12/10/2016 G.R.No.

154486

RepublicofthePhilippines
SupremeCourt
Manila
FIRSTDIVISION


FEDERICOJARANTILLA,JR., G.R.No.154486
Petitioner,
Present:

versus CORONA,C.J.,
Chairperson,
LEONARDODECASTRO,
ANTONIETA JARANTILLA, PERALTA,*
BUENAVENTURA REMOTIGUE,
SUBSTITUTED BY CYNTHIA ABAD,**and
REMOTIGUE, DOROTEO PEREZ,JJ.
JARANTILLA and TOMAS
JARANTILLA, Promulgated:
Respondents.
December1,2010
xx


DECISION


LEONARDODECASTRO,J.:

[1] [2]
This petition for review on certiorari seeks to modify the Decision of the Court of
[3]
Appeals dated July 30, 2002 in CAG.R. CV No. 40887, which set aside the Decision dated
December18,1992oftheRegionalTrialCourt(RTC)ofQuezonCity,Branch98inCivilCaseNo.
Q50464.

Thepertinentfactsareasfollows:

The spouses Andres Jarantilla and Felisa Jaleco were survived by eight children: Federico,
[4]
Delfin,Benjamin,Conchita,Rosita,Pacita,RafaelandAntonieta. PetitionerFedericoJarantilla,Jr.

isthegrandchildofthelateJarantillaspousesbytheirsonFedericoJarantilla,Sr.andhiswifeLeda
[5]
Jamili. Petitioneralsohastwootherbrothers:DoroteoandTomasJarantilla.
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 1/15
 [5]
12/10/2016 G.R.No.154486
Jamili. Petitioneralsohastwootherbrothers:DoroteoandTomasJarantilla.

Petitioner was one of the defendants in the complaint before the RTC while Antonieta
Jarantilla,hisaunt,wastheplaintifftherein.HiscorespondentsbeforehejoinedhisauntAntonietain
her complaint, were his late aunt Conchita Jarantillas husband Buenaventura Remotigue, who died
during the pendency of the case, his cousin Cynthia Remotigue, the adopted daughter of Conchita
[6]
JarantillaandBuenaventuraRemotigue,andhisbrothersDoroteoandTomasJarantilla.

In1948,theJarantillaheirsextrajudiciallypartitionedamongstthemselvestherealproperties
[7]
oftheirdeceasedparents. WiththeexceptionoftherealpropertyadjudicatedtoPacitaJarantilla,
theheirsalsoagreedtoallottheproduceofthesaidrealpropertiesfortheyears19471949forthe
[8]
studiesofRafaelandAntonietaJarantilla.

In the same year, the spouses Rosita Jarantilla and Vivencio Deocampo entered into an
agreement with the spouses Buenaventura Remotigue and Conchita Jarantilla to provide mutual
assistancetoeachotherbywayoffinancialsupporttoanycommercialandagriculturalactivityona
jointbusinessarrangement. This business relationship proved to be successful as they were able to
establish a manufacturing and trading business, acquire real properties, and construct buildings,
[9] [10]
among other things. This partnership ended in 1973 when the parties, in an Agreement,
[11]
voluntarilyagreedtocompletelydissolvetheirjointbusinessrelationship/arrangement.

OnApril29,1957,thespousesBuenaventuraandConchitaRemotigueexecutedadocument
whereintheyacknowledgedthatwhileregisteredonlyinBuenaventuraRemotiguesname,theywere
not the only owners of the capital of the businesses Manila Athletic Supply (712 Raon Street,
Manila),RemotigueTrading(CalleReal,IloiloCity)andRemotigueTrading(CotabatoCity).Inthis
same Acknowledgement of Participating Capital, they stated the participating capital of their co
ownersasoftheyear1952,withAntonietaJarantillasstatedaseightthousandpesos(P8,000.00)and
[12]
FedericoJarantilla,Jr.sasfivethousandpesos(P5,000.00).

[13]
The present case stems from the amended complaint dated April 22, 1987 filed by
Antonieta Jarantilla against Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr.,

Doroteo Jarantilla and Tomas Jarantilla, for the accounting of the assets and income of the co
ownership,foritspartitionandthedeliveryofhersharecorrespondingtoeightpercent(8%),andfor
damages. Antonieta claimed that in 1946, she had entered into an agreement with Conchita and
Buenaventura Remotigue, Rafael Jarantilla, and Rosita and Vivencio Deocampo to engage in
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 2/15
12/10/2016
Buenaventura Remotigue, Rafael Jarantilla, and G.R.No.154486
Rosita and Vivencio Deocampo to engage in
business.Antonietaallegedthattheinitialcontributionofpropertyandmoneycamefromtheheirs
inheritance,andhersubsequentannualinvestmentofseventhousandfivehundredpesos(P7,500.00)
asadditionalcapitalcamefromtheproceedsofherfarm.Antonietaalsoallegedthatfrom19461969,
shehadhelpedinthemanagementofthebusinesstheycoownedwithoutreceivinganysalary. Her
salarywassupposedlyrolledbackintothebusinessasadditionalinvestmentsinherbehalf.Antonieta
[14]
furtherclaimedcoownershipofcertainproperties (thesubjectrealproperties)inthenameofthe
defendantssincetheonlywaythedefendantscouldhavepurchasedthesepropertieswerethroughthe
partnershipastheyhadnoothersourceofincome.

