BUS ORG TIPS -Is marriage a partnership? -If the husband and wife put up a business, is it a partnership?

-Partnership 1767 verbatim -A and B contributed an industry both as a limited partner is it allowed? (professional partnership) -What if A and B are experts in sales? (No, sales is not a profession) -Essential features of partnership -A B and C entered into a partnership with the agreement that profits will be donated to charity, is it a partnership? -What if A and B excluded C from the share in profits? Is that allowed? -1769 verbatim -Do the shares in profits and losses need to be stipulated? what if there is no stipulation? -Partnership vs. Corporation -Effect of partial lawful and partial unlawful partnership -Partnership by estoppel -Execution of public instrument on movable property and capital 3,00 and up; Rules

Bus Org cases: 1. Heirs of Tan Eng Kee v. CA, (GR No.) 126881, Oct 3, 2000 2. Ferdinand Santos v. Sps. Reyes, 135813, Oct 25, 2001 3. Aurelio Litonjua v. Eduardo Litonjua, 166299-300, Dec 13, 2005 4. Oscar Angeles v. Sec. of Justice, 14261, Jul 29, 2005 5. Lilibeth Suma-Chan v. Lamberto Chua, 143340, Aug 15, 2001 6. Prime Link Property v. Ma. Clarita Lazatin, 167379, Jun 27, 2006 7. Mariano Pascual v. CIR, L-78123, Oct 18, 1983 8. Dan Hue v. IAC, 70926, Jan 31, 1989 9. Marjorie Tocao v. CA, 127405, Oct 4, 2000 10. Antonia Torres v. CA, 134559, Dec 9, 1999 11. Lim Tom Lim v. P. Fishi, 136448, Nov 3, 1999 12. Evangelista & Co. v. Santos, 51 SCRA 416 13. Mobil Oil Phils. v. CFI, 40457, May 8, 1990 14. Ramnani v. CA, 196 SCRA 71

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Heirs of Tan Eng Kee vs. CA (October 3, 2000) Facts: The heirs of Tan Eng Kee, composed of his children and his wife, claims that their father was a partner of Tan Eng Lay in Benguet Lumber Company. Tan Eng Lay is the brother of the petitioners' father who accordung to them entered into a partnership with the former after the WWII were they both pooled in their money in order to recapitalize the business. Petitioners wants to account, liquidate and wind up the partnership as well as the equal division of the net assets of the company. They alleged that since Tan Eng Kee was conducting the affairs of the company/business with his brother, Gave orders to the employees, prepared orders for the suppliers, their families beind employed in the business and that their families lived in the same compound where the Benguet Lumber Company is found then these establishes the existence of a partnership. They also allege that their father was a co-owner of some 80 pieces of G.I. Sheets and that their father was also receiving money from the company. Benguet Lumber Company, represented by Tan Eng Lay, answered by stating that Tan Eng Kee was merely an employee of the said company evidenced by payrolls and the SSS coverage of petitioners' father. They also showed the registration of the business as that of a proprietorship. The RTC of Baguio ruled that there was a partnership between the two brothers in the form of a joint-venture. The CA reversed the decision of the RTC. Issue: WON Tan Eng Kee and Tan Eng Lay were partners in Benguet Lumber? Held: No partnership was established as the evidence presented was insufficient. Tan Eng Kee was merely an employee receiving wages. The partnership contract is required to be in writing the capital of which exceeds P3,000 and the findings of the lower courts reveals the absence of such contract. Co-ownership or co-possession is not an indicium of the existence of a partnership. A demand for a periodic accounting is evidence of a partnership which was not done by Tan Eng Kee during his lifetime being his right if ever he was a partner. The documents presented, not validly declared falsified by another court, further proves the non-existence of a partnership relation between the two brothers but an employer-employee relationship. Furthermore, petitioners did not offer or present evidence that their father received amounts pertaining to his share in the profits of the company. The allegations of petitioners merely shows that their father was merely involved in the operations of Benguet Lumber but does not establish in what capacity.

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Santos VS. Spouses Reyes FACTS: On June 13, 1986, a lending business venture was launched by Fernando Santos (petitioner), Nieves Reyes (respondent) and Meliton Zabat with the agreement that Santos will be the financer and will receive the lions share of 70% of the profit. The rest will receive 15% each. Thereafter, Zabat was replaced by the husband of Reyes because it was discovered that the latter was engaged in the same lending business in competition with their partnership. On June 5, 1987, Zabat filed a complaint for the recovery of sum of money from the spouses Reyes claiming that the latter misappropriated funds as employees. The spouses Reyes answered that they are not mere employees but partners of the petitioner. The trial court ruled in favor of Spouses Reyes and was affirmed by the Court of Appeals. ISSUE: WON there was a partnership established to engage in a money-lending business. WON the CA is correct in granting the spouses Reyes counterclaim for their share in partnership and for damages. HELD: As to the first ISSUE, there is an establishment of a partnership. Under the contract of partnership, two or more persons bind themselves to contribute money, property and industry to a common fund, with the intention of dividing the profit among themselves. The stipulation between the petitioner and the respondent spouses clearly shows that there is a partnership wherein the Articles of Agreement, there are signatories that they shall share the profits of the business in 70-15-15 manner, with petitioner getting the lions share. As to the second ISSUE, the SC found a reason to disagree with CA. exhibit 10-I showed that the partnership earned a total income of P20,429,520 for the period of June 13, 1986 until April 19, 1987. It did not consider the expenses sustained by the partnership. All expenses incurred by the money-lending enterprise of the parties must first be deducted from the total income in order to arrive at the net profit. The respondents exhibits did not reflect the complete financial condition of the money-lending business.

