partnership secret

7/23/2019 Partnership Secret

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Belo V Ca

William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The threeagreed to form a joint venture for the sale of cooking ares. Belo as to contri!ute

"#.$ million% Tocao also contri!uted some cash and she shall also act as &residentand general manager% and Anay shall !e in charge of marketing. Belo and Tocaos&eci'cally asked Anay !ecause of her e(&erience and connections as a marketer.They agreed further that Anay shall receive the follo ing)

*. *+ share of annual net &ro'ts

#. - overriding commission for eekly sales

. + of sales Anay ill make herself

/. # share for her demo services

They o&erated under the name 0eminesse 1nter&rise, this name as ho everregistered as a sole &ro&rietorshi& ith the Bureau of 2omestic Trade underTocao. The joint venture agreement as not reduced to riting !ecause Anaytrusted Belo3s assurances.

The venture succeeded under Anay3s marketing &ro ess.

But then the relationshi& !et een Anay and Tocao soured. 4ne day, Tocao advisedone of the !ranch managers that Anay as no longer a &art of the com&any. Anaythen demanded that the com&any !e audited and her shares !e given to her.

56671) Whether or not there is a &artnershi&.

8192) :es, even though it as not reduced to riting, for a &artnershi& can !einstituted in any form. The fact that it as registered as a sole &ro&rietorshi& is of no moment for such registration as only for the com&any3s trade name.

Anay as not even an em&loyee !ecause hen they ventured into the agreement,they e(&licitly agreed to &ro't sharing this is even though Anay as receivingcommissions !ecause this is only incidental to her e;orts as a head marketer.

The 6u&reme Court also noted that a &artner ho is e(cluded rongfully from a&artnershi& is an innocent &artner. 8ence, the guilty &artner must give him his dueu&on the dissolution of the &artnershi& as ell as damages or share in the &ro'ts<reali=ed from the a&&ro&riation of the &artnershi& !usiness and good ill.> Aninnocent &artner thus &ossesses <&ecuniary interest in every e(isting contract that



as incom&lete and in the trade name of the co?&artnershi& and assets at the timehe as rongfully e(&elled.>

An unjusti'ed dissolution !y a &artner can su!ject him to action for damages!ecause !y the mutual agency that arises in a &artnershi&, the doctrine of delectus

personae allo s the &artners to have the power, although not necessarilythe right to dissolve the &artnershi&.

Tocao3s unilateral e(clusion of Anay from the &artnershi& is sho n !y her memo tothe Cu!ao o;ice &lainly stating that Anay as, as of 4cto!er @, *@ , no longer the

vice?&resident for sales of 0eminesse 1nter&rise. By that memo, &etitioner Tocaoe;ected her o n ithdra al from the &artnershi& and considered herself ashaving ceased to !e associated ith the &artnershi& in the carrying on of the!usiness. Nevertheless, the &artnershi& as not terminated there!y% it continuesuntil the inding u& of the !usiness.

Tocao V Ca #++*

N4T1) Motion for econsideration 'led !y Tocao and Belo decided !y the 6C on6e&tem!er #+, #++*.

Belo is not a &artner. Anay as not a!le to &rove that Belo in fact received &ro'tsfrom the com&any. Belo merely acted as a guarantor. 8is &artici&ation in the!usiness meetings as not as a &artner !ut as a guarantor. 8e in fact had onlylimited &artnershi&. Tocao also testi'ed that Belo received nothing from the&ro'ts. The 6u&reme Court also noted that the &artnershi& as yet to !eregistered in the 6ecurities and 1(change Commission. As such, it asunderstanda!le that Belo, ho as after all &etitioner Tocao3s good friend andcon'dante, ould occasionally &artici&ate in the a;airs of the !usiness, althoughnever in a formal or o;icial ca&acity.



TORRES v CA

5n *@-@, sisters Antonia Torres and 1meteria Baring entered into a joint ventureagreement ith Manuel Torres. 7nder the agreement, the sisters agreed toe(ecute a deed of sale in favor Manuel over a &arcel of land, the sisters received nocash &ayment from Manuel !ut the &romise of &ro'ts D-+ for the sisters and /+for ManuelE F said &arcel of land is to !e develo&ed as a su!division.

Manuel then had the title of the land transferred in his name and he su!seGuentlymortgaged the &ro&erty. 8e used the &roceeds from the mortgage to start !uildingroads, cur!s and gutters. Manuel also contracted an engineering 'rm for the

!uilding of housing units. But due to adverse claims in the land, &ros&ective !uyersere scared o; and the su!division &roject eventually failed.