[15]
The respondents, including petitioner herein, in their Answer, denied having formed a
partnershipwithAntonietain1946.Theyclaimedthatshewasinnopositiontodosoasshewasstill
inschoolatthattime.Infact,theproceedsofthelandstheypartitionedweredevotedtoherstudies.
TheyalsoaverredthatwhileshemayhavehelpedinthebusinessesthatheroldersisterConchitahad
formedwithBuenaventuraRemotigue,shewaspaidherduesalary.Theydidnotdenytheexistence
and validity of the Acknowledgement of Participating Capital and in fact used this as evidence to
supporttheirclaimthatAntonietas8%sharewaslimitedtothebusinessesenumeratedtherein.With
regard to Antonietas claim in their other corporations and businesses, the respondents said these
should also be limited to the number of her shares as specified in the respective articles of
incorporation. The respondents denied using the partnerships income to purchase the subject real
[16]
propertiesandsaidthatthecertificatesoftitleshouldbebindingonher.

DuringthecourseofthetrialattheRTC,petitionerFedericoJarantilla,Jr.,whowasoneofthe
[17]
original defendants, entered into a compromise agreement with Antonieta Jarantilla wherein he
supportedAntonietasclaimsandassertedthathetoowasentitledtosixpercent(6%)ofthesupposed
partnershipinthesamemannerasAntonietawas.Heprayedforafavorablejudgmentinthiswise:

Defendant Federico Jarantilla, Jr., hereby joins in plaintiffs prayer for an accounting from the
otherdefendants,andthepartitionofthepropertiesofthecoownershipandthedeliverytotheplaintiff
and to defendant Federico Jarantilla, Jr. of their rightful share of the assets and properties in the co
[18]
ownership.

[19]
The RTC, in an Order dated March 25, 1992, approved the Joint Motion to Approve
[20]
CompromiseAgreement andonDecember18,1992,decidedinfavorofAntonieta,towit:

WHEREFORE,premisesaboveconsidered,theCourtrendersjudgmentinfavoroftheplaintiff
AntonietaJarantillaandagainstdefendantsCynthiaRemotigue,DoroteoJarantillaandTomasJarantilla
orderingthelatter:
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 3/15
12/10/2016 G.R.No.154486
orderingthelatter:

1. to deliver to the plaintiff her 8% share or its equivalent amount on the real properties
covered by TCT Nos. 35655, 338398, 338399 & 335395, all of the Registry of Deeds of
Quezon City TCT Nos. (18303)23341, 142882 & 490007(4615), all of the Registry of
DeedsofRizalandTCTNo.T6309oftheRegistryofDeedsofCotabatobasedontheir
presentmarketvalue

2. todelivertotheplaintiffher8%shareoritsequivalentamountontheRemotigueAgro
Industrial Corporation, Manila Athletic Supply, Inc., MAS Rubber Products, Inc. and
BuendiaRecappingCorporationbasedonthesharesofstockspresentbookvalue

3.toaccountfortheassetsandincomeofthecoownershipanddelivertoplaintiffherrightful
sharethereofequivalentto8%

4.topayplaintiff,jointlyandseverally,thesumofP50,000.00asmoraldamages

5.topay,jointlyandseverally,thesumofP50,000.00asattorneysfeesand

[21]
6.topay,jointlyandseverally,thecostsofthesuit.


Both the petitioner and the respondents appealed this decision to the Court of Appeals. The
petitionerclaimedthattheRTCerredinnotrenderingacompletejudgmentandorderingthepartition
[22]
ofthecoownershipandgivingto[him]sixpercentum(6%)oftheproperties.