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AURELIO K. LITONJUA, JR., vs. EDUARDO K. LITONJUA, SR, et al. (G.R. Nos. 166299-300. December 13, 2005) FACTS: Petitioner and herein respondent are brothers. The legal dispute between them started when, Aurelio filed a suit against his brother Eduardo alleging that, since June 1973, he and Eduardo are into a joint venture/partnership arrangement in the Odeon Theater business which had accumulated various assets including but not limited to the corporate defendants and their respective assets. Also, the substantial assets of most of the corporate defendants consist of real properties. However, sometime in 1992, the relations between Aurelio and Eduardo became sour so that Aurelio requested for an accounting and liquidation of his share in the joint venture/partnership but to no avail. Petitioner has reasonable cause to believe that respondents are transferring various real properties of the corporations belonging to the joint venture/partnership to other parties in fraud of petitioner. ISSUE: WON petitioner and respondent are considered partners in the theatre, shipping and realty business. HELD: The instant petition is DENIED. A further examination of the allegations in the complaint would show that petitioners contribution to the so-called "partnership/joint venture" was his supposed share in their family business. In other words, his contribution as a partner in the alleged partnership/joint venture consisted of immovable properties and real rights. Lest it be overlooked, the contract-validating inventory requirement under Article 1773 of the Civil Code applies as long as real property or real rights are initially brought into the partnership. In context, the more important consideration is that real property was contributed, in which case an inventory of the contributed property duly signed by the parties should be attached to the public instrument, else there is legally no partnership to speak of. Considering that the allegations in the complaint showed that petitioner contributed immovable properties to the alleged partnership, the "Memorandum" which purports to establish the said "partnership/joint venture" is NOT a public instrument and there was NO inventory of the immovable property duly signed by the parties. As such, the said "Memorandum" is null and void for purposes of establishing the existence of a valid contract of partnership.

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Angeles VS. Sec. Of Justice FACTS: On November 1992, Mercado convinced Angeles spouses to enter into a contract of antichresis (sanglaang-perde), covering 8 parcels of land planted with fruit-bearing lanzones trees located in Laguna and owned by Ivana Sazo. The said contract was to last for 5 years with P210,000 as consideration. Since during only the weekends are the spouses able to go to Laguna, Mercado administered the lands and completed the necessary paper works. Mercado gave accounting only in 1993 and stopped in the year 1995. They discovered that Mercado had put the contract of sanglaang-perde under Mercado and his spouses names. In Mercados counter affidavit, he alleged that there was (sosyo industrial) or industrial partnership agreement between them and that the Angeles spouses are the financiers and Mercado and his spouse as industrial partners. Under the industrial agreement, capital would come from the Angeles spouses while the profit would be divided evenly between Mercado and the Angeles spouses. In the ruling of the Provincial Prosecution Office, it stated that the accusation of estafa lacks enough credible evidentiary support to sustain a prima facie finding. The Angeles spouses appealed on the Secretary of Justice. It was ruled that the crime of estafa cannot be sustained. ISSUE: WON a partnership existed between Mercado and the Angeles spouses. HELD: There was an establishment of partnership between Mercado and the Angeles spouses. There is a contract showing industrial relationship and contribution of money and industry to a common fund, and the division of profits between Angeles spouses and Mercado. Furthermore, the Angeles spouses contributed money to the partnership and not immovable property and the mere failure to register the contract of partnership does not affect the liability of the partnership. The purpose of registration of the COP is to give notice to third parties. Failure to register the COP, does not affect the liability of the partnerships juridical personality. A partnership may exist even if the partners do not use the words partner or partnership.

Lilibeth Sunga Chan vs Lamberto Chua (G.R. No. 143340

August 15, 2001)

FACTS: In 1977, Lamberto Chua verbally entered into a partnership agreement with Jacinto L Sunga, father of petitioner, in the distribution of Shellane Liquefied Petroleum Gas (LPG) in Manila. For business convenience, respondent and Jacinto allegedly agreed to register the business name of their partnership, SHELLITE GAS Page 5 of 22

