Heirs of Jose Lim vs.

Lim
( Trucking Business )
F: Petitioners insists that Jose Lim was the
partner of Norberto and Jimmy and not
!"edo (!ate husband of respondent) and
therefore a!! the properties ac#uired by
!"edo and respondent form part of the
estate of Jose$ ha%ing been deri%ed from the
a!!eged partnership&
': ()N !"edo is a partner of the said trucking
company&
*:
The court app!ying +,-. of the /i%i!
/ode he!d that !"edo is a partner&
/resencia Lim testi0ed that 1ose ga%e
!"edo 23k$ as share in the
partnership$ on a date that coincided
with the payment of the initia! capita!
of the partnership
!"edo ran the a4airs of the
partnership$ wie!ding abso!ute contro!$
power and authority$ without
inter%ention or opposition whatsoe%er
of the petitioners herein5
6!! the properties particu!ar!y the .
trucks of the partnership were
registered in the name of !"edo&
Jimmy testi0ed that !"edo did not
recei%e wages or sa!aries from the
partnership$ indicating that what he
actua!!y recei%ed were shares of the
pro0ts of the business5
None of the petitioners$ as heirs of
Jose$ the a!!eged partner$ demanded
periodic accounting from !"edo
during his !ifetime&
Philex Mining Corp vs. CIR
(Joint 7enture for 8ining)
F: Petitioner entered into an agreement with
Baguio 9o!d$ where the former agreed to
manage the mining operations of the !atter&
The agreement was e%idenced by a :Power
of 6ttorney;& 't was indicated in the said
document$ that Baguio 9o!d wou!d contribute
P11M under its owner<s account p!us any of
its income that is !eft in the pro1ect$ in
addition to its actual mining claim&
8eanwhi!e$ petitioner<s contribution wou!d
consist of its expertise in the
management and operation of mines$ as
we!! as the manager<s account which is
comprised of P11M in funds and property
and petitioner<s "compensation" as
manager that cannot be paid in cash&
The mining su4ered serious !oses which
ended business of both parties e%idenced by
their e=ecution of a :compromise
agreement&;
The /'> assessed Phi!e= 8ining for ta=
de0ciencies& 't stressed that Phi!e= entered
into a partnership with Baguio 9o!d&
Petitioner denied the a!!egations of the /'>
and maintained that its ad%ances of money
and property to Baguio 9o!d were in a nature
of a !oan as e%idenced by the :compromise
agreement;&
': ()N Phi!e= and Baguio 8ining formed
partnership&
*:
?es& The parties entered into the
compromise agreements as a
conse#uence of the disso!ution of their
business re!ationship& 't did not de0ne
that re!ationship or indicate its rea!
character&
The re!ationship of the parties may be
g!eaned upon the :power of attorney;
document entered between the @&
6n e=amination of the APower of
6ttorneyA re%ea!s that a partnership or
1oint %enture was indeed intended by
the parties& Bnder a contract of
partnership$ two or more persons bind
themse!%es to contribute money$
property$ or industry to a common
fund$ with the intention of di%iding the
pro0ts among themse!%es&
The term :compensation; found in the
said document cou!d not be deemed
as :wages;& 't is impossib!e for a
company to gi%e a sa!ary to an
emp!oyee representing 23C of its net
pro0t&
(hi!e a corporation$ !ike petitioner$
cannot genera!!y enter into a contract
of partnership un!ess authoriDed by
!aw or its charter$ it has been he!d that
it may enter into a 1oint %enture which
is akin to a particu!ar partnership:
under Phi!ippine !aw$ a 1oint %enture is
a form of partnership and shou!d be
go%erned by the !aw of partnerships
Tocao vs. C
F: Petitioners maintain that there was no
partnership between petitioner Be!o$ on one