The sisters then 'led a civil case against Manuel for damages eGuivalent to -+ of the value of the &ro&erty, hich according to the sisters, is hat3s due them as &erthe contract.

The lo er court ruled in favor of Manuel and the Court of A&&eals a;irmed thelo er court.

The sisters then a&&ealed !efore the 6u&reme Court here they argued that thereis no &artnershi& !et een them and Manuel !ecause the joint venture agreementis void.

56671) Whether or not there e(ists a &artnershi&.



8192) :es. The joint venture agreement the sisters entered into ith Manuel is a&artnershi& agreement here!y they agreed to contri!ute &ro&erty Dtheir landE

hich as to !e develo&ed as a su!division. While on the other hand, thoughManuel did not contri!ute ca&ital, he is an industrial &artner for his contri!ution

for general e(&enses and other costs. Hurthermore, the income from the said&roject ould !e divided according to the sti&ulated &ercentage D-+?/+E. Clearly,the contract manifested the intention of the &arties to form a &artnershi&. Hurtherstill, the sisters cannot invoke their right to the -+ value of the &ro&erty and atthe same time deny the same contract hich entitles them to it.

At any rate, the failure of the &artnershi& cannot !e !lamed on the sisters, nor canit !e !lamed to Manuel Dthe sisters on their a&&eal did not sho evidence as toManuel3s fault in the failure of the &artnershi&E. The sisters must then !ear theirloss D hich is -+ E. Manuel does not !ear the loss of the other /+ !ecause as anindustrial &artner he is e(em&t from losses.

9im Tong 9im v "hil Hishing 0ear

5t as esta!lished that 9im Tong 9im reGuested "eter :ao to engage in commercial'shing ith him and one Antonio Chua. The three agreed to &urchase t o 'shing!oats !ut since they do not have the money they !orro ed from one Iesus 9imD!rother of 9im Tong 9imE. They again !orro ed money and they agreed to&urchase 'shing nets and other 'shing eGui&ments. No , :ao and Chuare&resented themselves as acting in !ehalf of <4cean Juest Hishing Cor&oration>D4JHCE they contracted ith "hili&&ine Hishing 0ear 5ndustries D"H05E for the&urchase of 'shing nets amounting to more than "$++k.

They ere ho ever una!le to &ay "H05 and so they ere sued in their o n names!ecause a&&arently 4JHC is a non?e(istent cor&oration. Chua admitted lia!ility



and asked for some time to &ay. :ao aived his rights. 9im Tong 9im ho everargued that he3s not lia!le !ecause he as not a are that Chua and :aore&resented themselves as a cor&oration% that the t o acted ithout his kno ledgeand consent.

56671) Whether or not 9im Tong 9im is lia!le.

8192) :es. Hrom the factual 'ndings of !oth lo er courts, it is clear that Chua, :ao and 9im had decided to engage in a 'shing !usiness, hich they started !y!uying !oats orth " . $ million, 'nanced !y a loan secured from Iesus 9im. 5ntheir Com&romise Agreement, they su!seGuently revealed their intention to &aythe loan ith the &roceeds of the sale of the !oats, and to divide eGually amongthem the e(cess or loss. These !oats, the &urchase and the re&air of hich ere'nanced ith !orro ed money, fell under the term <common fund> under Article* - . The contri!ution to such fund need not !e cash or '(ed assets% it could !e anintangi!le like credit or industry. That the &arties agreed that any loss or &ro'tfrom the sale and o&eration of the !oats ould !e divided eGually among them alsosho s that they had indeed formed a &artnershi&.

9im Tong 9im cannot argue that the &rinci&le of cor&oration !y esto&&els can only!e im&uted to :ao and Chua. 7nGuestiona!ly, 9im Tong 9im !ene'ted from the useof the nets found in his !oat s , the !oat hich has earlier !een &roven to !e anasset of the &artnershi&. 9im, Chua and :ao decided to form a cor&oration.

Although it as never legally formed for unkno n reasons, this fact alone does not&reclude the lia!ilities of the three as contracting &arties in re&resentation of it.Clearly, under the la on esto&&el, those acting on !ehalf of a cor&oration andthose !ene'ted !y it, kno ing it to !e ithout valid e(istence, are held lia!le asgeneral &artners.