APPLIANCE CENTER (hereafter Shellite), under the name of Jacinto as a sole proprietorship. Respondent allegedly delivered his initial capital contribution of P100,000.00 to Jacinto while the latter in turn produced P100,000.00 as his counterpart contribution, with the intention that the profits would be equally divided between them. Upon Jacinto's death in the later part of 1989, his surviving wife, petitioner Cecilia and particularly his daughter, petitioner Lilibeth, took over the operations, control, custody, disposition and management of Shellite without respondent's consent. Despite respondent's repeated demands upon petitioners for accounting, inventory, appraisal, winding up and restitution of his net shares in the partnership, petitioners failed to comply. Petitioner Lilibeth allegedly continued the operations of Shellite, converting to her own use and advantage its properties. On March 31, 1991, respondent claimed that after petitioner Lilibeth ran out the alibis and reasons to evade respondent's demands, she disbursed out of the partnership funds the amount of P200,000.00 and partially paid the same to respondent. Petitioner Lilibeth allegedly informed respondent that the P200,000.00 represented partial payment of the latter's share in the partnership, with a promise that the former would make the complete inventory and winding up of the properties of the business establishment. Despite such commitment, petitioners allegedly failed to comply with their duty to account, and continued to benefit from the assets and income of Shellite to the damage and prejudice of respondent. Trial court directed petitioner to render an accounting, to restitute to the partnership all properties, assets, income and profits they misapplied and converted to their own use and advantage, to pay the plaintiff earned but unreceived income and profits from the partnership from 1988 to May 30, 1992, ORDERING them to wind up the affairs of the partnership and terminate its business activities pursuant to law. CA affirmed the decision. ISSUES: WON there exists a partnership HELD: Decision is affirmed. Ratio Decidendi: A partnership may be constituted in any form, except where immovable property of real rights are contributed thereto, in which case a public instrument shall necessary.6 Hence, based on the intention of the parties, as gathered from the FACTS and ascertained from their language and conduct, a verbal contract of partnership may arise.7 The essential profits that must be proven to that a partnership was agreed upon are (1) mutual contribution to a common stock, and (2) a joint interest in the profits.

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Primelink v Lopez (G.R. No. 167379

June 27, 2006)

FACTS: Primelink Properties and Development Corporation (Primelink for brevity) is a domestic corporation engaged in real estate development. Rafaelito W. Lopez is its President and Chief Executive Officer.3 Ma. Clara T. Lazatin-Magat and her brothers, are co-owners of two (2) adjoining parcels of landlocated in Tagaytay City and covered by Transfer Certificate of Title (TCT) No. T-108484 of the Register of Deeds of Tagaytay City. On March 10, 1994, the Lazatins and Primelink, represented by Lopez, in his capacity as President, entered into a Joint Venture Agreement5 (JVA) for the development of the aforementioned property into a residential subdivision to be known as "Tagaytay Garden Villas." Under the JVA, the Lazatin siblings obliged themselves to contribute the two parcels of land as their share in the joint venture. For its part, Primelink undertook to contribute money, labor, personnel, machineries, equipment, contractors pool, marketing activities, managerial expertise and other needed resources to develop the property and construct therein the units for sale to the public. In a Letter13 dated April 10, 1997, the Lazatins, through counsel, demanded that Primelink comply with its obligations under the JVA, otherwise the appropriate action would be filed against it to protect their rights and interests. This impelled the officers of Primelink to meet with the Lazatins and enabled the latter to review its business records/papers. In another Letter14 dated October 22, 1997, the Lazatins informed Primelink that they had decided to rescind the JVA effective upon its receipt of the said letter. The Lazatins demanded that Primelink cease and desist from further developing the property. Trial court rendered a decision rescinding the Joint Venture Agreement executed between the plaintiffs and the defendants; immediately restoring to the plaintiffs possession of the subject parcels of land; ordering the defendants to render an accounting of all income generated as well as expenses incurred and disbursement made in connection with the project. CA affirmed trial courts decision rulingthat, under Philippine law, a joint venture is a form of partnership and is to be governed by the laws of partnership. ISSUE: WON trial court erred in rescinding the JVA between the parties HELD: SC affirmed appellate courts decision. Ratio Decidendi: As a general rule, the relation of the parties in joint ventures is governed by their agreement. When the agreement is silent on any particular ISSUE, the general principles of partnership may be resorted to. The legal concept of a joint venture is of common law origin. It has no precise legal definition, but it has been generally understood to mean an organization formed for some temporary Page 7 of 22

purpose. It is, in fact, hardly distinguishable from the partnership, since elements are similar community of interest in the business, sharing of profits and losses, and a mutual right of control. 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. this observation is not entirely accurate in this jurisdiction, since under the Civil Code, a partnership may be particular or universal, and a particular partnership may have for its object a specific undertaking. It would seem therefore that, under Philippine law, a joint venture is a form of partnership and should thus be governed by the laws of partnership. The Supreme Court has, however, recognized a distinction between these two business forms, and has HELD that although a corporation cannot enter into a partnership contract, it may, however, engage in a joint venture with others. When the RTC rescinded the JVA on complaint of respondents based on the evidence on record that petitioners willfully and persistently committed a breach of the JVA, the court thereby dissolved/cancelled the partnership.54 With the rescission of the JVA on account of petitioners fraudulent acts, all authority of any partner to act for the partnership is terminated except so far as may be necessary to wind up the partnership affairs or to complete transactions begun but not yet finished.55 On dissolution, the partnership is not terminated but continues until the winding up of partnership affairs is completed.56 Winding up means the administration of the assets of the partnership for the purpose of terminating the business and discharging the obligations of the partnership.

