1. Lim Tong Lim V. Phil.

Fishing Gear Industries

Business Organization Partnership, Agency, Trust Corporation by Estoppel

FACTS
It was established that Lim Tong Lim requested Peter Yao to engage in commercial fishing with
him and one Antonio Chua. The three agreed to purchase two fishing boats but since they do not
have the money they borrowed from one Jesus Lim (brother of Lim Tong Lim). They again borrowed
money and they agreed to purchase fishing nets and other fishing equipments. Now, Yao and Chua
represented themselves as acting in behalf of Ocean Quest Fishing Corporation (OQFC) they
contracted with Philippine Fishing Gear Industries (PFGI) for the purchase of fishing nets amounting
to more than P500k.
They were however unable to pay PFGI and so they were sued in their own names because
apparently OQFC is a non-existent corporation. Chua admitted liability and asked for some time to
pay. Yao waived his rights. Lim Tong Lim however argued that hes not liable because he was not
aware that Chua and Yao represented themselves as a corporation; that the two acted without his
knowledge and consent.
ISSUE: Whether or not Lim Tong Lim is liable.
HELD: Yes. From the factual findings of both lower courts, it is clear that Chua, Yao and Lim had
decided to engage in a fishing business, which they started by buying boats worth P3.35 million,
financed by a loan secured from Jesus Lim. In their Compromise Agreement, they subsequently
revealed their intention to pay the loan with the proceeds of the sale of the boats, and to divide
equally among them the excess or loss. These boats, the purchase and the repair of which were
financed with borrowed money, fell under the term common fund under Article 1767. The
contribution to such fund need not be cash or fixed assets; it could be an intangible like credit or
industry. That the parties agreed that any loss or profit from the sale and operation of the boats would
be divided equally among them also shows that they had indeed formed a partnership.
Lim Tong Lim cannot argue that the principle of corporation by estoppels can only be imputed to Yao
and Chua. Unquestionably, Lim Tong Lim benefited from the use of the nets found in his boats, the
boat which has earlier been proven to be an asset of the partnership. Lim, Chua and Yao decided to
form a corporation. Although it was never legally formed for unknown reasons, this fact alone does
not preclude the liabilities of the three as contracting parties in representation of it. Clearly, under the
law on estoppel, those acting on behalf of a corporation and those benefited by it, knowing it to be
without valid existence, are held liable as general partners

2. Evangelista, et al. v. CIR, GR No. L-9996, October 15, 1957

Facts: Herein petitioners seek a review of CTAs decision holding them liable for income tax, real
estate dealers tax and residence tax. As stipulated, petitioners borrowed from their father a certain
sum for the purpose of buying real properties. Within February 1943 to April 1994, they have bought
parcels of land from different persons, the management of said properties was charged to their
brother Simeon evidenced by a document. These properties were then leased or rented to various
tenants.
On September 1954, CIR demanded the payment of income tax on corporations, real estate
dealers fixed tax, and corporation residence tax to which the petitioners seek to be absolved from
such payment.

Issue: Whether petitioners are subject to the tax on corporations.

Ruling:
The Court ruled that with respect to the tax on corporations, the issue hinges on the
meaning of the terms corporation and partnership as used in Section 24 (provides that a tax shall
be levied on every corporation no matter how created or organized except general co-partnerships)
and 84 (provides that the term corporation includes among others, partnership) of the NIRC. Pursuant
to Article 1767, NCC (provides for the concept of partnership), its essential elements are: (a) an
agreement to contribute money, property or industry to a common fund; and (b) intent to divide the
profits among the contracting parties.
It is of the opinion of the Court that the first element is undoubtedly present for petitioners have
agreed to, and did, contribute money and property to a common fund. As to the second element, the
Court fully satisfied that their purpose was to engage in real estate transactions for monetary gain and
then divide the same among themselves as indicated by the following circumstances:
1.
The common fund was not something they found already in existence nor a property inherited
by them pro indiviso. It was created purposely, jointly borrowing a substantial portion thereof in order
to establish said common fund;
2.
They invested the same not merely in one transaction, but in a series of transactions. The
number of lots acquired and transactions undertake is strongly indicative of a pattern or common
design that was not limited to the conservation and preservation of the aforementioned common fund
or even of the property acquired. In other words, one cannot but perceive a character of habitually
peculiar to business transactions engaged in the purpose of gain;
3.
Said properties were not devoted to residential purposes, or to other personal uses, of
petitioners but were leased separately to several persons;
4.
They were under the management of one person where the affairs relative to said properties
have been handled as if the same belonged to a corporation or business and enterprise operated for
profit;
5.
Existed for more than ten years, or, to be exact, over fifteen years, since the first property was
acquired, and over twelve years, since Simeon Evangelista became the manager;
6.
Petitioners have not testified or introduced any evidence, either on their purpose in creating the
set up already adverted to, or on the causes for its continued existence.