Iarantilla Ir v Iarantilla



HACT6)

The s&ouses Andres Iarantilla and HelisaIaleco ere survived !y eight children)Hederico 6r., 2el'n, Benjamin, Conchita, osita, "acita, afael and Antonieta."etitioner Hederico Iarantilla, Ir. is the grandchild of the late Iarantilla s&ouses !y

their son Hederico Iarantilla, 6r. and his ife 9eda Iamili. "etitioner also has t oother !rothers) 2oroteo and Tomas Iarantilla.

The Iarantilla heirs e(trajudicially &artitioned amongst themselves the real&ro&erties of their deceased &arents. With the e(ce&tion of the real &ro&ertyadjudicated to "acitaIarantilla, the heirs also agreed to allot the &roduce of thesaid real &ro&erties for the years *@/ ?*@/@ for the studies of afael and

AntonietaIarantilla.

6&s. osita Iarantilla and Vivencio 2eocam&o entered into an agreement ith thes&ouses Buenaventura emotigue and ConchitaIarantilla to &rovide mutualassistance to each other !y ay of 'nancial su&&ort to any commercial andagricultural activity on a joint !usiness arrangement. This &roved to !e successfulas they ere a!le to esta!lish a manufacturing and trading !usiness, acGuire real&ro&erties, and construct !uildings, among other things. The same ended in *@u&on their voluntary dissolution.

The s&ouses Buenaventura and Conchita emotigue e(ecuted a document Ackno ledgement of "artici&ating Ca&ital stating the &artici&ating ca&ital of of their co?o ners as of the year *@$#, ith AntonietaIarantillas stated as eightthousand &esos D" ,+++.++E and Hederico Iarantilla, Ir.s as 've thousand &esosD"$,+++.++E.

The controversy started hen Antonieta 'led a com&laint against Buenaventura,Cynthia, 2oroteo and Tomas, for the accounting of the assets and income of the co?o nershi&, for its &artition and the delivery of her share corres&onding to eight&ercent D E, and for damages. 6he alleged that the initial contri!ution of &ro&ertyand money came from the heirs inheritance, and her su!seGuent annualinvestment of seven thousand 've hundred &esos D" ,$++.++E as additional ca&italcame from the &roceeds of her farm.

es&ondents denied having formed a &artnershi&. They did not deny the e(istenceand validity of the KAckno ledgement of "artici&ating Ca&italK and in fact used thisas evidence to su&&ort their claim that Antonietas share as limited to the!usinesses enumerated therein. "etitioner Hederico Ir joined his aunt Antonietaand like ise asserted his share in the su&&osed &artnershi&.

The TC rendered judgment in favor of Antonieta and Hederico. 4n a&&eal, the CA set the TC 2ecision. "etitioner 'led a &etition for revie to the 6C.



ISSUE: Whether or not the CA erred in ruling that petitioners are not entitled toprofts over the usinesses not listed in the Ac!nowledge"ent

8192) No. CA 2ecision A;irmed

C5V59 9AW? There is a co?o nershi& hen an undivided thing or right !elongs todi;erent &ersons. 5t is a &artnershi& hen t o or more &ersons !ind themselves tocontri!ute money, &ro&erty, or industry to a common fund, ith the intention of dividing the &ro'ts among themselves.

C5V59 9AW? The common o nershi& of &ro&erty does not itself create a &artnershi&

!et een the o ners, though they may use it for the &ur&ose of making gains% andthey may, ithout !ecoming &artners, agree among themselves as to themanagement, and use of such &ro&erty and the a&&lication of the &roceedstherefrom.

7nder Article * - of the Civil Code, there are t o essential elements in a contractof &artnershi&) DaE an agreement to contri!ute money, &ro&erty or industry to acommon fund% and D!E intent to divide the &ro'ts among the contracting &arties.

5t is not denied that all the &arties in this case have agreed to contri!ute ca&ital toa common fund to !e a!le to later on share its &ro'ts. They have admitted this fact,agreed to its veracity, and even su!mitted one common documentary evidence to&rove such &artnershi& ? the Ackno ledgement of "artici&ating Ca&ital.

