Fernandez vs.

De La Rosa, February 3, 1903

Facts: The Fernandez, the plaintiff, alleged that in January, 1900, he entered into a verbal agreement with De La Rosa, the defendant, to form a partnership for the purchase of cascoes and the carrying on of the business of letting the same for hire in Manila. They also agreed that the profit that will be derived from this partnership will be distributed among them proportionately. The plaintiff furnished the defendant 300 and 825 pesos to purchase a casco designated as No. 1515 and No. 2089 respectively. The defendant did purchase of these two cascoes for 500 and 1000 pesos respectively taking the title of these cascoes in his own name. Marcos Angulo, a partner of the plaintiff in a bakery business, being also a party to the negotiations denied that any agreement was ever consummated. The plaintiff made a demand for an accounting upon him, which the defendant refused to render, denying the existence of the partnership.

Issue/s: Did a partnership exist between the parties? If such partnership existed, was it terminated as a result of the act of the defendant in receiving back the 1,125 pesos?

Decision: This case has been decided on appeal in favor of the plaintiff and the defendant has moved for a rehearing upon the following grounds: o Because that part of the decision which refers to the existence of the partnership which is the object of the complaint is not based upon clear and decisive legal grounds; and o Because, upon the supposition of the existence of the partnership, the decision does not clearly determine whether the juridical relation between the partners suffered any modification in consequence of the withdrawal by the plaintiff of the sum of 1,125 pesos from the funds of the partnership, or if it continued as before, the parties being thereby deprived, he alleges, of one of the principal bases for determining with exactness the amount due to each RTXf.

Duterte vs. Rallos, September 24, 1903

Facts: In a letter made by the defendant, he wrote that he just admitted Rallos into the cockpit partnership to collect what Rallos owe him. It was clearly stated that Duterte was indebted to Rallos for one thousand pesos. The plaintiff rendered services in the management of the cockpit, and that the defendant paid him money on account of the cockpit, is undisputed. The profits were divided. A portion was given to two friends, Seores Duterte and Castro, but not as partners. A portion was given to Seor Duterte solely because he was a friend who aided and encouraged the cockpit. Duterte said that he only paid them for his pleasure, as friends. He also added that he had no legal interest. Castro, the other supposed partner, denied that he was such a partner. He said that Rallos sent him the money because he went to the cockpit to aid the president.

Issue/s: Did a partnership exist between the parties?

Decision: The finding of fact by the court below, that there was no partnership, at least to September 1, 1901, was plainly and manifestly against the evidence, and for that reason a new trial of this case must be had. In this new trial, if the evidence is the same as upon the first trial, the plaintiff will be entitled to an accounting, at least to September 1, 1901, and for such further term as the proof upon the new trial shows, in the opinion of the court below, that the partnership existed; that accounting can be had in this suit and a final judgment rendered for the plaintiff if any balance appears in his favor. No second or other suit will be necessary. The judgment of the court below is reversed and the case remanded for a new trial, with the costs of this instance against the appellee, and after the expiration of twenty days, reckoned from the date of this decision, judgment shall be rendered accordingly, and the case is returned to the court below for compliance therewith.

Evangelista vs. the Collector of Internal Revenue, October 15, 1957

Facts: That the petitioners borrowed from their father the sum of P59,1400.00 which amount together with their personal monies was used by them for the purpose of buying real properties. That in a document dated August 16, 1945, they appointed their brother Simeon Evangelista to 'manage their properties with full power to lease; to collect and receive rents; to issue receipts therefor; in default of such payment, to bring suits against the defaulting tenants; to sign all letters, contracts, etc., for and in their behalf, and to endorse and deposit all notes and checks for them; That after having bought the above-mentioned real properties the petitioners had the same rented or leases to various tenants; The records show that petitioners have habitually engaged in leasing the properties above mentioned for a period of over twelve years, and that the yearly gross rentals of said properties from June 1945 to 1948 ranged from P9,599 to P17,453. Thus, they are subject to the tax provided in section 193 (q) of our National Internal Revenue Code, for "real estate dealers,".

Issue/s: The issue in this case whether petitioners are subject to the tax on corporations provided for in section 24 of Commonwealth Act. No. 466, otherwise known as the National Internal Revenue Code, as well as to the residence tax for corporations and the real estate dealers fixed tax. With respect to the tax on corporations, the issue hinges on the meaning of the terms "corporation" and "partnership,". Decision: For purposes of the tax on corporations, our National Internal Revenue Code includes these partnerships with the exception only of duly registered general co-partnerships within the purview of the term "corporation." It is, therefore, clear to our mind that petitioners herein constitute a partnership, insofar as said Code is concerned and are subject to the income tax for corporations. Wherefore, the appealed decision of the Court of Tax appeals is hereby affirmed with costs against the petitioners herein. It is so ordered.

