agency, partnership, trust
TRANSCRIPT
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;S=B8S3=O, 5R S CODR OF =PP;=3S
Facts: he petitioner and pri+ate respondents are brothers and sisters who are cooint affida+it was e)ecuted by them on =pril ##, #/(( he respondents agreed to help their brother,
petitioner therein, by allowing him to operate and manage the gasoline ser+ice station of the family 8n order
not to run counter to the company*s policy of appointing only one dealer, it was agreed that petitioner would
apply for the dealership Respondent Remedios helped in coect
to proper audit
"%$ o pay the plaintiffs their lawful shares and participation in the net profits of the business and
"-$ o pay the plaintiffs attorney*s fees and costs of the suit
8ssue: Can a partnership e)ist between members of the same family arising from their >oint ownership ofcertain propertiesA
rial Court: he complaint "of the respondents$ was dismissed Hut upon a motion for reconsideration of the
decision, another decision was rendered in fa+our of the respondents
C=: =ffirmed in toto
Petitioner: he C= erred in interpreting the legal import of the 5oint =ffida+it +is
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should be for in the latter document, S;33 was a signatory and it would be against their policy if in the
agreement it should be stated that the business is a partnership with pri+ate respondents and not a sole
proprietorship of the petitioner Furthermore, there are other e+idences in the record which show that there was
in fact such partnership agreement between parties he petitioner submitted to the pri+ate respondents
periodic accounting of the business and ga+e a written authority to the pri+ate respondent Remedios
;stanislao to e)amine and audit the booGs of their 2common business4 "aming negosyo$ he respondent
Remedios, on the other hand, assisted in the running of the business 8ndeed, the parties hereto formed a
partnership when they bound themsel+es to contribute money in a common fund with the intention of di+iding
the profits among themsel+es
38! OBJ 38! S P838PP8B; F8S8BJ J;=R8B.DSR8;S 8BC
F=CS: On behalf of 2Ocean Euest Fishing Corp4 =ntonio Chua and Peter Yao entered into a contract with
Phil Fishing Jear "PFJ8$ for the purchase of fishing nets hey claimed they were engaged in a business
+enture with petitioner 3im who was not a signatory to the agreement Chua and Yao failed to pay for the nets
and floats PFJ8 filed a collection suit against Chua, Yao and 3im as general partners alleging that Ocean
Euest was none)istent Chua filed a !anifestation admitting liability and re?uesting reasonable time to pay
Yao filed an answer wai+ing his right to cross
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RC: .;B8;. he plaintiff ne+er ?uestioned recei+ing from =C =guila M Sons, Co the sum of P'&&,&&&&&
representing her loan from the defendant Common sense dictates that an established lending and realty firm
liGe =guila would not part with Php'&&,&&&&& to the spouses, who are +irtual strangers to it, withou
simultaneous accomplishment and signing of all the re?uired documents, more particularly the .eed o
=bsolute Salem to protect its interest
C=: R;;RS;. he transaction between the parties is indubitably an e?uitable mortgage Considering that
the pri+ate respondent "+endor$ was paid the price which is unusually inade?uate "'-& s? m subdi+ision lo
for only Php'&&,&&&&& in the year#//#$, has retained possession of the property and has continued payingreal ta)es o+er the sub>ect property
Petitioner: #e is not the real party in interest but = C =guila M Sons, Co
'he >udgment in the e>ectment case is a bar to the filing of the complaint for declaration of nullity of a deed of
sale in this case and
%he contract between the parties is a pact ode retro sale and not an e?uitable mortgage
eld: he petition is meritorious = real party in interest is one who would be benefited or in>ured by the
>udgment, or who is entitled to the a+ails of the suit !oreo+er, under =rticle #0(9 of the Bew Ci+il Code, a
partnership 2has a >uridical personality separate and distinct from that of each of the partners4 he partners
cannot be held liable for the obligations of the partnership unless it is shown that the legal fiction of a different