The collective effect of these circumstances is such as to leave no room for doubt on the existence of
said intent in petitioners herein.
Also, petitioners argument that their being mere co-owners did not create a separate legal
entity was rejected because, according to the Court, the tax in question is one imposed upon
"corporations", which, strictly speaking, are distinct and different from "partnerships". When the NIRC
includes "partnerships" among the entities subject to the tax on "corporations", said Code must
allude, therefore, to organizations which are not necessarily "partnerships", in the technical sense of
the term. The qualifying expression found in Section 24 and 84(b) clearly indicates that a joint venture
need not be undertaken in any of the standard forms, or in conformity with the usual requirements of
the law on partnerships, in order that one could be deemed constituted for purposes of the tax on
corporations. Accordingly, the lawmaker could not have regarded that personality as a condition
essential to the existence of the partnerships therein referred to. For purposes of the tax on
corporations, NIRC includes these partnerships - with the exception only of duly registered general co
partnerships - within the purview of the term "corporation." It is, therefore, clear that petitioners herein
constitute a partnership, insofar as said Code is concerned and are subject to the income tax for
corporations.

As regards the residence of tax for corporations (Section 2 of CA No. 465), it is analogous to that of
section 24 and 84 (b) of the NIRC. It is apparent that the terms "corporation" and "partnership" are
used in both statutes with substantially the same meaning. Consequently, petitioners are subject,
also, to the residence tax for corporations.
Finally, on the issues of being liable for real estate dealers tax, they are also liable for the same
because the records show that they have habitually engaged in leasing said properties whose yearly
gross rentals exceeds P3,000.00 a year.

3. Estanislao, Jr. v. Court of Appeals G.R. No. L-49982

Facts: Petitioner and private respondents are brothers and sisters who are co-owners of certain lots
which were then being leased to the Shell Company of the Philippines Limited (SHELL). They agreed
to open and operate a gas station thereat to be known as Estanislao Shell Service Station with an
initial investment of P 15,000.00 to be taken from the advance rentals due to them from SHELL. They
agreed to help their brother, petitioner herein, by allowing him to operate and manage the gasoline
service station of the family. They negotiated with SHELL. It was agreed that petitioner would apply
for the dealership. Respondent Remedios helped in managing the business with petitioner. Later the
parties herein entered into an Additional Cash Pledge Agreement with SHELL wherein it was
reiterated that the P 15,000.00 advance rental shall be deposited with SHELL to cover advances of
fuel to petitioner as dealer with a proviso that said agreement cancels and supersedes the Joint
Affidavit executed by the co-owners. For sometime, the petitioner submitted financial statements
regarding the operation of the business to private respondents, but therafter petitioner failed to render
subsequent accounting. Private respondents filed a complaint in the Court of First Instance of Rizal
against petitioner praying among others that the latter be ordered: (1) to execute a public document
embodying all the provisions of the partnership agreement entered into between plaintiffs and
defendant as provided in Article 1771 of the New Civil Code; (2) to render a formal accounting of the
business operation up to the time the order is issued and that the same be subject to proper audit; (3)
to pay the plaintiffs their lawful shares and participation in the net profits of the business. The trial
court dismissed the complaint. Private respondents moved for reconsideration. The dismissal was set
aside and the trial court rendered in their favor. Petitioner appealed, the appellate court affirmed in
toto the decision of the trial court and denied the subsequent motion for reconsideration. Hence, this
petition for certiorari. Petitioner argued that because of the said stipulation cancelling and
superseding that previous Joint Affidavit, whatever partnership agreement there was in said previous
agreement had thereby been abrogated. Issue(s): Whether or not a partnership exists between
members of the same family arising from their joint ownership of certain properties Held: We find no
merit in [petitioners] argument. Said cancelling provision was necessary for the Joint Affidavit speaks
of P 15,000.00 advance rentals starting May 25, 1966 while the latter agreement also refers to
advance rentals of the same amount starting May 24, 1966. There is, therefore, a duplication of
reference to the P 15,000.00 hence the need to provide in the subsequent document that it "cancels
and supersedes" the previous one. True it is that in the latter document, it is silent as to the statement
in the Joint Affidavit that the P 15,000.00 represents the "capital investment" of the parties in the
gasoline station business and it speaks of petitioner as the sole dealer, but this is as it should be for in
the latter document SHELL was a signatory and it would be against its policy if in the agreement it
should be stated that the business is a partnership with private respondents and not a sole
proprietorship of petitioner. Moreover other evidence in the record shows that there was in fact such
partnership agreement between the parties. This is attested by the testimonies of private respondent
Remedies Estanislao and Atty. Angeles. Petitioner submitted to private respondents periodic
accounting of the business. Petitioner gave a written authority to private respondent Remedies
Estanislao, his sister, to examine and audit the books of their common business (amingnegosyo).
Respondent Remedios assisted in the running of the business. There is no doubt that the parties
hereto formed a partnership when they bound themselves to contribute money to a common fund with