The Ackno ledgement of "artici&ating Ca&ital is a duly notari=ed document voluntarily e(ecuted !y Conchita Iarantilla? emotigue and Buenaventura

emotigue in *@$ . "etitioner does not dis&ute its contents and is actually relyingon it to &rove his &artici&ation in the &artnershi&. Article * @ of the Civil Code&rovides)

Art. * @ . The losses and &ro'ts shall !e distri!uted in conformity ith the

agreement. 5f only the share of each &artner in the &ro'ts has !een agreed u&on,the share of each in the losses shall !e in the same &ro&ortion.

5n the a!sence of sti&ulation, the share of each &artner in the &ro'ts and lossesshall !e in &ro&ortion to hat he may have contri!uted, !ut the industrial &artnershall not !e lia!le for the losses.



The &etitioner himself claims his share to !e - , as stated in the Ackno ledgement of "artici&ating Ca&ital. 8o ever, &etitioner fails to reali=e thatthis document s&eci'cally enumerated the !usinesses covered !y the &artnershi&)Manila Athletic 6u&&ly, emotigue Trading in 5loilo City and emotigue Trading inCota!ato City. 6ince there as a clear agreement that the ca&ital the &artners

contri!uted ent to the three !usinesses, then there is no reason to deviate fromsuch agreement and go !eyond the sti&ulations in the document. Therefore, theCourt of A&&eals did not err in limiting &etitioners share to the assets of the!usinesses enumerated in the Ackno ledgement of "artici&ating Ca&ital.

5n Villareal v. amire=, the Court held that since a &artnershi& is a se&arate juridical entity, the shares to !e &aid out to the &artners is necessarily limited onlyto its total resources.

C5V59 9AW? e(&ress and im&lied trust

The &etitioner further asserts that he is entitled to res&ondents &ro&erties !asedon the conce&t of trust. 8e claims that since the su!ject real &ro&erties ere&urchased using funds of the &artnershi&, herein he has a - share, then Klaand eGuity mandates that he should !e considered as a co?o ner of those&ro&erties in such &ro&ortion.K

As a rule, the !urden of &roving the e(istence of a trust is on the &arty asserting itse(istence, and such &roof must !e clear and satisfactorily sho the e(istence of thetrust and its elements. While im&lied trusts may !e &roved !y oral evidence, theevidence must !e trust orthy and received !y the courts ith e(treme caution,and should not !e made to rest on loose, eGuivocal or inde'nite declarations.Trust orthy evidence is reGuired !ecause oral evidence can easily !e fa!ricated.

The &etitioner has failed to &rove that there e(ists a trust over the su!ject real&ro&erties. Aside from his !are allegations, he has failed to sho that theres&ondents used the &artnershi&s money to &urchase the said &ro&erties. 1venassuming arguendo that some &artnershi& income as used to acGuire these

&ro&erties, the &etitioner should have successfully sho n that these funds camefrom his share in the &artnershi& &ro'ts. After all, !y his o n admission, and asstated in the Ackno ledgement of "artici&ating Ca&ital, he o ned a mere -eGuity in the &artnershi&.

21N512.



8eirs of Iose 9im v 9im

5n *@ +, the heirs of Iose 9im alleged that Iose 9im entered into a &artnershi&agreement ith Iimmy :u and Nor!erto 7y. The three contri!uted "$+,+++.++ eachand used the funds to &urchase a truck to start their trucking !usiness. A yearlater ho ever, Iose 9im died. The eldest son of Iose 9im, 1lLedo 9im, took over thetrucking !usiness and under his management, the trucking !usiness &ros&ered.1lLedo as a!le to !ut real &ro&erties in his name. Hrom one truck, he increased itto @ trucks, all trucks ere in his name ho ever. 8e also acGuired other motor

vehicles in his name.

5n *@@ , Nor!erto 7y as killed. 5n *@@$, 1lLedo 9im died of a heart attack.1lLedo3s ife, Iuliet 9im, took over the &ro&erties !ut she intimated to Iimmy andthe heirs of Nor!erto that she could not go on ith the !usiness. 6o the &ro&erties

in the &artnershi& ere divided among them.

No the other heirs of Iose 9im, re&resented !y 1lenito 9im, reGuired Iuliet to doan accounting of all income, &ro'ts, and &ro&erties from the estate of 1lLedo 9imas they claimed that they are co?o ners thereof. Iuliet refused hence they sued her.



The heirs of Iose 9im argued that 1lLedo 9im acGuired his &ro&erties from the&artnershi& that Iose 9im formed ith Nor!erto and Iimmy. 5n court, Iimmy :utesti'ed that Iose 9im as the &artner and not 1lLedo 9im. The heirs testi'ed that1lLedo as merely the driver of Iose 9im.