>uridical personality is being used for fraudulent, unfair, or illegal purposes 8n this case, the pri+ate respondent
has not shown that =C =guila M Sons, Co, as a separate >uridical entity, is being used for fraudulent, unfair o
illegal purposes !oreo+er, the title to the sub>ect property is in the name of =C =guila M Sons, Co and the
!O= was e)ecuted between the pri+ate respondent, with the consent of her husband, and =C =guila MSons
Co, represented by the petitioner ence, it is the partnership, not its officers or agents, which should be
impleaded in any litigation in+ol+ing property registered in its name @e cannot understand why both the RC
and the C= sidestepped this issue when it was s?uarely raised before them by the petitioner he court*s
conclusion is that the petitioner is not the real party in interest against whom this action should be prosecuted
8t is unnecessary to discuss the other issues raised by him in his appeal
;8RS OF =B ;BJ N;;,
petitioners,
+s
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CODR OF =PP;=3S and H;BJD; 3D!H;R CO!P=BY, represented
byits President =B ;BJ 3=Y,
respondents,
JR Bo #'(99#, October %, '&&&
Following the death of an ;ng Nee, the commonoined by their children collecti+ely
Gnown asherein petitioners ;8RS OF =B ;BJ N;;, filed suit
against the decedents brother =B ;BJ 3=Y for accounting,
li?uidationand winding up of the alleged partnership formed
after @orld @ar 88 between an ;ng Nee and an ;ng 3ay
Facts:
he complaint alleged that after the second @orld @ar, an
;ng Nee and an ;ng 3ay, pooling their resources
andindustry together, entered into a partnership engaged in
the business of selling lumber and hardware and
constructionsupplies hey named their enterprise QHenguet
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3umberQ which they >ointly managed until an ;ng Nees
deathPetitioners claimed that an ;ng 3ay and his children
caused the con+ersion of the partnership QHenguet 3umberQ
into acorporation called QHenguet 3umber CompanyQ
Petitioners prayed for accounting of the partnership
assets, and thedissolution, winding up and li?uidation
thereof, and the e?ual di+ision of the net assets of
Henguet 3umberhe RC ruled in fa+or of petitioners,
declaring that Henguet 3umber is a >oint +enture which is
aGin to a particularpartnership he Court of =ppeals
rendered the assailed decision re+ersing the >udgment of
the trial court
8ssue:
@hether or not an ;ng Nee and an ;ng 3ay were partners in
Henguet 3umber
eld: BO
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he trial court determined that an ;ng Nee and an ;ng 3ay
had entered into a >oint +enture, which it said isaGin to a
particular partnership = particular partnership is
distinguished from a >oint ad+enture, to wit:"a$ = >oint
ad+enture "an =merican concept similar to our >oint
accounts$ is a sort of informal partnership, with no
firmname and no legal personality 8n a >oint account, the
participating merchants can transact business under their
ownname, and can be indi+idually liable therefor"b$
Dsually, but not necessarily a >oint ad+enture is limited
to a S8BJ3; R=BS=C8OB, although the business of
pursuingto a successful termination may continue for a
number of years a partnership generally relates to a
continuing business of +arious transactions of a certain
Gind= >oint +enture Qpresupposes generally a parity of
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standing between the >oint co
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unnatural, that despite the forty years the partnership was
allegedly in e)istence, an ;ngNee ne+er asGed for an
accounting
he essence of a partnership is that the partners share in
the profits and losses ;achhas the right to demand an
accounting as long as the partnership e)ists
= demand for periodic accounting is e+idence of
apartnership .uring his lifetime, an ;ng Nee appeared
ne+er to ha+e made any such demand for accounting from
hisbrother, ang ;ng 3ay@e conclude that an ;ng Nee was
only an employee, not a partner ;+en if the payrolls as
e+idence were discarded,petitioners would still be bacG to
s?uare one, so to speaG, since they did not present and
offer e+idence that would showthat an ;ng Nee recei+ed