the intention of dividing the profits among themselves. The sole dealership by the petitioner and the
issuance of all government permits and licenses in the name of petitioner was in compliance with the
afore-stated policy of SHELL and the understanding of the parties of having only one dealer of the
SHELL products.
4.
HEIRS OF JOSE LIM, represented by ELENITO LIM vs. JULIET VILLA LIM G.R. No. 172690,
March 3, 2010 NACHURA, J.:
FACTS: Petitioners are the heirs of the late Jose Lim (Jose). They filed a Complaint for Partition,
Accounting and Damages against respondent Juliet Villa Lim (respondent), widow of the late Elfledo
Lim (Elfledo), who was the eldest son of Jose and Cresencia. Petitioners alleged that Jose was the
liaison officer of Interwood Sawmill in Cagsiay, Mauban, Quezon. Sometime in 1980, Jose, together
with his friends Jimmy Yu (Jimmy) and Norberto Uy (Norberto), formed a partnership to engage in the
trucking business. Initially, with a contribution of P50,000.00 each, they purchased a truck to be used
in the hauling and transport of lumber of the sawmill. Jose managed the operations of this trucking
business until his death on August 15, 1981. Thereafter, Jose's heirs, including Elfledo, and partners
agreed to continue the business under the management of Elfledo. The shares in the partnership
profits and income that formed part of the estate of Jose were held in trust by Elfledo, with petitioners'
authority for Elfledo to use, purchase or acquire properties using said funds. Petitioners alleged that
Elfledo was never a partner or an investor in the business and merely supervised the purchase of
additional trucks using the income from the trucking business of the partners. On May 18, 1995,
Elfledo died, leaving respondent as his sole surviving heir. Petitioners claimed that respondent took
over the administration of the aforementioned properties, which belonged to the estate of Jose,
without their consent and approval. Claiming that they are co-owners of the properties, mpetitioners
required respondent to submit an accounting of all income, profits and rentals received from the
estate of Elfledo, and to surrender the administration thereof. Respondent refused; thus, the filing of
this case. Respondent traversed petitioners' allegations and claimed that Elfledo was himself a
partner of Norberto and Jimmy. Respondent also alleged that when Jose died in 1981, he left no
known assets, and the partnership with Jimmy and Norberto ceased upon his demise. Respondent
also stressed that Jose left no properties that Elfledo could have held in trust. Respondent maintained
that all the properties involved in this case were purchased and acquired through her and her
husbands joint efforts and hard work, and without any participation or contribution from petitioners or
from Jose. ISSUE: Whether or not a partnership exists. HELD: YES. A partnership exists when two or
more persons agree to place their money, effects, labor, and skill in lawful commerce or business,
with the understanding that there shall be a proportionate sharing of the profits and losses among
them. A contract of partnership is defined by the Civil Code as one where two or more persons bind
themselves to contribute money, property, or industry to a common fund, with the intention of dividing
the profits among themselves. The following circumstances tend to prove that Elfledo was himself the
partner of Jimmy and Norberto: 1) Cresencia testified that Jose gave Elfledo P50,000.00, as share in
the partnership, on a date that coincided with the payment of the minitial capital in the partnership; (2)
Elfledo ran the affairs of the partnership, wielding absolute control, power and authority, without any
intervention or opposition whatsoever from any of petitioners herein; (3) all of the properties were
registered in the name of Elfledo; (4) Jimmy testified that Elfledo did not receive wages or salaries
from the partnership, indicating that what he actually received were shares of the profits of the
business; and (5) none of the petitioners, as heirs of Jose, the alleged partner, demanded periodic
accounting from Elfledo during his lifetime.