Rojas vs. Maglana, December 10, 1990

Facts: There was a partnership at the very beginning called Eastcoast Development Enterprises (EDE), being Maglana as the managing partner and Rojas as the logging superintendent. There was no operation of the partnership during the period from January 14, 1955 to April 30, 1956. Because of the difficulties encountered, the partners decided to avail of the services of Pahamotang as industrial partner and new partnership was created. The partners executed a document entitled Conditional Sale of Interest in the Partnership, Eastcoast Development Enterprise, agreeing among themselves that Maglana and Rojas shall purchase the interest, share and participation in the Partnership of Pahamotang assessed in the amount of P31,501.12. Rojas entered into a management contract with amother logging enterprise, the CMS Estate, Inc. He left and abandoned the partnership. Maglana wrote Rojas reminding the latter of his obligation to contribute, either in cash or in equipment, to the capital investments of the partnership as well as his obligation to perform his duties as logging superintendent but Rojas told him that he will not be able to comply with his obligations. Rojas took funds from the partnership more than his contribution. Thus, in a letter dated February 21, 1961, Maglana notified Rojas that he dissolved the partnership.

Issue/s: The nature of partnership and the legal relations of Maglana and Rojas after the dissolution of the second partnership; Their sharing basis: whether in proportion to their contribution or share and share alike; The ownership of properties bought by Maglana in his wife's name; The damages suffered and who should be liable for them; and The legal effect of the letter dated February 23, 1961 of Maglana dissolving the partnership. Decision: the partnership of the defendant and the plaintiff is one of a de facto and at will;

the sharing of profits and losses is on the basis of actual contributions the plaintiff's share will be on the basis of his actual contribution and, considering his indebtedness to the partnership, the plaintiff is not entitled to any share in the profits of the said partnership;

the Court declares that there is no evidence that these properties were acquired by the partnership funds, and therefore the same should not belong to the partnership; the Court declares that neither parties is entitled to damages, for as already stated above it is not a wise policy to place a price on the right of a person to litigate and/or to come to Court for the assertion of the rights they believe they are entitled to;

the Court declares that the letter of the defendant to the plaintiff dated February 23, 1961, in effect dissolved the partnership;

The assailed decision of the Court of First Instance of Davao, Branch III, is hereby modified in the sense that the duly registered partnership of Eastcoast Development Enterprises continued to exist until liquidated and that the sharing basis of the partners should be on share and share alike as provided for in its Articles of Partnership, in accordance with the computation of the commissioners. The court also hereby affirms the decision of the trial court in all other respects.

Ejercito vs. M.R. Vargas Construction, April 10, 2008

Facts: The City Government of Quezon City, represented by Mayor Feliciano Belmonte, Jr., entered into a construction contract[4] with M.R. Vargas Construction, represented by Marcial Vargas in his capacity as general manager of the said business enterprise, for the improvement and concreting of Panay Avenue. Claiming that the clearing operations lacked the necessary permit and prior consultation, petitioners Bienvenido Ejercito and Jose Martinez, as well as a certain Oscar Baria, brought the matter to the attention of the barangay authorities, Mayor Belmonte, Senator Ma. Ana Consuelo A.S. Madrigal, the Department of Environment and Natural Resources and the Philippine Coconut Authority The efforts of petitioners proved unsuccessful. Hence, on 10 September 2004, they filed a petition for injunction before the Quezon City RTC. The petition named "M.R. Vargas Construction Co., represented by herein Marcial R. Vargas and Renato Agarao," as respondent The petition was accompanied with an application for a temporary restraining order (TRO) and a writ of preliminary injunction.[11] Thus, the Office of the Clerk of Court forthwith issued summons and notice of raffle on 10 September 2004.[12] Upon service of the processes on the aforementioned address, they were returned unserved on the ground that respondent enterprise was unknown thereat. Issue/s: Whether the trial court acquired jurisdiction over respondent enterprise. Whether the defense of lack of jurisdiction had been waived.

Decisions: Wherefore, the instant petition for certiorari is denied. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 89001 are affirmed in toto. Costs against petitioners. The temporary restraining order issued in this case is dissolved.

Obillos vs. Commissioner of Internal Revenue, October 29, 1985

Facts: Jose Obillos,Sr. transferred his rights to his four children, the petitioners, to enable them to build their residences. The company sold the two lots to petitioners for P178,708.12 on March 13. Presumably, the Torrens titles issued to them would show that they were co-owners of the two lots. After having held the two lots for more than a year, the petitioners resold them to the Walled City Securities Corporation and Olga Cruz Canda for the total sum of P313,050 and divide it among themselves. They treated the profit as a capital gain and paid an income tax on one-half thereof. The Commissioner of Internal Revenue required the four petitioners to pay corporate income tax on the total profit of P134, 336 in addition to individual income tax on their shares thereof. CIR considered the share of the profits of each petitioner in the sum of P33,584 as a "taxable in full and required them to pay deficiency income taxes aggregating P56,707.20 including the 50% fraud surcharge and the accumulated interest. Petitioners original purpose was to divide the lots for residential purposes. If later on they found it not feasible to build their residences on the lots because of the high cost of construction, then they had no choice but to resell the same to dissolve the coownership. The division of the profit was merely incidental to the dissolution of the coownership which was in the nature of things a temporary state. It had to be terminated sooner or later.

Issue/s: The Commissioner alleged that the four petitioners had formed an unregistered partnership or joint venture so they are entitled to pay additional taxes.

Decision: The judgment of the Tax Court is reversed and set aside. The assessments are cancelled. No costs.