56671) Who is the <&artner> !et een Iose 9im and 1lLedo 9im

8192) 5t is 1lLedo 9im !ased on the evidence &resented regardless of Iimmy :u3stestimony in court that Iose 9im as the &artner. 5f Iose 9im as the &artner, thenthe &artnershi& ould have !een dissolved u&on his death Din fact, though the 6Cdid not say so, 5 !elieve it should have !een dissolved u&on Nor!erto3s death in*@@ E. A &artnershi& is dissolved u&on the death of the &artner. Hurther, noevidence as &resented as to the articles of &artnershi& or contract of &artnershi&!et een Iose, Nor!erto and Iimmy. 7nfortunately, there is none in this case,!ecause the alleged &artnershi& as never formally organi=ed.

But at any rate, the 6u&reme Court noted that !ased on the functions &erformed!y 1lLedo, he is the actual &artner.

The follo ing circumstances tend to &rove that 1lLedo as himself the &artner of Iimmy and Nor!erto)

*.E Cresencia testi'ed that Iose gave 1lLedo "$+,+++.++, as share in the&artnershi&, on a date that coincided ith the &ayment of the initial ca&ital in the&artnershi&%

#.E 1lLedo ran the a;airs of the &artnershi&, ielding a!solute control, &o er andauthority, ithout any intervention or o&&osition hatsoever from any of &etitioners herein%

.E all of the &ro&erties, &articularly the nine trucks of the &artnershi&, ereregistered in the name of 1lLedo%

/.E Iimmy testi'ed that 1lLedo did not receive ages or salaries from the&artnershi&, indicating that hat he actually received ere shares of the &ro'ts of the !usiness% and

$.E none of the heirs of Iose, the alleged &artner, demanded &eriodic accountingfrom 1lLedo during his lifetime. As re&eatedly stressed in the case of #eirs o$ Tan

Eng %ee , a demand for &eriodic accounting is evidence of a &artnershi&.

http://www.uberdigests.info/2012/06/heirs-of-tan-eng-kee-vs-court-of-appeals/






Hurthermore, &etitioners failed to adduce any evidence to sho that the real and&ersonal &ro&erties acGuired and registered in the names of 1lLedo and Iulietformed &art of the estate of Iose, having !een derived from Iose3s alleged&artnershi& ith Iimmy and Nor!erto.

1lLedo as not just a hired hel& !ut one of the &artners in the trucking !usiness,active and visi!le in the running of its a;airs from day one until this ceasedo&erations u&on his demise. The e(tent of his control, administration andmanagement of the &artnershi& and its !usiness, the fact that its &ro&erties ere&laced in his name, and that he as not &aid salary or other com&ensation !y the&artners, are indicative of the fact that 1lLedo as a &artner and a controlling oneat that. 5t is a&&arent that the other &artners only contri!uted in the initial ca&ital!ut had no say thereafter on ho the !usiness as ran. 1vidently it as through1lfredo3s e;orts and hard ork that the &artnershi& as a!le to acGuire moretrucks and other ise &ros&er. 1ven the a&&ellant &artici&ated in the a;airs of the&artnershi& !y acting as the !ookkee&er sans salary.



"hile( Mining Cor& V Comm of 5nternal evenueHacts) "etitioner "hile( entered into an agreement ith Baguio 0old MiningCor&oration for the former to manage the latter3s mining claim kno as the 6to.

Mine. The &arties3 agreement as denominated as <"o er of Attorney>. The minesu;ered continuing losses over the years, hich resulted in &etitioners3 ithdra alas manager of the mine. The &arties e(ecuted a <Com&romise 2ation in "ayment>,

herein the de!t of Baguio amounted to "h&. **#,* -,+++.++."etitioner deducted said amount from its gross income in its annual ta( incomereturn as <loss on the settlement of receiva!les from Baguio 0old against reservesand allo ances>. B5 disallo ed the amount as deduction for !ad de!t. "etitionerclaims that it entered a contract of agency evidenced !y the <&o er of attorney>e(ecuted !y them and the advances made !y &etitioners is in the nature of a loanand thus can !e deducted from its gross income. Court of Ta( A&&eals DCTAErejected the claim and held that it is a &artnershi& rather than an agency. CA a;irmed CTA

5ssue) Whether or not it is an agency.