5. Sevilla v. CA (REG) 1998

FACTS: Tourist World Service, Inc. (TWS) leased the premises belonging to Noguera for the formers
use as a branch office. Petitioner Sevilla held herself solidarily liable with the party of the part for the
prompt payment of the monthly rental. When the branch office was opened, it was run by Sevilla
payable to TWS by any airline. For any fare brought in on the efforts of Sevilla, 4% was to go to
LinaSevilla and 3% was to be withheld by the TWS Sevilla was paid no salaries. She even shared in
the
expenses of maintaining theoffice,
paid for thesalary of an office secretary and other sundryexpenses.
Later Tourist World considered closing down itsoffice because of business losses
and news that
Sevilla was then connected with a rival firm. Thus,an employee of TWS went to the branch and
padlocked its premises. Sevilla filed a complaint claiming damages brought about by TWSs
revocation of their relationship.
ISSUE:
1) WON Sevilla was just an employee of TWS, and as such was bound by the acts of her
employer. (NO)
2) WON Sevilla was an agent of TWS and thus entitled to damages because TWS revoked such
relationship. (YES)
HELD:1. Sevilla was not subject to control by the private respondent TWS either as to the
result of the enterprise or as to the means used in connection therewith.
Under the contract of lease covering thetourist Worlds Ermita office, she had boundherself in Solidum
as and for rental payments. A true employee cannot be made to part with his own money in
pursuance of his employer's business, or otherwise, assume any liability thereof.
- Sevilla was not under the control of TWS "as to the means used." Sevilla in pursuing the business,
obviously relied on her own gifts and capabilities
.- She was not in the company's payroll. For her efforts, she retained 4% in commissions from airline
bookings, the remaining 3% going to Tourist World. Unlike an employee then, who earns a fixed
salary usually, she earned compensation in fluctuating amounts depending on her booking
successes.
2. Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist
World Service, Inc. As compensation, she received 4% of the proceeds in the concept
of commissions.
- An agency that has been created for mutual interest, of the agent and the principal cannot be
revoked at will. Sevilla is a bona fide travel agent herself, and as such, she had acquired an interest
in the business entrusted to her. Moreover, she
had
assumed
a
personal
obligation for the operation thereof, holding herself solidarily liable for the payment of rentals. She
continued the business, using her own name, after Tourist World had stopped further operations.
Her interest, obviously, is not to the commissions she earned as a result of her business
transactions, but one that extends to the very subject matter of the power of management
delegated to her.
6.
TORRES v. COURT OF APPEALS G.R. No. 134559 December 9, 1999
Facts: Sisters Antonia Torres and Emeteria Baring, herein petitioners, entered into a joint venture
agreement with Respondent Manuel Torres for the development of a parcel of land into a subdivision.
Pursuant to the contract, they executed a Deed of Sale covering the said parcel of land in favor of
respondent, who then had it registered in his name. By mortgaging the property, respondent obtained
from Equitable Bank a loan of P40,000 which, under the Joint Venture Agreement, was to be used for
the development of the subdivision. All three of them also agreed to share the proceeds from the sale

of the subdivided lots. The project did not push through, and the land was subsequently foreclosed by
the bank Issue: Whether or not there was a contract of partnership YES Ratio: Under the
Agreement, petitioners would contribute property to the partnership in the form of land which was to
be developed into a subdivision; while respondent would give, in addition to his industry, the amount
needed for general expenses and other costs. Furthermore, the income from the said project would
be divided according to the stipulated percentage. Clearly, the contract manifested the intention of the
parties to form a partnership. Petitioners also contend that the Joint Venture Agreement is void under
Article 1422 of the Civil Code, because it is the direct result of an earlier illegal contract, which was for
the sale of the land without valid consideration. This argument is puerile. The Joint Venture
Agreement clearly states that the consideration for the sale was the expectation of profits from the
subdivision project. Its first stipulation states that petitioners did not actually receive payment for the
parcel of land sold to respondent. Consideration, more properly denominated as cause, can take
different forms, such as the prestation or promise of a thing or service by another.

7.
Sardane vs. CA Acojedo
GRN- L 47045 November 22, 1980
Regalads, J
Facts:
Sardane executed promissory notes in the amount of P 5, 217.25 because of failure to pay; acojedo
brought an action for collection of sum of money. MTC granted the petition but RTC reversed
upholding reason that the existed partnership between the 2, which could them vary the meaning of
the promissory notes. RTC concluded the PN involved were merely receipts for the contributions to
said partnership and upheld the claim that there was ambiguity in the PN hence; parol evidence was
allowable to contradict the terms of the represented loan contract.

Issue:
Whether or not partnership exited
Ruling:
Even if evidence other that PN may be admitted to alter the meaning conveyed thereby, still the
evidence is insufficient to prove that a partnership existed between the private parties. In the fact that
he had received 50% of the net profits does not conclusively establish that he was a partner of
acojeda. Article 1769 NCC explicitly provides that the receipts of the person of a share of the profits of
a business is a prima farcies evidence that he is a partner in the business, no such profits were
received in payment as wages of an employee.
Ruling:
A principal may withdraw the authority given to an agent at will .But respondents agreed to cancel the
written authority given to them upon assurance by petition that should property be sold to Noche, they
would be given commission.