MARIANO P. PASCUAL and RENATO P. DRAGON, petitioners, vs. THE COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS, respondents Facts: On June 22, 1965, petitioners bought 2 parcels of land from Santiago Bernardino, et al. And on May 28, 1966, they bought another 3 parcels of land from Juan Roque. The first 2 parcels of land were sold by petitioners in 1968 to Marenir Devt Corporation, while the 3 parcels of land were sold to petitioner Erlinda Reyes and Maria Samson in 1970. Petitioners realized a net profit in the sale made in 1968 in the amt of 165,224.70 while they realized a net profit of 60,000 in 1970. The

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corresponding capital gains taxes were paid by petitioners in 1973 and 1974 by availing of the tax amnesties granted in the said years. In 1979, Acting Commissioner Efren Plana, in his letter, assessed petitioners and required them to pay a total of 107,101.70 as alleged deficiency corporate income taxes for the years 1968 and 1970. Petitioners protested the assessment asserting that they had availed of tax amnesties in 1974. In their reply, Commissioner informed that in 1968 and 1970, petitioners as coownersd in the real estate transactions formed an unregistered partnership or joint venture taxable as a corporation and its income was subject to the taxes prescribed under sec24, both of the National Internal Revenue Code; that the unregistered partnership was subject to the taxes prescribed therein; and that the availment of tax amnesty under PD 23 did not relieve them from the liability of the unregistered partnership. Hence petitioners were required to pay the deficiency income tax assessed. Petitioners filed a petition for review with the respondent court of tax appeals; the court affirmed the decision of the respondent commissioner. Issue: whether or not an unregistered partnership was really formed by petitioners which like a corporation was subject to corporate income tax distinct from that imposed on the partners Ruling: There is no evidence that petitioners entered into an agreement to contribute money, property, or industry to a common fund, and that they intended to divide the profits among themselves. Respondent commisiioner just assumed these conditions to be present on the basis of the fact that petitioners purchased certain parcels of land and became co-owners thereof. In the instant case, petitioners bought parcels of land in 1965, they did not sell the same nor make any improvements thereon. In 1966, they bought another 3 parcels of land from one seller. It was only in 1968 when they sold the two parcels of land after which they did not make any addl or new purchase. The transactions were isolated. The character of habituality peculiar to business transactions were not present. In the Evangelista case, the properties were leased out to tenants for several years. The business was under manangement of one of the partners, uch condition existed for 15years. None of those circumstances are present in the case at bar. The sharing of returns does not in itself establish a partnership whether or not the persons sharing therein have a joint or common right or interest in the property. There must be a clear intent to form a partnership, the existence of a juridical personality different from the individual partners In the present case, there is clear evidence of co-ownership between the petitioners. There is no adequate basis to support the proposition that they formed an unregistered partnership.. Page 9 of 22

They shared in the gross profits as co-owners and paid their capital gains taxes on their net profits and availed of the tax amnesty thereby. Even assuming that such an unregistered partnership exists, since there is no such existing unregistered partnership with a distinct personality nor with assets that can be held liable for said deficiency corporate income tax, then petitioners xan be held individually liable as partners for the unpaid obligation of the partnership. However, as petitioners have availed of the benefits of tax amnesty as individual taxpayers in these transactions, they are thereby relieved of any further tax liability arising therefrom.

DAN FUE LEUNG, petitioner, vs. HON. INTERMEDIATE APPELLATE COURT and LEUNG YIU, respondents. FACTS: Sun Wah Panciteria, a restaurant established sometime in October 1955 in Sta. Cruz, Manila, was registered as a single proprietorship, with licenses and permits issued to and in favor of petitioner Dan Fue Leung. Private respondent Leung Yiu allege that the restaurant was actually a partnership as he had contributed P4, 000.00 to its initial establishment with the understanding that he would be entitled to 22% of the annual profit derived from the operation of the said panciteria. He also produced evidence that he received the amount of P12, 000.00 from the petitioner from the profits of the operation of the restaurant in 1974. Petitioner, on the other hand, denied respondents claim and also contended lately that it was erroneous for the courts to interpret or construe thefinancial assistance mentioned in the private respondents complaint to mean the contribution of a partner to a partnership. As between the conflicting evidence of the parties, the trial court and the appellate court gave credence to the fact that private respondent is a partner of the petitioner in the setting up and operations of the panciteria, entitling him to his share of the annual profits of the said restaurant. ISSUE: Is the private respondent a partner of the petitioner in the establishment of Sun Wah Panciteria? HELD: YES. The lower courts did not err in construing the complaint as one wherein the private respondent asserted his rights as partner of the petitioner in the establishment of the Sun Wah Panciteria, notwithstanding the use of the term financial assistance therein. Given its ordinary meaning, financial assistance is the giving out of money to another without the expectation of any returns therefrom but this circumstance under which the P4, 000.00 was given to the petitioner does not obtain in this case. The complaint explicitly stated that as a return for such financial assistance, plaintiff would be entitled to 22% of the annual profit derived from the operation of the said panciteria. The requisites of a partnership which are Page 10 of 22

 1) two or more persons bind themselves to contribute money, property or industry to a common fund and 2) intention on the partner of the partners to divide the profits among themselves have been also established.

MARJORIE TOCAO and WILLIAM T. BELO, petitioners, vs. COURT OF APPEALS and NENITA A. ANAY, respondent. RESOLUTION The inherent powers of a Court to amend and control its processes and orders so as to make them conformable to law and justice includes the right to reverse itself, especially when in its honest opinion it has committed an error or mistake in judgment, and that to adhere to its decision will cause injustice to a party litigant.1 On November 14, 2001, petitioners Marjorie Tocao and William T. Belo filed a Motion for Reconsideration of our Decision dated October 4, 2000. They maintain that there was no partnership between petitioner Belo, on the one hand, and respondent Nenita A. Anay, on the other hand; and that the latter being merely an employee of petitioner Tocao. After a careful review of the evidence presented, we are convinced that, indeed, petitioner Belo acted merely as guarantor of Geminesse Enterprise. This was categorically affirmed by respondent's own witness, Elizabeth Bantilan, during her cross-examination. Furthermore, Bantilan testified that it was Peter Lo who was the company's financier. Thus: Q - You mentioned a while ago the name William Belo. Now, what is the role of William Belo with Geminesse Enterprise? A - William Belo is the friend of Marjorie Tocao and he was the guarantor of the company. Q What do you mean by guarantor?