WhiletheCourtofAppealsagreedtosomeoftheRTCsfactualfindings,italsoestablishedthat
Antonieta Jarantilla was not part of the partnership formed in 1946, and that her 8% share was
limitedtothebusinessesenumeratedintheAcknowledgementofParticipatingCapital.OnJuly30,
2002,theCourtofAppealsrenderedthehereinchallengeddecisionsettingasidetheRTCsdecision,
asfollows:

WHEREFORE,thedecisionofthetrialcourt,dated18December1992isSETASIDEandanewone
isherebyenteredorderingthat:

(1) after accounting, plaintiff Antonieta Jarantilla be given her share of 8% in the assets and
profitsofManilaAthleticSupply,RemotigueTradinginIloiloCityandRemotigueTrading
inCotabatoCity

(2)afteraccounting,defendantFedericoJarantilla,Jr.begivenhisshareof6%oftheassetsand
profitsoftheabovementionedenterprisesand,holdingthat

(3) plaintiff Antonieta Jarantilla is a stockholder in the following corporations to the extent
statedintheirArticlesofIncorporation:

(a)RuralBankofBarotacNuevo,Inc.

(b)MASRubberProducts,Inc.

(c)ManilaAthleticSupply,Inc.and

(d)B.RemotigueAgroIndustrialDevelopmentCorp.

[23]
(4) Nocosts.
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 4/15
12/10/2016 G.R.No.154486
[23]
(4)Nocosts.


Therespondents,onAugust20,2002,filedaMotionforPartialReconsiderationbuttheCourt
[24]
ofAppealsdeniedthisinaResolution datedMarch21,2003.

[25]
AntonietaJarantillafiledbeforethisCourtherownpetitionforreviewoncertiorari dated
September 16, 2002, assailing the Court of Appeals decision on similar grounds and similar
[26]
assignmentsoferrorsasthispresentcase butitwasdismissedonNovember20,2002forfailure
tofiletheappealwithinthereglementaryperiodoffifteen(15)daysinaccordancewithSection2,
[27]
Rule45oftheRulesofCourt.

Petitionerfiledbeforeusthispetitionforreviewonthesolegroundthat:

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT RULING THAT
PETITIONERFEDERICOJARANTILLA,JR.ISENTITLEDTOASIXPERCENTUM(6%)
SHAREOFTHEOWNERSHIPOFTHEREALPROPERTIESACQUIREDBYTHEOTHER
DEFENDANTS USING COMMON FUNDS FROM THE BUSINESSES WHERE HE HAD
[28]
OWNEDSUCHSHARE.


Petitioner asserts that he was in a partnership with the Remotigue spouses, the Deocampo
spouses,RositaJarantilla,RafaelJarantilla,AntonietaJarantillaandQuintinVismanos,asevidenced
by the Acknowledgement of Participating Capital the Remotigue spouses executed in 1957. He
contends that from this partnership, several other corporations and businesses were established and
severalrealpropertieswereacquired.Inthispetition,heisessentiallyaskingforhis6%shareinthe
subjectrealproperties. He is relying on theAcknowledgement of Participating Capital, on his own
testimony,andAntonietaJarantillastestimonytosupportthiscontention.

The core issue is whether or not the partnership subject of the Acknowledgement of
ParticipatingCapitalfundedthesubjectrealproperties.Inotherwords,whatisthepetitionersright
overtheserealproperties?

ItisasettledrulethatinapetitionforreviewoncertiorariunderRule45oftheRulesofCivil
[29]
Procedure,onlyquestionsoflawmayberaisedbythepartiesandpasseduponbythisCourt.

A questionoflawarises when there is doubt as to what the law is on a certainstateoffacts,
whilethereisaquestionoffactwhenthedoubtarisesastothetruthorfalsityoftheallegedfacts.Fora
question to be one of law, the same must not involve an examination of the probative value of the
evidencepresentedbythelitigantsoranyofthem.Theresolutionoftheissuemustrestsolelyonwhat
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 5/15
12/10/2016 G.R.No.154486
evidencepresentedbythelitigantsoranyofthem.Theresolutionoftheissuemustrestsolelyonwhat
thelawprovidesonthegivensetofcircumstances.Onceitisclearthattheissueinvitesareviewofthe
evidencepresented,thequestionposedisoneoffact.Thus,thetestofwhetheraquestionisoneoflaw
oroffactisnottheappellationgiventosuchquestionbythepartyraisingthesamerather,itiswhether
the appellate court can determine the issue raised without reviewing or evaluating the evidence, in
[30]
whichcase,itisaquestionoflawotherwiseitisaquestionoffact.


SincetheCourtofAppealsdidnotfullyadoptthefactualfindingsoftheRTC,thisCourt,in
resolvingthequestionsoflawthatarenowinissue,shalllookintothefactsonlyinsofarasthetwo
courtsaquodifferedintheirappreciationthereof.

TheRTCfoundthatanunregisteredpartnershipexistedsince1946whichwasaffirmedinthe
1957 document, the Acknowledgement of Participating Capital. The RTC used this as its basis for
giving Antonieta Jarantilla an 8% share in the three businesses listed therein and in the other
businessesandrealpropertiesoftherespondentsastheyhadsupposedlyacquiredthesethroughfunds
[31]
fromthepartnership.