That petitioner had changed her mind even if respondents had found a buyer who was willing to close
the deal, is a matter that would not give rise to a legal consequences if respondents agree to call off
to transaction in difference to the request of the of the petitioner. Petitioner took advantage of the
services of respondent. But believing that she could evade payment of their commission, she induced

them to sign the deed of cancellation. This act of submission cannot serve as basis for petitioner to
escape payment of the commission agreed upon.

________________________________________________________________________________
_________
8.
AURBACH v SANITARY WARES

Facts: This consolidated petition assailed the decision of the CA directing a certain MANNER OF
ELECTION OF OFFICERS IN THE BOARD OF DIRECTORS
*There are two groups in this case, the Lagdameo group composed of Filipino investors and the
American Standard Inc. (ASI) composed of foreign investors.
The ASI Group and petitioner Salazar contend that the actual intention of the parties should be
viewed strictly on the "Agreement" wherein it is clearly stated that the parties' intention was to form a
corporation and not a joint venture.

Issue: The main issue hinges on who were the duly elected directors of Saniwares for the year 1983
during its annual stockholders' meeting held on March 8, 1983. To answer this question the following
factors should be determined:
*(1) the nature of the business established by the parties whether it was a joint venture or a
corporation.

Ruling:The SC ruled that thenature of the business established by the parties was a joint venture and
neither a corporation nor a partnership. Joint venture has no precise legal definition. However, the
main distinction cited by most opinions in common law jurisdictions is that the partnership
contemplates a general business with some degree of continuity, while the joint venture is formed for
the execution of a single transaction, and is thus of a temporary nature.

________________________________________________________________________________
_______________

9. TOCAO V. COURT OF APPEALS

342 SCRA 20 (2000)
Facts: Petitioner William T. Bello introduced private respondent NenitaAnay to petitioner
Tocao, who conveyed her desire to enter into a joint venture with her for the importation
and local distribution of kitchen cookwares. Belo acted the capitalist, Tocao as president
and general manager, and Anay as head of the marketing department (considering her
experience and
established relationship with West Bend Company,c a manufacturer of kitchen wares in
Wisconsin, U.S.A) and later, vice-president for sales. The parties agreed further that
Anay
would be entitled to: (1) ten percent (10%) of the annual net profits of the business; (2)
overriding commission of six percent (6%) of the overall weekly production; (3) thirty
percent (30%) of the sales she would make; and (4) two percent (2%) for her
demonstration services. The same was not reduced to writing on the strength of Belos
assurances. Later, Anay was able to secure the distributorship of cookware products
from the West Bend Company. They operated under the name of Geminesse
Enterprise, a sole proprietorship registered in Marjorie Tocaos name. Anay attended
distributor/dealer meetings with West Bend Company with the consent of Tocao.
Due to Anays excellent job performance she was given a plaque of appreciation. Also,
in a memo signed by Belo, Anay was given 37% commission for her personal sales "up
Dec
31/87, apart from the 10% share in profits. On October 9, 1987, Anay learned that
Marjorie Tocao terminated her as vice-president of Geminesse Enterprise. Anay
attempted to contact Belo. She wrote him twice to demand her overriding commission
for the period of January
8, 1988 to February 5, 1988 and the audit of the company to determine her share in the
net profits. Belo did not answer. Anay still received her five percent (5%) overriding
commission up to December 1987. The following year, 1988, she did not receive the
same commission although the company netted a gross sales of P13,300,360.00. On
April 5, 1988, Nenita A. Anay filed a complaint for sum of money with damages against
Tocao and Belo before the RTC
of Makati. She prayed that she be paid (1) P32,00.00 as unpaid overriding commission
from January 8, 1988 to February 5, 1988; (2) P100,000.00 as moral damages, and (3)
P100,000.00