8eld) No. The lo er courts correctly held that the <"o er of Attorney> D"AE is theinstrument material that is material in determining the true nature of the !usinessrelationshi& !et een &etitioner and Baguio. An e(amination of the said "A revealsthat a &artnershi& or joint venture as indeed intended !y the &arties. While acor&oration like the &etitioner cannot generally enter into acontract of &artnershi& unless authori=ed !y la or its charter, it has !een held that it mayenter into a joint venture, hich is akin to a &articular &artnershi&. The "A indicates that the &arties had intended to create a "AT and esta!lish a commonfund for the &ur&ose. They also had a joint interest in the &ro'ts of the !usiness assho n !y the $+?$+ sharing of income of the mine.

Moreover, in an agency cou&led ith interest, it is the agency that cannot !erevoked or ithdra n !y the &rinci&al due to an interest of a third &arty thatde&ends u&on it or the mutual interest of !oth &rinci&al and agent. 5n this case the

non?revocation or non? ithdra al under the "A a&&lies to the advances made !ythe &etitioner ho is the agent and not the &rinci&al under the contract. Thus, itcannot !e inferred from the sti&ulation that it is an agency.



6antos V 6&ouses eyes

5n Iune *@ -, Hernando 6antos D + E, Nieves eyes D*$ E, and Melton a!atD*$ E orally instituted a &artnershi& ith them as &artners. Their venture is to setu& a lending !usiness here it as agreed that 6antos shall !e 'nancier and thatNieves and a!at shall contri!ute their industry. &&The percentages a$ter their na"es denote their share in the proft' 9ater, Nieves introduced Cesar 0ragera to6antos. 0ragera as the chairman of a cor&oration. 5t as agreed that the&artnershi& shall &rovide loans to the em&loyees of 0ragera3s cor&oration and0ragera shall earn commission from loan &ayments.5n August *@ -, the three&artners &ut into riting their ver!al agreement to form the &artnershi&. As earlieragreed, 6antos shall 'nance and Nieves shall do the daily cash Lo more&articularly from their dealings ith 0ragera, a!at on the other hand shall !e aloan investigator. But then later, Nieves and 6antos found out that a!at asengaged in another lending !usiness hich com&etes ith their &artnershi& hence

a!at as e(&elled.The t o continued ith the &artnershi& and they took ith

them Nieves3 hus!and, Arsenio, ho !ecame their loan investigator.

9ater, 6antos accused the s&ouses of not remitting 0ragera3s commissions to thelatter. 8e sued them for collection of sum of money. The s&ouses countered that6antos merely 'led the com&laint !ecause he did not ant the s&ouses to get theirshares in the &ro'ts. 6antos argued that the s&ouses, insofar as the dealing ith0ragera is concerned, are merely his em&loyees. 6antos alleged that there is adistinct &artnershi& !et een him and 0ragera hich is se&arate from the&artnershi& formed !et een him, a!at and Nieves.

The trial court as ell as the Court of A&&eals ruled against 6antos and orderedthe latter to &ay the shares of the s&ouses.

56671) Whether or not the s&ouses are &artners.



8192) :es. Though it is true that the original &artnershi& !et een a!at, 6antosand Nieves as terminated hen a!at as e(&elled, the said &artnershi& asho ever considered continued hen Nieves and 6antos continued engaging asusual in the lending !usiness even getting Nieves3 hus!and, ho resigned from the

Asian 2evelo&ment Bank, to !e their loan investigator F ho, in e;ect, su!stituteda!at.

There is no se&arate &artnershi& !et een 6antos and 0ragera. The latter !eingmerely a commission agent of the &artnershi&. This is even though the &artnershi&

as formali=ed shortly after 0ragera met ith 6antos DNote that Nieves as eventhe one ho introduced 0ragera to 6antos e(actly for the &ur&ose of setting u& alending agreement !et een the cor&oration and the &artnershi&E.

84W1V1 , the order of the Court of A&&eals directing 6antos to give the s&ousestheir shares in the &ro't is &remature. The accounting made !y the trial court is!ased on the <total income> of the &artnershi&. 6uch total income calculated !y thetrial court did not consider the e(&enses sustained !y the &artnershi&. All e(&ensesincurred !y the money?lending enter&rise of the &arties must 'rst !e deductedfrom the <total income> in order to arrive at the <net &ro't> of the &artnershi&. Theshare of each one of them should !e !ased on this <net &ro't> and not from the<gross income> or <total income>.

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