TheCourtofAppeals,ontheotherhand,agreedwiththeRTCastoAntonietas8%shareinthe
businessenumeratedintheAcknowledgementofParticipatingCapital,butnotastohershareinthe
other corporations and real properties. The Court of Appeals ruled that Antonietas claim of 8% is
based on the Acknowledgement of Participating Capital, a duly notarized document which was
specificastothesubjectofitscoverage.Hence,therewasnoreasontopatternhershareintheother
corporationsfromhershareinthepartnershipsbusinesses.The Court of Appeals also said that her
claimintherespondentsrealpropertieswasmoreprecariousasthesewereallcoveredbycertificates
[32]
oftitlewhichservedasthebestevidenceastoallthematterscontainedtherein. Sincepetitioners
claimwasessentiallythesameasAntonietas,theCourtofAppealsalsoruledthatpetitionerbegiven
his6%shareinthesamebusinesseslistedintheAcknowledgementofParticipatingCapital.

Factual findings of the trial court, when confirmed by the Court of Appeals, are final and
conclusiveexceptinthefollowingcases:(1)whentheinferencemadeismanifestlymistaken,absurd
orimpossible(2)whenthereisagraveabuseofdiscretion(3)whenthefindingisgroundedentirely
onspeculations,surmisesorconjectures(4)whenthejudgmentoftheCourtofAppealsisbasedon
misapprehension of facts (5) when the findings of fact are conflicting (6) when the Court of
Appeals,inmakingitsfindings,wentbeyondtheissuesofthecaseandthesameiscontrarytothe
admissionsofbothappellantandappellee(7)whenthefindingsoftheCourtofAppealsarecontrary
tothoseofthetrialcourt(8)whenthefindingsoffactareconclusionswithoutcitationofspecific
evidence on which they are based (9) when the Court of Appeals manifestly overlooked certain
relevantfactsnotdisputedbythepartiesandwhich,ifproperlyconsidered,wouldjustifyadifferent
conclusionand(10)whenthefindingsoffactoftheCourtofAppealsarepremisedontheabsenceof
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 6/15
12/10/2016 G.R.No.154486
conclusionand(10)whenthefindingsoffactoftheCourtofAppealsarepremisedontheabsenceof
[33]
evidenceandarecontradictedbytheevidenceonrecord.

Inthiscase,wefindnoerrorintherulingoftheCourtofAppeals.
BoththepetitionerandAntonietaJarantillacharacterizetheirrelationshipwiththerespondentsasa
coownership, but in the same breath, assert that a verbal partnership was formed in 1946 and was
affirmedinthe1957AcknowledgementofParticipatingCapital.

[34]
Thereisacoownershipwhenanundividedthingorrightbelongstodifferentpersons. Itis
apartnershipwhentwoormorepersonsbindthemselvestocontributemoney,property,orindustryto
[35]
a common fund, with the intention of dividing the profits among themselves. The Court, in
[36]
Pascualv.TheCommissionerofInternalRevenue, quotedtheconcurringopinionofMr. Justice
[37]
AngeloBautistainEvangelistav.TheCollectorofInternalRevenue to further elucidate on the
distinctionsbetweenacoownershipandapartnership,towit:

I wish however to make the following observation: Article 1769 of the new Civil Code lays
downtherulefordeterminingwhenatransactionshouldbedeemedapartnershiporacoownership.
Saidarticleparagraphs2and3,provides

(2) Coownership or copossession does not itself establish a partnership, whether such co
ownersorcopossessorsdoordonotshareanyprofitsmadebytheuseoftheproperty

(3) The sharing of gross returns does not of itself establish a partnership, whether or not the
personssharingthemhaveajointorcommonrightorinterestinanypropertyfromwhichthereturns
arederived

Fromtheaboveitappearsthatthefactthatthosewhoagreetoformacoownershipshareor
donotshareanyprofitsmadebytheuseofthepropertyheldincommondoesnotconverttheirventure
intoapartnership.Orthesharingofthegrossreturnsdoesnotofitselfestablishapartnershipwhether
ornotthepersonssharingthereinhaveajointorcommonrightorinterestintheproperty.Thisonly
means that, aside from the circumstance of profit, the presence of other elements constituting
partnership is necessary, such as the clear intent to form a partnership, the existence of a juridical
personality different from that of the individual partners, and the freedom to transfer or assign any
interestinthepropertybyonewiththeconsentoftheothers.

Itisevidentthatanisolatedtransactionwherebytwoormorepersonscontributefundstobuy
certainrealestateforprofitintheabsenceofothercircumstancesshowingacontraryintentioncannot
beconsideredapartnership.