as exemplary damages. The plaintiff also prayed for an audit of the finances of
Geminesse Enterprise from the inception of its business operation until she was
illegally dismissed to determine her ten percent (10%) share in the net profits. She
further prayed that she be paid the five percent (5%) overriding commission on the
remaining 150 West Bend cookware sets before her dismissal. However, Tocao and
Belo asserted that the alleged agreement was not reduced to writing nor ratified, hence,
unenforceable,
void, or nonexistent. Also, they denied the existence of a partnership because, as
Anayherself admitted, Geminesse Enterprise was the sole proprietorship of Marjorie
Tocao. Belo also contended that he merely acted as a guarantor of Tocao and denied
contributing capital. Tocao, on the other hand, denied that they agreed on a ten percent
(10%) commission on
the net profits. Both trial court and court of appeals ruled that a business partnership
existed and ordered the defendants to pay.
Issue: Whether or not a partnership existed YES
Ratio: To be considered a juridical personality, a partnership must fulfill these requisites:
(1) two or more persons bind themselves to contribute money, property or industry to a
common fund; and (2) intention on the part of the partners to divide the profits among
themselves. It may be constituted in any form; a public instrument is necessary only
where immovable property or real rights are contributed thereto. This implies that since
a contract of partnership is consensual, an
oral contract of partnership is as good as a written one. Private respondent Anay
contributed her expertise in the business of distributorship of cookware to the
partnership and hence, under the law, she was the industrial or managing partner.
Petitioner Belo had an proprietary interest. He presided over meetings regarding
matters affecting the operation of the business. Moreover, his having authorized in
writing giving Anay 37% of the proceeds of her personal sales, could not be interpreted
otherwise than that he had a proprietary interest in the business. This is inconsistent
with his claim that he merely acted as a guarantor. If indeed he was, he should have
presented documentary evidence. Also, Art. 2055 requires that a guaranty must be
express and the Statute of Frauds requires that it must be in writing. Petitioner Tocao
was also a capitalist in the partnership. She claimed that she herself financed the
business. The business venture operated under Geminesse Enterprise did not result in
an employer-employee relationship between petitioners and private respondent. First,
Anay had a voice in the management of the affairs of the cookware distributorship and
second, Tocao admitted that Anay, like her, received only commissions and
transportation and representation allowances

and not a fixed salary. If Anay was an employee, it is difficult to believe that they recieve
the same income. Also, the fact that they operated under the name of Geminesseharlie
Mendoza 1 BATCH 1 TOCAO V. COURT OF APPEALS 342 SCRA 20 (2000) Facts:
Petitioner William T. Bello introduced private respondent NenitaAnay to petitioner Tocao,
who conveyed her desire to enter into a joint venture with her for the importation and
local distribution of kitchen cookwares. Belo acted the capitalist, Tocao as president and
general manager, and Anay as head of the marketing department (considering her
experience and established relationship with West Bend Company,c a manufacturer of
kitchen wares in Wisconsin, U.S.A) and later, vice-president for sales. The parties
agreed further that Anay would be entitled to: (1) ten percent (10%) of the annual net
profits of the business; (2) overriding commission of six percent (6%) of the overall
weekly production; (3) thirty percent (30%) of the sales she would make; and (4) two
percent (2%) for her demonstration services. The same was not reduced to writing on
the strength of Belos assurances. Later, Anay was able to secure the distributorship of
cookware products from the West Bend Company. They operated under the name of
Geminesse Enterprise, a sole proprietorship registered in Marjorie Tocaos name. Anay
attended distributor/dealer meetings with West Bend Company with the consent of
Tocao. Due to Anays excellent job performance she was given a plaque of appreciation.
Also, in a memo signed by Belo, Anay was given 37% commission for her personal
sales "up Dec 31/87, apart from the 10% share in profits. On October 9, 1987, Anay
learned that Marjorie Tocao terminated her as vice-president of Geminesse Enterprise.
Anay attempted to contact Belo. She wrote him twice to demand her overriding
commission for the period of January 8, 1988 to February 5, 1988 and the audit of the
company to determine her share in the net profits. Belo did not answer. Anay still
received her five percent (5%) overriding commission up to December 1987. The
following year, 1988, she did not receive the same commission although the company
netted a gross sales of P13,300,360.00. On April 5, 1988, Nenita A. Anay filed a
complaint for sum of money with damages against Tocao and Belo before the RTC of
Makati. She prayed that she be paid (1) P32,00.00 as unpaid overriding commission
from January 8, 1988 to February 5, 1988; (2) P100,000.00 as moral damages, and (3)
P100,000.00 as exemplary damages. The plaintiff also prayed for an audit of the
finances of Geminesse Enterprise from the inception of its business operation until she
was illegally dismissed to determine her ten percent (10%) share in the net profits.
She further prayed that she be paid the five percent (5%) overriding commission on
the remaining 150 West Bend cookware sets before her dismissal. However, Tocao
and Belo asserted that the alleged agreement was not reduced to writing nor ratified,
hence, unenforceable, void, or nonexistent. Also, they denied the existence of a
partnership because, as Anay herself admitted, Geminesse Enterprise was the sole
proprietorship of Marjorie Tocao. Belo also contended that he merely acted as a
guarantor of Tocao and denied contributing capital. Tocao, on the other hand, denied
that they agreed on a ten percent (10%) commission on the net profits. Both trial court

