about b& the !arria'e of the partners and their subse1uent ac1uisition of all interest therein, is no 'round for (ithdra(in' the partnership fro! the covera'e of +ection =# of the ta0 code, re1uirin' it to pa& inco!e ta0. As far as the records sho(, the partners did not enter into !atri!on& and thereafter bu& the interests of the re!ainin' partner (ith the pre!editated sche!e or desi'n to use the partnership as a business conduit to dod'e the ta0 la(s. Re'ularit&, not other(ise, is presu!ed. As the li!ited partnership under consideration is ta0able on its inco!e, to re1uire that inco!e to be included in the individual ta0 return of respondent +uter is to overstretch the letter and intent of the la(. 4n fact, it (ould even conflict (ith (hat it specificall& provides in its +ection =#9 for the appellant Co!!issioner8s stand results in e1ual treat!ent, ta0 (ise, of a 'eneral copartnership : compa3ia colecti%a; and a li!ited partnership, (hen the code plainl& differentiates the t(o. Thus, the code ta0es the latter on its inco!e, but not the for!er, because it is in the case of compa3ias colecti%as that the !e!bers, and not the fir!, are ta0able in their individual capacities for an& dividend or share of the profit derived fro! the dul& re'istered 'eneral partnership :+ection =D, N.4.R.C.5 AraHas, Anno. 2 ?uris. on the N.4.R.C., As A!ended, Fol. ", pp. ----$;.
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But it is ar'ued that the inco!e of the li!ited partnership is actuall& or constructivel& the inco!e of the spouses and for!s part of the con6u'al partnership of 'ains. This is not (holl& correct. As pointed out in A'apito vs. Molo %7 Phil. CC$, and People8s Ban< vs. Re'ister of eeds of Manila, D7 Phil. "DC, the fruits of the (ife8s parapherna beco!e con6u'al onl& (hen no lon'er needed to defra& the e0penses for the ad!inistration and preservation of the paraphernal capital of the (ife. Then a'ain, the appellant8s ar'u!ent erroneousl& confines itself to the 1uestion of the le'al personalit& of the li!ited partnership, (hich is not essential to the inco!e ta0abilit& of the partnership since the la( ta0es the inco!e of even 6oint accounts that have no personalit& of their o(n. " Appellant is, li<e(ise, !ista<en in that it assu!es that the con6u'al partnership of 'ains is a ta0able unit, (hich it is not. /hat is ta0able is the "inco!e of both spouses" :+ection #% PdQ in their individual capacities. Thou'h the a!ount of inco!e :inco!e of the con6u'al partnership %is0a0%is the 6oint inco!e of husband and (ife; !a& be the sa!e for a 'iven ta0able &ear, their conse1uences (ould be different, as their contributions in the business partnership are not the sa!e. The difference in ta0 rates bet(een the inco!e of the li!ited partnership bein' consolidated (ith, and (hen split fro! the inco!e of the spouses, is not a 6ustification for re1uirin' consolidation5 the revenue code, as it presentl& stands, does not authoriAe it, and even bars it b& re1uirin' the li!ited partnership to pa& ta0 on its o(n inco!e. >@R TKE >@RE,@4N, REA+@N+, the decision under revie( is hereb& affir!ed. No costs. Concepcion, C.J., $izon, 'a+alintal, 8aldi%ar, ,anc&ez, Castro, Fernando, Capistrano and Tee&an+ee, JJ., concur. Barredo, J., too+ no part. 6oo#)o#$! F. Evan'elists vs. Collector of 4nternal Revenue, "7= Phil "#75 Collector vs. Batan'as Transportation Co., "7= Phil. -==.
"