Personswhocontributepropertyorfundsforacommonenterpriseandagreetosharethegross
returnsofthatenterpriseinproportiontotheircontribution,butwhoseverallyretainthetitletotheir
respectivecontribution,arenottherebyrenderedpartners.Theyhavenocommonstockorcapital,and
nocommunityofinterestasprincipalproprietorsinthebusinessitselfwhichtheproceedsderived.

A joint purchase of land, by two, does not constitute a copartnership in respect thereto nor
doesanagreementtosharetheprofitsandlossesonthesaleoflandcreateapartnershipthepartiesare
onlytenantsincommon.
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 7/15
12/10/2016 G.R.No.154486
onlytenantsincommon.

Where plaintiff, his brother, and another agreed to become owners of a single tract of realty,
holdingastenantsincommon,andtodividetheprofitsofdisposingofit,thebrotherandtheothernot
being entitled to share in plaintiffs commission, no partnership existed as between the three parties,
whatevertheirrelationmayhavebeenastothirdparties.

Inordertoconstituteapartnershipintersesetheremustbe:(a)Anintenttoformthesame(b)
generallyparticipatinginbothprofitsandlosses(c)andsuchacommunityofinterest,asfarasthird
personsareconcernedasenableseachpartytomakecontract,managethebusiness,anddisposeofthe
wholeproperty.xxx.
The common ownership of property does not itself create a partnership between the owners,
though they may use it for the purpose of making gains and they may, without becoming partners,
agree among themselves as to the management, and use of such property and the application of the
[38]
proceedstherefrom. (Citationsomitted.)


Under Article 1767 of the Civil Code, there are two essential elements in a contract of
partnership:(a)anagreementtocontributemoney,propertyorindustrytoacommonfundand(b)
intenttodividetheprofitsamongthecontractingparties.Thefirstelementisundoubtedlypresentin
thecaseatbar,for,admittedly,allthepartiesinthiscasehaveagreedto,anddid,contributemoney
andpropertytoacommonfund.Hence,theissuenarrowsdowntotheirintentinactingastheydid.
[39]
Itisnotdeniedthatallthepartiesinthiscasehaveagreedtocontributecapitaltoacommonfund
tobeabletolateronshareitsprofits.Theyhaveadmittedthisfact,agreedtoitsveracity,andeven
submittedonecommondocumentaryevidencetoprovesuchpartnershiptheAcknowledgementof
ParticipatingCapital.

AsthiscaserevolvesaroundthelegaleffectsoftheAcknowledgementofParticipatingCapital,
itwouldbeinstructivetoexaminethepertinentportionsofthisdocument:

ACKNOWLEDGEMENTOF
PARTICIPATINGCAPITAL

KNOWALLMENBYTHESEPRESENTS:

Thatwe,thespousesBuenaventuraRemotigueandConchitaJarantilladeRemotigue,bothoflegalage,
FilipinosandresidentsofLoyolaHeights,QuezonCity,P.I.herebystate:

ThattheManilaAthleticSupplyat712Raon,Manila,theRemotigueTradingofCalleReal,IloiloCity
and the Remotigue Trading, Cotabato Branch, Cotabato, P.I., all dealing in athletic goods and
equipments, and general merchandise are recorded in their respective books with Buenaventura
Remotigueastheregisteredownerandarebeingoperatedbythemassuch:

That they are not the only owners of the capital of the three establishments and their
participationinthecapitalofthethreeestablishmentstogetherwiththeothercoownersasoftheyear
1952arestatedasfollows:

1.BuenaventuraRemotigue(TWENTYFIVEP25,000.00
THOUSAND)
2.ConchitaJarantilladeRemotigue(TWENTYFIVE
THOUSAND)25,000.00
3.VicencioDeocampo(FIFTEENTHOUSAND)15,000.00
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 8/15
12/10/2016 G.R.No.154486

4.RositaJ.Deocampo(FIFTEENTHOUSAND)....15,000.00
5.AntonietaJarantilla(EIGHTTHOUSAND)..8,000.00
6.RafaelJarantilla(SIXTHOUSAND).....6,000.00
7.FedericoJarantilla,Jr.(FIVETHOUSAND)..5,000.00
8.QuintinVismanos(TWOTHOUSAND)...2,000.00

Thatasidefromthepersonsmentionedinthenextprecedingparagraph,nootherpersonhasanyinterest
intheabovementionedthreeestablishments.

INWITNESSWHEREOF,theysignthisinstrumentintheCityofManila,P.I.,this29thdayofApril,
1957.


[Sgd.]
BUENAVENTURAREMOTIGUE

[Sgd.]
[40]
CONCHITAJARANTILLADEREMOTIGUE


TheAcknowledgementofParticipatingCapitalisadulynotarizeddocumentvoluntarilyexecutedby
ConchitaJarantillaRemotigueandBuenaventuraRemotiguein1957.Petitionerdoesnotdisputeits
contentsandisactuallyrelyingonittoprovehisparticipationinthepartnership.Article1797ofthe
CivilCodeprovides:

Art.1797.Thelossesandprofitsshallbedistributedinconformitywiththeagreement.If
onlytheshareofeachpartnerintheprofitshasbeenagreedupon,theshareofeachinthelossesshall
beinthesameproportion.