and court of appeals ruled that a business partnership existed and ordered the
defendants to pay. Issue: Whether or not a partnership existed YES Ratio: To be
considered a juridical personality, a partnership must fulfill these requisites: (1) two or
more persons bind themselves to contribute money, property or industry to a common
fund; and (2) intention on the part of the partners to divide the profits among
themselves. It may be constituted in any form; a public instrument is necessary only
where immovable property or real rights are contributed thereto. This implies that since
a contract of partnership is consensual, an oral contract of partnership is as good as a
written one. Private respondent Anay contributed her expertise in the business of
distributorship of cookware to the partnership and hence, under the law, she was the
industrial or managing partner. Petitioner Belo had an proprietary interest. He presided
over meetings regarding matters affecting the operation of the business. Moreover, his
having authorized in writing giving Anay 37% of the proceeds of her personal sales,
could not be interpreted otherwise than that he had a proprietary interest in the
business. This is inconsistent with his claim that he merely acted as a guarantor. If
indeed he was, he should have presented documentary evidence. Also, Art. 2055
requires that a guaranty must be express and the Statute of Frauds requires that it must
be in writing. Petitioner Tocao was also a capitalist in the partnership. She claimed that
she herself financed the business. The business venture operated under Geminesse
Enterprise did not result in an employer-employee relationship between petitioners and
private respondent. First, Anay had a voice in the management of the affairs of the
cookware distributorship and second, Tocao admitted that Anay, like her, received only
commissions and transportation and representation allowances and not a fixed salary. If
Anay was an employee, it is difficult to believe that they recieve the same income. Also,
the fact that they operated under the name of Geminesse BUSORG CASE DIGESTS
Atty. Charlie Mendoza 2 Enterprise, a sole proprietorship, is of no moment. Said
business name was used only for practical reasons - it was utilized as the common
name for petitioner Tocaos various business activities, which included the
distributorship of cookware. The partnership exists until dissolved under the law. Since
the partnership created by petitioners and private respondent has no fixed term and is
therefore a partnership at will predicated on their mutual desire and consent, it may be
dissolved by the will of a partner. Petitioners Tocaos unilateral exclusion of private
respondent from the partnership is shown by her memo to the Cubao office plainly
stating that private respondent was, as of October 9, 1987, no longer the vice-president
for sales of Geminesse Enterprise. By that memo, petitioner Tocaoeffected her own
withdrawal from the partnership and considered herself as having ceased to be
associated with the partnership in the carrying on of the business. Nevertheless, the
partnership was not terminated thereby; it continues until the winding up of the
business. The partnership among petitioners and private respondent is ordered
dissolved, and the parties are ordered to effect the winding up and liquidation of the
partnership pursuant to the pertinent provisions of the Civil Code. Petitioners are

ordered to pay Anays 10% share in the profits, after accounting, 5% overriding
commission for the 150 cookware sets available for disposition since the time private
respondent was wrongfully excluded from the partnership by petitioner, overriding
commission on the total production, as well as moral and exemplary damages, and
attorneys fees.

AGUILA, JR. v. COURT OF APPEALS 316 SCRA 246 (1999)

Facts:
Alfredo N. Aguilar, Jr. (petitioner) is the manager of A.C. Aguila& Sons,
Co., a partnership engaged in lending activities. Felicidad S. Vda. deAbrogar (private
respondent) and her late husband, Ruben M. Abrogar, were the registered owners of a
house and lot, covered by Transfer Certificate of Title No. 195101, in Marikina, Metro
Manila. On April 18, 1991, private respondent, with the consent of her late husband, and
A.C. Aguila& Sons, Co., represented by petitioner, entered into a Memorandum of
Agreement which provided that A.C. Aguila& Sons, Co. shall buy the property from
private respondent for P200,000 subject to an option to repurchase for P230,000 (valid
for 90 days), etc. On the same day, the parties likewise executed a deed of absolute
sale, dated June 11, 1991, wherein private respondent, with the consent of her late
husband, sold the subject property to A.C. Aguila& Sons, Co., represented by petitioner,
for P200,000,00. In a special power of attorney dated the same day, April 18, 1991,
private respondent authorized petitionerto cause the cancellation of TCT No. 195101
and the issuance of a new certificate of title in the name of A.C. Aguila and Sons, Co., in
the event she failed to redeem the subject property as provided in the Memorandum of
Agreement. Private respondent failed to redeem the property. Pursuant to the special
power of attorney mentioned above, petitioner caused the cancellation of TCT No.
195101 and the issuance of a new certificate of title in the name of A.C. Aguila and
Sons, Co. Private respondent then received a letter dated August 10, 1991 from Atty.
Lamberto C. Nanquil, counsel for A.C. Aguila& Sons, Co., demanding that she vacate
the premises within 15 days after receipt of the letter and surrender its possession
peacefully to A.C. Aguila& Sons, Co. Otherwise, the latter would bring the appropriate
action in court. Upon the refusal of private respondent to vacate the subject premises,
A.C. Aguila& Sons, Co. filed an ejectment case against her in the Metropolitan Trial
Court, Branch 76, Marikina, Metro Manila. MeTC, Marikina, MM (April 3, 1992): Ruled in
favor of A.C. Aguila& Sons, Co. Private respondent appealed to RTC Pasig, CA, and
then SC but she still lost. Private respondent then filed a petition for declaration of nullity
of a deed of sale filed by Felicidad S. Vda. deAbrogar against Alfredo N. Aguila, Jr. She
alleged that the signature of her husband on the deed of sale was a forgery because he
was already dead when the deed was supposed to have been executed on June 11,
1991. RTC,Marikina,MM(April11,1995):Dismissed. CA(November29,1990):Reversed
ruling of the RTC. Hence, this petition for review on certiorari. Petitioner now contends

