10.

Heirs of Tan Eng Kee , Petitioners

vs. CA and Benguet Lumber Company, Represented By Its President Tan Eng Lay,
Respondents.
October 3, 2000, Gr No. 126881

Facts:
Petitioners, HEIRS OF TAN ENG KEE, filed suit against the decedent's brother TAN ENG
LAY on February 19, 1990 in the RTC for accounting, liquidation and winding up of the alleged
partnership formed after World War II between Tan Eng Kee and Tan Eng Lay, impleading
private respondent herein BENGUET LUMBER COMPANY, as represented by Tan Eng Lay.

Petitioner’s Argument:
Petitioners alleged that after the second World War, Tan Eng Kee and Tan Eng Lay,
pooling their resources and industry together, entered into a partnership engaged in the business
of selling lumber and hardware and construction supplies. under the name "Benguet Lumber"
which they jointly managed until Tan Eng Kee's death in 1984. However, in 1981, Tan Eng Lay
and his children caused the conversion of the partnership into corporation called "Benguet
Lumber Company.

RTC ruled that Benguet Lumber is a joint venture which is akin to a particular
partnership between Tan Eng Kee and Tan Eng Lay, and the heirs of Tan Eng Kee have a legal
right to share in said assets. CA reversed the RTC decision and dismissed the petition, hence this
petition for review on certiorari.

Issue: WON there is a partnership between the brothers Tan Eng Kee and Tan Eng Lay.

Ruling:
No. The evidence presented by petitioners falls short of the quantum of proof required to
establish a partnership. It can be deduced that Tan Eng Kee was only an employee, not a partner.
There was no evidence that they intended to divide the profits of the business between
themselves, which is one of the essential features of a partnership, and in 40 years, Tan Eng Kee
never asked for an accounting. The best evidence would have been the contract of partnership
itself, or the articles of partnership but there is none.

A joint adventure "presupposes generally a parity of standing between the joint co-ventures or
partners, in which each party has an equal proprietary interest in the capital or property
contributed, and where each party exercises equal rights in the conduct of the business.

As provided by Article 1769 of the Civil Code in determining whether a partnership exists, these
rules shall apply:

(1) Except as provided by Article 1825, persons who are not partners as to each other are not
partners as to third persons;

(2) Co-ownership or co-possession does not of itself establish a partnership, whether such co-
owners or co-possessors do or do not share any profits made by the use of the property;

(3) The sharing of gross returns does not of itself establish a partnership, whether or not the
persons sharing them have a joint or common right or interest in any property which the returns
are derived;

(4) The receipt by a person of a share of the profits of a business is prima facie evidence that he
is a partner in the business, but no such inference shall be drawn if such profits were received in
payment:

(a) As a debt by installment or otherwise;

(b) As wages of an employee or rent to a landlord;

 (b) As an annuity to a widow or representative of a deceased partner;

(d) As interest on a loan, though the amount of payment vary with the profits of the business;

(e) As the consideration for the sale of a goodwill of a business or other property by
installments or otherwise.