amounts of money allegedly representing his share in the
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profits of the enterprise
here being no partnership, it follows that there is no
dissolution, winding up or li?uidation to speaG of ence,
the petition must fail
'$ ;8RS OF =B ;BJ N;;,
petitioners, +s
CODR OF =PP;=3S and H;BJD; 3D!H;R CO!P=BY,represented by
its President =B ;BJ 3=Y,
respondents
JR Bo #'(99# October %, '&&&.; 3;OB, 5R,
5
:F=CS:
=fter the second @orld @ar, an ;ng Nee and an ;ng 3ay,
pooling their resources and industry together, enteredinto
a partnership engaged in the business of selling lumber and
hardware and construction supplies hey namedtheir
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enterprise QHenguet 3umberQ which they >ointly managed
until an ;ng Nees death Petitioners herein a+erredthat
the business prospered due to the hard worG and thrift of
the alleged partners owe+er, they claimed that in#/9#,
an ;ng 3ay and his children caused the con+ersion of the
partnership QHenguet 3umberQ into a corporationcalled
QHenguet 3umber CompanyQ he incorporation was purportedly
a ruse to depri+e an ;ng Nee and his heirsof their
rightful participation in the profits of the business
Petitioners prayed for accounting of the partnership
assets,and the dissolution, winding up and li?uidation
thereof, and the e?ual di+ision of the net assets of
Henguet 3umber
8SSD;:
whether an ;ng Nee and an ;ng 3ay were partners in
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Henguet 3umber
;3.:
hus, in order to constitute a partnership, it must be
established that "#$ two or more persons bound themsel+es
tocontribute money, property, or industry to a common fund,
and "'$ they intend to di+ide the profits amongthemsel+es
he agreement need not be formally reduced into writing,
since statute allows the oral constitution of a
partnership, sa+e in two instances: "#$ when immo+able
property or real rights are contributed, and "'$ when
thepartnership has a capital of three thousand pesos or
more 8n both cases, a public instrument is re?uired
=nin+entory to be signed by the parties and attached to the
public instrument is also indispensable to the +alidity of
thepartnership whene+er immo+able property is contributed
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to the partnershiphe trial court determined that an ;ng
Nee and an ;ng 3ay had entered into a >oint +enture, which
it said is aGin toa particular partnership = particular
partnership is distinguished from a >oint ad+enture, to
wit:"a$ = >oint ad+enture "an =merican concept similar to
our >oint accounts$ is a sort of informal partnership,with
no firm name and no legal personality 8n a >oint account,
the participating merchants can transactbusiness under
their own name, and can be indi+idually liable therefor"b$
Dsually, but not necessarily a >oint ad+enture is limited
to a S8BJ3; R=BS=C8OB, although thebusiness of pursuing
to a successful termination may continue for a number of
years a partnershipgenerally relates to a continuing
business of +arious transactions of a certain Gind= >oint
+enture Qpresupposes generally a parity of standing between
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the >oint co
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care of his concerns8n determining whether a partnership
e)ists, these rules shall apply:"#$ ;)cept as pro+ided by
=rticle #9'6, persons who are not partners as to each other
are not partners as tothird persons"'$ Co
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wages of an employee or rent to a landlord"c$ =s an
annuity to a widow or representati+e of a deceased
partner"d$ =s interest on a loan, though the amount of
payment +ary with the profits of the business"e$ =s the
consideration for the sale of a goodwill of a business or
other property by installments or otherwise8n the light of
the afore?uoted legal pro+ision, we conclude that an ;ng
Nee was only an employee, not a partner;+en if the
payrolls as e+idence were discarded, petitioners would
still be bacG to s?uare one, so to speaG, since theydid not
present and offer e+idence that would show that an ;ng Nee
recei+ed amounts of money allegedlyrepresenting his share
in the profits of the enterprise Petitioners failed to