Intheabsenceofstipulation,theshareofeachpartnerintheprofitsandlossesshallbein
proportion to what he may have contributed, but the industrial partner shall not be liable for the
losses.As for the profits, the industrial partner shall receive such share as may be just and equitable
underthecircumstances.Ifbesideshisserviceshehascontributedcapital,heshallalsoreceiveashare
intheprofitsinproportiontohiscapital.(Emphasessupplied.)


Itisclearfromtheforegoingthatapartnerisentitledonlytohisshareasagreedupon,orinthe
absenceofanysuchstipulations,thentohisshareinproportiontohiscontributiontothepartnership.
Thepetitionerhimselfclaimshissharetobe6%,asstatedintheAcknowledgementofParticipating
Capital.However,petitionerfailstorealizethatthisdocumentspecificallyenumeratedthebusinesses
coveredbythepartnership:ManilaAthleticSupply,RemotigueTradinginIloiloCityandRemotigue
TradinginCotabatoCity.Sincetherewasaclearagreementthatthecapitalthepartnerscontributed
wenttothethreebusinesses,thenthereisnoreasontodeviatefromsuchagreementandgobeyond
the stipulations in the document. Therefore, the Court of Appeals did not err in limiting
petitioners share to the assets of the businesses enumerated in the Acknowledgement of
ParticipatingCapital.

[41]
InVillarealv.Ramirez, theCourtheldthatsinceapartnershipisaseparatejuridicalentity,
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 9/15
12/10/2016 G.R.No.154486

thesharestobepaidouttothepartnersisnecessarilylimitedonlytoitstotalresources,towit:

Since it is the partnership, as a separate and distinct entity, that must refund the shares of the
partners,theamounttoberefundedisnecessarilylimitedtoitstotalresources.Inotherwords,itcan
onlypayoutwhatithasinitscoffers,whichconsistsofallitsassets.However,beforethepartnerscan
bepaidtheirshares,thecreditorsofthepartnershipmustfirstbecompensated.Afterallthecreditors
have been paid, whatever is left of the partnership assets becomes available for the payment of the
[42]
partnersshares.


Thereisnoevidencethatthesubjectrealpropertieswereassetsofthepartnershipreferredtoin
theAcknowledgementofParticipatingCapital.

Thepetitionerfurtherassertsthatheisentitledtorespondentspropertiesbasedontheconcept
of trust. He claims that since the subject real properties were purchased using funds of the
partnership,whereinhehasa6%share,thenlawandequitymandatesthatheshouldbeconsideredas
[43] [44]
acoownerofthosepropertiesinsuchproportion. InPigaov.Rabanillo, thisCourtexplained
theconceptoftrusts,towit:

Expresstrustsarecreatedbytheintentionofthetrustororoftheparties,whileimpliedtrustscomeinto
beingbyoperationoflaw,eitherthroughimplicationofanintentiontocreateatrustasamatteroflaw
orthroughtheimpositionofthetrustirrespectiveof,andevencontraryto,anysuchintention.Inturn,
implied trusts are either resulting or constructive trusts. Resulting trusts are based on the equitable
doctrinethatvaluableconsiderationandnotlegaltitledeterminestheequitabletitleorinterestandare
presumedalwaystohavebeencontemplatedbytheparties.Theyarisefromthenatureorcircumstances
oftheconsiderationinvolvedinatransactionwherebyonepersontherebybecomesinvestedwithlegal
[45]
titlebutisobligatedinequitytoholdhislegaltitleforthebenefitofanother.


Onprovingtheexistenceofatrust,thisCourtheldthat:

Respondenthaspresentedonlybareassertionsthatatrustwascreated.Notingtheneedtoprove
theexistenceofatrust,thisCourthasheldthus:

Asarule,theburdenofprovingtheexistenceofatrustisonthepartyasserting
itsexistence,andsuchproofmustbeclearandsatisfactorilyshowtheexistenceofthe
trust and its elements. While implied trusts may be proved by oral evidence, the
evidence must be trustworthy and received by the courts with extreme caution, and
should not be made to rest on loose, equivocal or indefinite declarations. Trustworthy
[46]
evidenceisrequiredbecauseoralevidencecaneasilybefabricated.