A - He guarantees the stocks that she owes somebody who is Peter Lo and he acts as guarantor for us. We can borrow money from him. Q A Q A You mentioned a certain Peter Lo. Who is this Peter Lo? Peter Lo is based in Singapore. What is the role of Peter Lo in the Geminesse Enterprise? He is the one fixing our orders that open the L/C. Page 11 of 22

Q A

You mean Peter Lo is the financier? Yes, he is the financier.

Q And the defendant William Belo is merely the guarantor of Geminesse Enterprise, am I correct? A Yes, sir2

The foregoing was neither refuted nor contradicted by respondent's evidence. It should be recalled that the business relationship created between petitioner Tocao and respondent Anay was an informal partnership, which was not even recorded with the Securities and Exchange Commission. As such, it was understandable that Belo, who was after all petitioner Tocao's good friend and confidante, would occasionally participate in the affairs of the business, although never in a formal or official capacity.3 Again, respondent's witness, Elizabeth Bantilan, confirmed that petitioner Belo's presence in Geminesse Enterprise's meetings was merely as guarantor of the company and to help petitioner Tocao.4 Furthermore, no evidence was presented to show that petitioner Belo participated in the profits of the business enterprise. Respondent herself professed lack of knowledge that petitioner Belo received any share in the net income of the partnership.5 On the other hand, petitioner Tocao declared that petitioner Belo was not entitled to any share in the profits of Geminesse Enterprise.6 With no participation in the profits, petitioner Belo cannot be deemed a partner since the essence of a partnership is that the partners share in the profits and losses.7 Consequently, inasmuch as petitioner Belo was not a partner in Geminesse Enterprise, respondent had no cause of action against him and her complaint against him should accordingly be dismissed. As regards the award of damages, petitioners argue that respondent should be deemed in bad faith for failing to account for stocks of Geminesse Enterprise amounting to P208,250.00 and that, accordingly, her claim for damages should be barred to that extent. We do not agree. Given the circumstances surrounding private respondent's sudden ouster from the partnership by petitioner Tocao, her act of withholding whatever stocks were in her possession and control was justified, if only to serve as security for her claims against the partnership. However, while we do not agree that the same renders private respondent in bad faith and should bar her claim for damages, we find that the said sum of P208,250.00 should be deducted from whatever amount is finally adjudged in her favor on the basis of the formal account of the partnership affairs to be submitted to the Regional Trial Court.

WHEREFORE, based on the foregoing, the Motion for Reconsideration of petitioners is PARTIALLY GRANTED. The Regional Trial Court of Makati is hereby ordered to Page 12 of 22

DISMISS the complaint, docketed as Civil Case No. 88-509, as against petitioner William T. Belo only. The sum of P208,250.00 shall be deducted from whatever amount petitioner Marjorie Tocao shall be HELD liable to pay respondent after the normal accounting of the partnership affairs.

ANTONIA TORRES assisted by her husband, ANGELO TORRES; and EMETERIA BARING,petitioners, vs. COURT OF APPEALS and MANUEL TORRES, respondents. FACTS: This is a petition for Review on Certiorari for the decision of the Court of Appeals affirming the decision of the Trial Court in favour of herein respondent and denying reconsideration. Sisters Antonia Torres and Emeteria Baring, petitioners, entered into a "joint venture agreement"with Respondent Manuel Torres for the development of a parcel of land into a subdivision. 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 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. Respondent used the loan to implement the Agreement, among others are: effect the survey and subdivision of the lots; approval of the subdivision project with Lapu Lapu City Council; advertisement in the local newspaper; construction of roads, curbs and gutters; and construction of 6 low cost housing units. Respondent claimed that the subdivision project failed, however, because petitioners and their relatives had separately caused the annotations of adverse claims on the title to the land, which eventually scared away prospective buyers. Despite his requests, petitioners refused to cause the clearing of the claims, thereby forcing him to give up on the project. Petitioners filed with the RTC a civil action against respondent. RTC ruled in favour of respondent and which was later affirmed by CA. Hence, this Petition. ISSUE: WON, the CA erred in concluding that the agreement entered between petitioners and respondent was that of a joint venture/partnership. HELD: Art. 1767. By the contract of partnership 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. Page 13 of 22