that: (1) he is not the real party in interest but A.C. Aguila& Co., against which this case
should have been brought; (2) the judgment in the ejectment case is a bar to the filing of
the complaint for declaration of nullity of a deed of sale in this case; and (3) the contract
between A.C. Aguila& Sons, Co. and private respondent is a pacto de retro sale and not
an equitable mortgage as held by the appellate court.
Issue: Whether the real party in interest is A.C. Aguila& Co. and not petitioner. YES
Ratio: Under Art. 1768 of the Civil Code, a partnership "has a juridical personality
separate and distinct from that of each of the partners." The partners cannot be held
liable for the obligations of the partnership unless it is shown that the legal fiction of a
different juridical personality is being used for fraudulent, unfair, or illegal purposes. In
this case, private respondent has not shown that A.C. Aguila& Sons, Co., as a separate
juridical entity, is being used for fraudulent, unfair, or illegal purposes. Moreover, the title
to the subject property is in the name of A.C. Aguila& Sons, Co. and the Memorandum
of Agreement was executed between private respondent, with the consent of her late
husband, and A.C. Aguila& Sons, Co., represented by petitioner. Hence, it is the
partnership, not its officers or agents, which should be impleaded in any litigation
involving property registered in its name. A violation of this rule will result in the
dismissal of the complaint.

Aurelio LitonjuaJrvs Eduardo Litonjua Sr. et al

Facts: Aurelio and Eduardo are brothers. In 1973, Aurelio alleged that Eduardo entered
into a contract of partnership with him. Aurelio showed as evidence a letter sent to him
by Eduardo that the latter is allowing Aurelio to manage their family business (if
Eduardos away) and in exchange thereof he will be giving Aurelio P1 million or 10%
equity, whichever is higher. A memorandum was subsequently made for the said
partnership agreement. The memorandum this time stated that in exchange of Aurelio,
who just got married, retaining his share in the family business (movie theatres,
shipping and land development) and some other immovable properties, he will be given
P1 Million or 10% equity in all these businesses and those to be subsequently acquired
by them whichever is greater. In 1992 however, the relationship between the brothers
went sour. And so Aurelio demanded an accounting and the liquidation of his share in
the partnership. Eduardo did not heed and so Aurelio sued Eduardo.
ISSUE: Whether or not there exists a partnership.
HELD: No. The partnership is void and legally nonexistent. The documentary evidence
presented by Aurelio, i.e. the letter from Eduardo and the Memorandum, did not prove

partnership. The 1973 letter from Eduardo on its face, contains typewritten entries,
personal in tone, but is unsigned and undated. As an unsigned document, there can be
no quibbling that said letter does not meet the public instrumentation requirements
exacted under Article 1771 (how partnership is constituted) of the Civil Code. Moreover,
being unsigned and doubtless referring to a partnership involving more than P3,000.00
in money or property, said letter cannot be presented for notarization, let alone
registered with the Securities and Exchange Commission (SEC), as called for under the
Article 1772 (capitalization of a partnership) of the Code. And inasmuch as the inventory
requirement under the succeeding Article 1773 goes into the matter of validity when
immovable property is contributed to the partnership, the next logical point of inquiry
turns on the nature of Aurelios contribution, if any, to the supposed partnership. The
Memorandum is also not a proof of the partnership for the same is not a public
instrument and again, no inventory was made of the immovable property and no
inventory was attached to the Memorandum. Article 1773 of the Civil Code requires that
if immovable property is contributed to the partnership an inventory shall be had and
attached to the contract.