Thepetitionerhasfailedtoprovethatthereexistsatrustoverthesubjectrealproperties.Aside
fromhisbareallegations,hehasfailedtoshowthattherespondentsusedthepartnershipsmoneyto
purchase the said properties. Even assuming arguendo that some partnership income was used to
acquiretheseproperties,thepetitionershouldhavesuccessfullyshownthatthesefundscamefromhis
share in the partnership profits. After all, by his own admission, and as stated in the
AcknowledgementofParticipatingCapital,heownedamere6%equityinthepartnership.
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 10/15
12/10/2016 G.R.No.154486

AcknowledgementofParticipatingCapital,heownedamere6%equityinthepartnership.

Inessence,thepetitionerisclaiminghis6%shareinthesubjectrealproperties,byrelyingon
hisownselfservingtestimonyandtheequallybiasedtestimonyofAntonietaJarantilla.Petitionerhas
notpresentedevidence,otherthantheseunsubstantiatedtestimonies,toprovethattherespondentsdid
nothavethemeanstofundtheirotherbusinessesandrealpropertieswithoutthepartnershipsincome.
Ontheotherhand,therespondentshavenotonly,bytestimonialevidence,proventheircaseagainst
the petitioner, but have also presented sufficient documentary evidence to substantiate their claims,
allegationsanddefenses.Theypresentedpreponderantproofonhowtheyacquiredandfundedsuch
[47]
properties in addition to tax receipts and tax declarations. It has been held that while tax
declarationsandrealtytaxreceiptsdonotconclusivelyproveownership,theymayconstitutestrong
[48]
evidenceofownershipwhenaccompaniedbypossessionforaperiodsufficientforprescription.
Moreover,itisaruleinthisjurisdictionthattestimonialevidencecannotprevailoverdocumentary
[49]
evidence. This Court had on several occasions, expressed our disapproval on using mere self
[50]
serving testimonies to support ones claim. In Ocampo v. Ocampo, a case on partition of a co
ownership,weheldthat:

Petitioners assert that their claim of coownership of the property was sufficiently proved by
their witnesses Luisa OcampoLlorin and Melita Ocampo. We disagree. Their testimonies cannot
prevailoverthearrayofdocumentspresentedbyBelen.Aclaimofownershipcannotbebasedsimply
[51]
onthetestimoniesofwitnessesmuchlessonthoseofinterestedparties,selfservingastheyare.


Itistruethatacertificateoftitleismerelyanevidenceofownershiportitleovertheparticular
property described therein. Registration in the Torrens system does not create or vest title as
registrationisnotamodeofacquiringownershiphence,thiscannotdepriveanaggrievedpartyofa
[52]
remedyinlaw. However,petitionerassertsownershipoverportionsofthesubjectrealproperties
onthestrengthofhisownadmissionsandonthetestimonyofAntonietaJarantilla.As held by this
[53]
CourtinRepublicofthePhilippinesv.Orfinada,Sr. :

Indeed,aTorrenstitleisgenerallyconclusiveevidenceofownershipofthelandreferredtotherein,and
a strong presumption exists that a Torrens title was regularly issued and valid. A Torrens title is
incontrovertibleagainstanyinformacionpossessoria,ofothertitleexistingpriortotheissuancethereof
not annotated on the Torrens title. Moreover, persons dealing with property covered by a Torrens
[54]
certificateoftitlearenotrequiredtogobeyondwhatappearsonitsface.


Aswehavesettledthatthisactionneverreallywasforpartitionofacoownership,topermit
petitionersclaimonthesepropertiesistoallowacollateral,indirectattackonrespondentsadmitted
titles.InthewordsoftheCourtofAppeals,suchevidencecannotoverpowertheconclusivenessof
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 11/15
12/10/2016 G.R.No.154486
titles.InthewordsoftheCourtofAppeals,suchevidencecannotoverpowertheconclusivenessof
these certificates of title, more so since plaintiffs [petitioners] claims amount to a collateral attack,
which is prohibited under Section 48 of Presidential Decree No. 1529, the Property Registration
[55]
Decree.

SEC. 48. Certificate not subject to collateral attack. A certificate of title shall not be subject to
collateralattack.Itcannotbealtered,modified,orcancelledexceptinadirectproceedinginaccordance
withlaw.


ThisCourthasdeemedanactionorproceedingtobeanattackonatitlewhenitsobjectiveisto
[56]
nullify the title, thereby challenging the judgment pursuant to which the title was decreed. In
[57]
Aguilarv.Alfaro, this Court further distinguished between a direct and an indirect or collateral
attack,asfollows:

A collateral attack transpires when, in another action to obtain a different relief and as an
incidenttothepresentaction,anattackismadeagainstthejudgmentgrantingthetitle.Thismannerof

attackistobedistinguishedfromadirectattackagainstajudgmentgrantingthetitle,throughanaction
whose main objective is to annul, set aside, or enjoin the enforcement of such judgment if not yet
implemented,ortoseekrecoveryifthepropertytitledunderthejudgmenthadbeendisposedof.xxx.