show how much their father, an ;ng Nee
recei+ed, if any, as his share in the profits of Henguet
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ac?uired by;lfledo and respondent form part of theestate of
5ose, ha+ing been deri+ed from thealleged partnership8:
@LB ;lfledo is a partner of the said trucGingcompany:
T
he court applying #0(/ of the Ci+ilCode held that ;lfledo
is a partner
T
Cresencia 3im testified that >ose ga+e;lfledo 6&G, as share
in thepartnership, on a date that coincidedwith the payment
of the initial capitalof the partnership
T
;lfledo ran the affairs of thepartnership, wielding
absolute control,power and authority, withoutinter+ention
or opposition whatsoe+erof the petitioners herein
T
=ll the properties particularly the /trucGs of the
partnership wereregistered in the name of ;lfledo
T
5immy testified that ;lfledo did notrecei+e wages or
salaries from thepartnership, indicating that what
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heactually recei+ed were shares of theprofits of the
business
T
Bone of the petitioners, as heirs of 5ose, the alleged
partner, demandedperiodic accounting from ;lfledoduring his
lifetime
B=CDR=, 5:
F=CS: Petitioners are the heirs of the late 5ose 3im
"5ose$ hey filed a Complaint for Partition, =ccounting
and .amages against respondent 5uliet illa 3im
"respondent$, widow of the late ;lfledo 3im ";lfledo$, who
was the eldest son of 5ose and Cresencia
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Petitioners alleged that 5ose was the liaison officer of
8nterwood Sawmill in Cagsiay, !auban, Euezon Sometime in
#/9&, 5ose, together with his friends 5immy Yu "5immy$ and
Borberto Dy "Borberto$, formed a partnership to engage in
the trucGing business 8nitially, with a contribution of
P6&,&&&&& each, they purchased a trucG to be used in the
hauling and transport of lumber of the sawmill 5ose
managed the operations of this trucGing business until his
death on =ugust #6, #/9# hereafter, 5oses heirs,
including ;lfledo, and partners agreed to continue the
business under the management of ;lfledo he shares in the
partnership profits and income that formed part of the
estate of 5ose were held in trust by ;lfledo, with
petitioners authority for ;lfledo to use, purchase or
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ac?uire properties using said funds Petitioners alleged
that ;lfledo was ne+er a partner or an in+estor in the
business and merely super+ised the purchase of additional
trucGs using the income from the trucGing business of the
partners
On !ay #9, #//6, ;lfledo died, lea+ing respondent as his
sole sur+i+ing heir Petitioners claimed that respondent
tooG o+er the administration of the aforementioned
properties, which belonged to the estate of 5ose, without
their consent and appro+al Claiming that they are cooint efforts and hard worG, and
without any participation or contribution from petitioners
or from 5ose
8SSD;: @hether or not a partnership e)ists
;3.: Y;S = partnership e)ists when two or more persons
agree to place their money, effects, labor, and sGill in
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lawful commerce or business, with the understanding that
there shall be a proportionate sharing of the profits and
losses among them = contract of partnership is defined by
the Ci+il Code as one where two or more persons bind
themsel+es to contribute money, property, or industry to a
common fund, with the intention of di+iding the profits
among themsel+es
he following circumstances tend to pro+e that ;lfledo was
himself the partner of 5immy and Borberto: #$ Cresencia
testified that 5ose ga+e ;lfledo P6&,&&&&&, as share in
the partnership, on a date that coincided with the payment
of the initial capital in the partnership "'$ ;lfledo ran
the affairs of the partnership, wielding absolute control,
power and authority, without any inter+ention or opposition
whatsoe+er from any of petitioners herein "%$ all of the
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properties were registered in the name of ;lfledo "-$
5immy testified that ;lfledo did not recei+e wages or
salaries from the partnership, indicating that what he
actually recei+ed were shares of the profits of the
business and "6$ none of the petitioners, as heirs of