Under the parties 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. It should be stressed that the parties implemented the contract. Thus, petitioners transferred the title to the land to facilitate its use in the name of the respondent. On the other hand, respondent caused the subject land to be mortgaged, the proceeds of which were used for the survey and the subdivision of the land and so on. Respondent's actions clearly contradict petitioners' contention that he made no contribution to the partnership. Under Article 1767 of the Civil Code, a partner may contribute not only money or property, but also industry. Moreover, petitioners contend that they cannot be bound by the contract. Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. It is undisputed that petitioners are educated and are thus presumed to have understood the terms of the contract they voluntarily signed. If it was not in consonance with their expectations, they should have objected to it and insisted on the provisions they wanted. Courts are not authorized to extricate parties from the necessary consequences of their acts, and the fact that the contractual stipulations may turn out to be financially disadvantageous will not relieve parties thereto of their obligations. They cannot now disavow the relationship formed from such agreement due to their supposed misunderstanding of its terms. Lastly, claiming that respondent was solely responsible for the failure of the subdivision project, petitioners maintain that he should be made to pay damages equivalent to 60 percent of the value of the property, which was their share in the profits under the Joint Venture Agreement. We are not persuaded. True, the Court of Appeals HELD that petitioners' acts were not the cause of the failure of the project. But it also ruled that neither was respondent responsible therefor. In imputing the blame solely to him, petitioners failed to give any reason why we should disregard the factual findings of the appellate court relieving him of fault. Accordingly, we find no reversible error in the CA's ruling that petitioners are not entitled to damages.

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WHEREFORE, the Petition is hereby DENIED and the challenged Decision AFFIRMED. Costs against petitioners.

LIM TONG LIM v. PHILIPPINE FISHING GEAR INDUSTRIES INC (G.R. No. 136448; November 3, 1999) FACTS: On behalf of "Ocean Quest Fishing Corporation," Antonio Chua and Peter Yao entered into a Contract dated February 7, 1990, for the purchase of fishing nets of various sizes from the Philippine Fishing Gear Industries, Inc. (herein respondent). They claimed that they were engaged in a business venture with Petitioner Lim Tong Lim, who however was not a signatory to the agreement. The total price of the nets amounted to P532,045. Four hundred pieces of floats worth P68,000 were also sold to the Corporation. The buyers, however, failed to pay for the fishing nets and the floats; hence, private respondents filed a collection suit against Chua, Yao and Petitioner Lim Tong Lim with a prayer for a writ of preliminary attachment. The suit was brought against the three in their capacities as general partners, on the allegation that "Ocean Quest Fishing Corporation" was a nonexistent corporation as shown by a Certification from the Securities and Exchange Commission. On September 20, 1990, the lower court ISSUEd a Writ of Preliminary Attachment, which the sheriff enforced by attaching the fishing nets on board F/B Lourdes which was then docked at the Fisheries Port, Navotas, Metro Manila. ISSUE: Whether or not there was a partnership? HELD: Yes. 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 who was petitioner's brother. 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. Given the preceding FACTS, it is clear that there was, among petitioner, Chua and Yao, a partnership engaged in the fishing business. They purchased the boats, which constituted the main assets of the partnership, and they agreed that the proceeds from the sales and operations thereof would be divided among them.

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EVANGELISTA & CO v. ABAD SANTOS (G.R. No. 31684; June 28, 1973) Doctrine: It is not disputed that the provision against the industrial partner engaging in business for himself seeks to prevent any conflict of interest between the industrial partner and the partnership, and to insure faithful compliance by said partner with this prestation. Facts: On Octorber 09, 1954, a co-partnership was formed named Evangelista and Co. On June 07, 1955, the Articles of the Co-partnership was amended in order to include herein respondent Estrella Abad Santos as an industrial partner. Furthermore, in the said amended article, it was agreed upon that the profits and losses shall be divided as follows: (1) 70% for the first three (3) partners; and (2) 30% for respondent Estrella Abad Santos. On December 17, 1963, herein respondent filed suit against the three other partners in the Court of First Instance of Manila, alleging that the partnership, which was also made a party-defendant, had been paying dividends to the partners except to her; and that notwithstanding her demands the defendants had refused and continued to refuse and let her examine the partnership books or to give her information regarding the partnership affairs to pay her any share in the dividends declared by the partnership. She therefore prayed that the defendants be ordered to render accounting to her of the partnership business and to pay her corresponding share in the partnership profits after such accounting, plus attorney's fees and costs. The defendants, in their answer, alleged the following: (1) the amended Articles of Co-partnership did not express the true agreement of the parties, which was that the plaintiff was not an industrial partner; (2) that she did not in fact contribute industry to the partnership; and (3) that her share of 30% was to be based on the profits which might be realized by the partnership only until full payment of the loan which it had obtained in December, 1955 from the Rehabilitation Finance Corporation in the sum of P30,000, for which the plaintiff had signed a promisory note as co-maker and mortgaged her property as security; and (4) that in any event the respondent (as a Judge of the City Court of Manila)was lawfully (See Article 1789) excluded from, and deprived of, her alleged share, interests and participation, as an alleged industrial partner, in the partnership Evangelista & Co., and its profits or net income. Issue: 1.) Whether or not the respondent Estrella Abad Santos is an industrial partner or merely a profit sharer (as alleged by petitioners) entitled to 30% of the net profits that may be realized by the partnership from June 07, 1955 until her mortgage loan shall be fully paid?