Petitioners only piece of documentary evidence is the Acknowledgement of Participating
Capital,whichasdiscussedabove,failedtoprovethattherealpropertiesheisclaimingcoownership
of were acquired out of the proceeds of the businesses covered by such document. Therefore,
petitionerstheoryhasnofactualorlegallegtostandon.

WHEREFORE,thePetitionisherebyDENIEDandtheDecisionoftheCourtofAppealsin
CAG.R.CVNo.40887,datedJuly30,2002isAFFIRMED.

SOORDERED.

TERESITAJ.LEONARDODECASTRO
AssociateJustice


WECONCUR:



RENATOC.CORONA
ChiefJustice
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 12/15
12/10/2016 G.R.No.154486
ChiefJustice
Chairperson




DIOSDADOM.PERALTA ROBERTOA.ABAD
AssociateJustice AssociateJustice





JOSEPORTUGALPEREZ
AssociateJustice



CERTIFICATION


Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer of the
opinionoftheCourtsDivision.



RENATOC.CORONA
ChiefJustice

*PerSpecialOrderNo.913datedNovember2,2010.
**PerSpecialOrderNo.917datedNovember24,2010.
[1]
UnderRule45ofthe1997RulesofCivilProcedure.
[2]
Rollo,pp.3445pennedbyAssociateJusticeBuenaventuraJ.GuerrerowithAssociateJusticesRodrigoV.CosicoandPerlitaJ.Tria
Tironaconcurring.
[3]
Id.at105110.
[4]
Idat34.
[5]
Records,Vol.I,p.1.
[6]
Rollo,p.49.
[7]
Idat3435.
[8]
Records,Vol.I,p.1.
[9]
Idat7.
[10]
Idat79.
[11]
Idat7.
[12]
Idat6.
[13]
Rollo,pp.4857.
[14]
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 13/15
12/10/2016 G.R.No.154486
[14]
Rollo,p.18thesubjectrealpropertiesarecoveredbyTCTNos.35655,338398,338399&335395,alloftheRegistryofDeedsof
QuezonCityTCTNos.(18303)23341,142882&490007(4615),alloftheRegistryofDeedsofRizalandTCTNo.T6309ofthe
RegistryofDeedsofCotabato.
[15]
Id.at7276.
[16]
Id.at111197.
[17]
Id.at8387.
[18]
Id.at8586.
[19]
Id.at102104.
[20]
Id.at8387.
[21]
Id.at109110.
[22]
Id.at205.
[23]
Id.at44.
[24]
CArollo,p.564.
[25]
DocketedasG.R.No.154722.
[26]
Rollo,p.313.
[27]
CArollo,p.284.
[28]
Rollo,p.20.
[29]
VectorShippingCorporationv.Macasa,G.R.No.160219,July21,2008,559SCRA105.
[30]
Binayv.Odea,G.R.No.163683,June8,2007,524SCRA248,255256,citingVelayoFongv.Velayo,G.R.No.155488,December6,
2006,510SCRA320,329330.
[31]
Rollo,pp.105110.
[32]
Id.at42.
[33]
Gov.CourtofAppeals,403Phil.883,890(2001).
[34]
CIVILCODE,Art.484.
[35]
CIVILCODE,Art.1767.
[36]
248Phil.788(1988).
[37]
102Phil.140(1957).
[38]
Pascualv.TheCommissionerofInternalRevenue,supranote36at795796.
[39]
Id.at795.

[40]
Records,Vol.I,p.6.
[41]
453Phil.999(2003).
[42]
Id.at10081009.
[43]
Rollo,p.24.
[44]
G.R.No.150712,May2,2006,488SCRA546.
[45]
Id.at560561.
[46]
Ocov.Limbaring,G.R.No.161298,January31,2006,481SCRA348.
[47]
Records,Vol.I,pp.79,5462,Vol.II,pp.482486,535564,567653.
[48]
HeirsofClementeErmacv.HeirsofVicenteErmac,451Phil.368,378(2003).
[49]
RomagoElectricCo.,Inc.v.CourtofAppeals,388Phil.964,976(2000).
[50]
471Phil.519(2004).
[51]
Id.at539.
[52]
HeirsofClementeErmacv.HeirsofVicenteErmac,supranote48at377.
[53]
http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 14/15
12/10/2016 G.R.No.154486
[53]
G.R.No.141145,November12,2004,442SCRA342.
[54]
Id.at359.
[55]
Rollo,pp.4243.
[56]
Oov.Lim,G.R.No.154270,March9,2010.
[57]
G.R.No.164402,July5,2010.

http://sc.judiciary.gov.ph/jurisprudence/2010/december2010/154486.htm 15/15