5ose, the alleged partner, demanded periodic accounting
from ;lfledo during his lifetime
.octrine:
he sharing of gross returns does not of itself establish a
partnership, whether or not the persons sharing them ha+e a
>oint or common right or interest in any property from
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which the returns are deri+ed here must be an
unmistaGable intention to form a partnership or >oint
+enture
Facts:
For at least one year after their receipt of two parcels of
land from their father, petitioners resold said lots to the
@alled City Securities Corporation and Olga Cruz Canda, for
which they earned a profit of P#%-,%-#99 or P%%,69- for
each of them hey treated the profit as a capital gain and
paid an income ta) on one
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profit of P#%-,%%( in addition to indi+idual income ta) on
their shares thereof, a 6&U fraud surcharge and a -'U
accumulated interest Further, the Commissioner considered
the share of the profits of each petitioner in the sum of
P%%,69- as a Q ta)able in full "not a mere capital gain of
which is ta)able$ and re?uired them to pay deficiency
income ta)es aggregating P6(,0&0'& including the 6&U fraud
surcharge and the accumulated interest
he petitioners contested the assessments wo 5udges of
the a) Court sustained the same 5udge Roa?uin dissented
ence, the instant appeal
8ssue:
@hether or not petitioners ha+e indeed formed a partnership
or >oint +enture and thus, liable for corporate income ta)
eld:
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@e hold that it is error to consider the petitioners as
ha+ing formed a partnership under article #0(0 of the Ci+il
Code simply because they allegedly contributed P#09,0&9#'
to buy the two lots, resold the same and di+ided the profit
among themsel+es
o regard the petitioners as ha+ing formed a ta)able
unregistered partnership would result in oppressi+e
ta)ation and confirm the dictum that the power to ta)
in+ol+es the power to destroy hat e+entuality should be
ob+iated
=s testified by 5ose Obillos, 5r, they had no such
intention hey were co
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=rticle #0(/"%$ of the Ci+il Code pro+ides that Qthe
sharing of gross returns does not of itself establish a
partnership, whether or not the persons sharing them ha+e a
>oint or common right or interest in any property from
which the returns are deri+edQ here must be an
unmistaGable intention to form a partnership or >oint
+enture
@;R;FOR;, the >udgment of the a) Court is re+ersed and
set aside he assessments are cancelled Bo costs
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=CS: Carlos !endiola died on .ecember '9, #/9- and was
sur+i+ed by his spouse, Florentina and his children namely,
Reynaldo "herein petitioner$, Redentor, ;rnestina, ;dgardo,
!anuel, ;nrico, Ricardo, and !arilou all surnamed !endiola
"herein pri+ate respondents$
= petition for probate of the decedentVWXs will was filed
on !arch %&, #/90 with the RC
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filed by the petitioner but it was denied by the court
On appeal, the Court of =ppeals affirmed the >udgment of
the trial court hence, petitioner filed this petition for
re+iew he latter a+erred that his remo+al was not
supported by e+idence and he was not gi+en his day in
court
8SSD;: @as the remo+al of the petitioner as e)ecutor
properA
RD38BJ: Yes here was sufficient e+idence to support his
remo+al namely, his failure to pay the estate ta) and to
render an accounting of the estate and settle the same
according to law, and has in+ol+ed the other heirs in a
suit because of his own deeds hus, his remo+al was in
accordance with Section ', Rule 9' of the Rules of Court
which states that VWif an e)ecutor or administrator
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neglects to render his account and settle the estate
according to law, or to perform an order or >udgment of the
court, or a duty e)pressly pro+ided by these rules, or
absconds, or becomes insane, or otherwise incapable or
unsuitable to discharge the trust, the court may remo+e
him, or in its discretion, may permit him to resignVW
Dnder this pro+ision, the court which appointed the
e)ecutor has the discretion to remo+e the same