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2.) Whether or not respondent as a Judge of the City Court of Manila is engaged in business and thereby lawfully excluded and deprived of, her alleged share, interests and participation, as an alleged industrial partner, in the partnership Evangelista & Co., and its profits or net income pursuant to Article 1789. Ruling: 1.) The Supreme Court affirmed the facts concluded by the Court of Appeals that respondent Estrella Santos is an industrial partner because the Articles of the co-partnership indubitably show the respondent is an industrial partner. Also by the fact that from June 7, 1955 up to the filing of their answer to the complaint on February 8, 1964 or a period of over eight (8) years appellants did nothing to correct the alleged false agreement of the parties contained in the same. 2.) It is not disputed that the provision against the industrial partner engaging in business for himself seeks to prevent any conflict of interest between the industrial partner and the partnership, and to insure faithful compliance by said partner with this prestation. There is no pretense, however, even on the part of the appellee is engaged in any business antagonistic to that of appellant company, since being a Judge of one of the branches of the City Court of Manila can hardly be characterized as a business. The Supreme Court further held: What has gone before persuades us to hold with the lower Court that appellee is an industrial partner of appellant company, with the right to demand for a formal accounting and to receive her share in the net profit that may result from such an accounting, which right appellants take exception under their second assigned error. Our said holding is based on the following article of the New Civil Code: 'ART. 1899. Any partner shall have the right to a formal account as to partnership affairs: (1) If he is wrongfully excluded from the partnership business or possession of its property by his co-partners; (2) If the right exists under the terms of any agreement; (3) As provided by article 1807; (4) Whenever other circumstance render it just and reasonable. We find no reason in this case to depart from the rule which limits this Court's appellate jurisdiction to reviewing only errors of law, accepting as conclusive the factual findings of the lower court upon its own assessment of the evidence.

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MOBIL OIL PHILIPPINES, INC., petitioner, vs. COURT OF FIRST INSTANCE OF RIZAL, BRANCH VI, GEMINIANO F. YABUT and AGUEDA ENRIQUEZ YABUT, respondents (G.R. No. 40457 May 8, 1992) Facts: On November 8, 1972, petitioner Mobil Oil filed a complaint in the CFI of Rizal against the partnership La Mallorca and its general partners, which included private respondents for collection of a sum of money arising from gasoline purchased on credit but not paid, for damages and attorneys fees. On December 22, 1972, Mobil, with leave of court filed an Amended complaint impleading the heirs of the deceased partners as defendants. During the hearing, the parties agreed to submit the case for decision on the basis of evidence on record adduced by petitioner but to exclude past interest in the amount of P150, 000 and to award nominal attorneys fees. On 25 July 1974, a decision was rendered in favor of petitioner. Private respondents filed a petition to modify decision and a petition for reconsideration. The petition was predicated on the following: 1. That there was no stipulation or agreement of the parties on the award of attys fees 2. That Miguel Enriquez, not being a general partner, could not bind the partnership in the sales agreement he signed with plaintiff and 3. That defendant Geminiano Yabut already withdrew as partner and pres of La Mallorca on Sept 14, 1972. The court issued its disputed order declaring null and void its decision insofar as priv respondents are concerned on the ground that there was no evidence to show that the counsel for the defendants had been authorized by their clients to enter into a stipulation of facts with petitioner. Petitioner filed a motion for reconsideration and clarification, seeking the recon of such order, hence this petition. Issue: whether or not public respondent court acted with grave abuse of discretion amounting to lack of jurisdiction in declaring null and void its earlier decision Ruling: The Court finds merit in the instant petition. The records show that petitioner had already adduced evidence and formally offered its evidence in court; that during the hearing for the presentation of defendants evidence the parties, through their counsels, MUTUALLY agreed to the waiver of the presentation of defendants evidence on the one hand, and the waiver Page 18 of 22

of past interest on the part of the plaintiff and the payment of only nominal attys fees. There has been a mutual waiver by the parties. The counsels hadthe implied authority to do all acts necessary or incidental to the prosecution and management of the suit in behalf of their clients who were all present and never objected to the disputed order of the respondent court. Moreover, the court does not find the grounds relied upon in the petition of the private respondents. Mr Miguel Enriquez automatically became general partner of the partnership La Mallorca being one of the heirs of the deceased partner Mariano Enriquez. The Article of Co-Partnership of La Mallorca provides if during the existence of the co-partnership, any of the herein petitioners should die, the copartnership shall continue to exist amongst the surviving partners and the heir or heirs of the deceased partners As to respondent Yabuts claim that he cannot be liable as partner, he having withdrawn as such, does not convince the court. The debt was incurred long before his withdrawal as partner and long before his resignation from the partnership. He could not just withdraw unilaterally to avoid his liability as a general partner to third persons.

G.R. No. 85494 May 7, 1991 CHOITHRAM JETHMAL RAMNANI AND/OR NIRMLA V. RAMNANI and MOTI G. RAMNANI,petitioners, vs.COURT OF APPEALS, SPOUSES ISHWAR JETHMAL RAMNANI, SONYA JETHMAL RAMNANI and OVERSEAS HOLDING CO., LTD., respondents. G.R. No. 85496 May 7, 1991 SPOUSES ISHWAR JETHMAL RAMNANI AND SONYA JET RAMNANI, petitioners, vs. THE HONORABLE COURT OF APPEALS, ORTIGAS & CO., LTD. PARTNERSHIP, and OVERSEAS HOLDING CO., LTD., respondents. FACTS: Ishwar Jethmal Ramnani and his wife Sonya had their main business based in New York. Ishwar received US $150,000.00 from his father-in-law in Switzerland. In 1965, Ishwar Jethmal Ramnani sent the amount of US $150,000.00 to Choithram in two bank drafts of US$65,000.00 and US$85,000.00 for the purpose of investing the same in real estate in the Philippines. Subsequently, spouses Ishwar executed a general power of attorney appointing Ishwars full blood brothers Choithram and Navalrai as attorneys-in-fact,

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empowering them to manage and conduct their business concerns in the Philippines. Choithram, as attorney-in-factr, entered into two agreements for the purchase of two parcels of land located in Pasig Rizal from Ortigas & Company, Ltd. Partnership (Ortigas Ltd.) with a total area of approximately 10,048 square meters. Three buildings were constructed thereon and were leased out by Choithram as attorney-in-fact of spouses Ishwar. Two of these buildings were later burned. In 1970 Ishwar asked Choithram to account for the income and expenses relative to these properties during the period 1967 to 1970. Choithram failed and refused to render such accounting which prompted Ishwar to revoke the general power of attorney. Choithram and Ortigas Ltd. were duly notified by notice in writing of such revocation. It was also registered with the Securities and Exchange Commission and published in The Manila Times. Nevertheless, Choithram as such attorney-in-fact of Ishwar, transferred all rights and interests of Ishwar spouses in favor of Nirmla Ramnani, the wife of Choitrams son, Moti. Ortigas also executed the corresponding deeds of sale in favor of Nirmla and the TCT ISSUEd in her favour.. Thus, spouses Ishwar filed a complaint in the Court of First Instance of Rizal against Choithram and spouses Nirmla and Moti (Choithram et al.) and Ortigas Ltd. for reconveyance of said properties or payment of its value and damages. Trial court dismissed the complaint ruling that the lone testimony of Ishwar regarding the cash remittance is unworthy of faith and credit because the cash remittance was made before the execution of the general power of attorney. Ishwar also failed to corroborate this lone testimony and did not exhibit any commercial document as regard to the alleged remittances. It believed the claim of Choitram that he and Ishwar entered into a temporary arrangement in order to enable Choithram, then a British citizen, to purchase the properties in the name of Ishwar who was an American citizen and who was then qualified to purchase property in the Philippines under the then Parity Amendment. Upon appeal, the CA reversed the decision and gave credence to Ishwar. It upHELD the validity of Ishwars testimony and gave cognizance to a letter written by Choihtram imploring Ishwar to renew the power of attorney after it was revoked. It states therein that Choithram reassures his brother that he is not after his money Page 20 of 22

and that the revocation is hurting the reputation of Ishwar. Choithram also made no mention of his claimed temporary arrangement in the letter.. The CA ruled that Choithram is also estopped in pais or by deed from claiming an interest over the properties. Because of Choitrams admissions from (1) power of attorney, (2) the Agreements, and (3) the Contract of Lease It furthermore HELD that Choithram's 'temporary arrangement, by which he claimed purchasing the two (2) parcels in question in 1966 and placing them in the name of Ishwar who is an American citizen circumvents the disqualification provision of aliens acquiring real properties in the Philippines. Upholding the supposed "temporary arrangement" with Ishwar would be sanctioning the perpetration of an illegal act and culpable violation of the Constitution. During the pendency of the case, Choithram made several attempts to dispose of his properties by way of donation and also mortgaged the properties under litigation for 3 million USD to a shell partnership with a mere capital of 100 USD. The Supreme Court affirms the findings of the Court of Appeals. ISSUE: Whether or not there was a partnership between the brothers Ishwar and Choithram HELD: Yes, Even without a written agreement, the scenario is clear. Spouses Ishwar supplied the capital of $150,000.00 for the business. They entrusted the money to Choithram to invest in a profitable business venture in the Philippines. For this purpose they appointed Choithram as their attorney-in-fact. Choithram in turn decided to invest in the real estate business. He bought the two (2) parcels of land in question from Ortigas as attorney-in-fact of Ishwar- Instead of paying for the lots in cash, he paid in installments and used the balance of the capital entrusted to him, plus a loan, to build two buildings. Although the buildings were burned later, Choithram was able to build two other buildings on the property. He rented them out and collected the rentals. Through the industry and genius of Choithram, Ishwar's property was developed and improved into what it is nowa valuable asset worth millions of pesos. We have a situation where two brothers engaged in a business venture. One furnished the capital, the other contributed his industry and talent. Justice and equity dictate that the two share equally the fruit of their joint investment and efforts. Perhaps this Solomonic solution may pave the way towards their reconciliation. Both would stand to gain. No one would end up the loser. After all, blood is thicker than water. However, because of the devious machinations and schemes that Choithram employed he should pay moral and exemplary damages as well as attorney's fees to spouses Ishwar. Page 21 of 22

ISSUE: Whether or not Ortigas Ltd. is liable.

HELD: Yes, because Ortigas had several notices of the revocation. Despite said notices, Ortigas nevertheless acceded to the representation of Choithram, as alleged attorney-in-fact of Ishwar, to assign the rights of petitioner Ishwar to Nirmla. While the primary blame should be laid at the doorstep of Choithram, Ortigas is not entirely without fault. It should have required Choithram to secure another power of attorney from Ishwar. For recklessly believing the pretension of Choithram that his power of attorney was still good, it must, therefore, share in the latter's liability to Ishwar.

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