hand$ and respondent Nenita 6nay$ on the
other hand5 and that the !atter being mere!y
an emp!oyee of petitioner Tocao& 't was found
out that Be!o sometimes wou!d participate in
9eminesse nterprise meetings to he!p
petitioner Tocao&
': ()N Be!o is a partner of Tocao&
*:
No& Be!oEs presence in 9eminesse
nterpriseEs meetings was mere!y as
guarantor of the company and to he!p
Tocao his persona! friend&
>espondent herse!f professed !acked
of know!edge that petitioner Be!o
recei%ed any share in the pro0ts of
9eminesse&
Fn the other hand$ Tocao dec!ared
that Be!o was not entit!ed to any share
in the pro0ts of the enterprise&
(ith no participation in the pro0ts$
petitioner Be!o cannot be deemed a
partner5 since the essence of a
partnership is that the partners share
in the pro0ts and !osses&
guila! Jr. vs. C
F: Petitioner is the manager of 6&/& 6gui!a G
Hons$ /o$ a partnership engaged in !ending
acti%ities& Pri%ate respondent Fe!icidad
6brogar entered into a 8F6 w) 6&/& 6#ui!a G
Hons in%o!%ing a pacto de retro sa!e of a
house G !ot& 6s pri%ate respondent fai!ed to
redeem the property within the prescribed
period$ petitioner caused the cance!!ation of
T/T and the issuance of the new certi0cate
of tit!e in the name of the partnership&
Pri%ate respondent 0!ed a petition for a
dec!aration of the nu!!ity of the deed of sa!e
and a crimina! comp!aint for forgery against
petitioner a!!eging that the signature of her
husband was a forgery because he was
a!ready dead when the deed was supposed
to ha%e been e=ecuted&
Petitioner now contends that he is not the
rea! party in interest but 6&/& 6gui!a G /o&$
against which this case shou!d ha%e been
brought&
': ()N petitioner is the rea! party in interest&
*:
6rt& +,-I of the /i%i! /ode$ a
partnership has a 1uridica! persona!ity
separate and distinct from that of each
partner& The partners cannot be he!d
!iab!e for the ob!igations of the
partnership un!ess it is shown that the
!ega! 0ction of a di4erent 1uridica!
persona!ity is being used for
fraudu!ent$ unfair$ or i!!ega! purposes&
'n this case& Pri%ate respondent has
not shown that 6&/& 6gui!a G Hons$
/o&$ represented by petitioner& *ence$
it is the partnership$ not its oJcers or
agents$ which shou!d be imp!eaded in
any !itigation in%o!%ing property
registered in its name&
"rtega vs. C
F: Petitioner 0!ed a 8> for the decision of the
H/ en banc which disso!%ed the partnership
of :Bito$ 8isa G LoDada; upon withdrawa! of
6tty& Joa#uin L& 8isa& *e a!so asked for an
appointment of a recei%er to take o%er the
assets of the disso!%ed partnership and to
take charge of the winding up of its a4airs&
': ()N the /6 erred in ho!ding that the
withdrawa! of pri%ate respondent disso!%ed
the partnership regard!ess of his good or bad
faith&
*:
The birth and !ife of a partnership at
wi!! is predicated on the mutua! desire
and consent of the partners& The right
to choose with whom a person wishes
to associate himse!f is the foundation
and essence of partnership&
'ts continued e=istence is$ in turn$
dependent on the mutua! reso!%e$
a!ong with each partnerEs capabi!ity to
gi%e it$ and the absence of a cause for
disso!ution pro%ided by !aw itse!f&
7eri!y$ any one of the partners may$ at
his so!e p!easure$ dictate disso!ution of
the partnership at wi!!& *e must
howe%er$ act in good faith not that the
attendance of bad faith can pre%ent
the disso!ution of the partnership at
wi!!&
In the matter of the Petition for
uthorit# To Continue use of the $rm
name %"&aeta! Romulo! etc.
F: @ separate petitions were 0!ed by the
sur%i%ing partners of 6tty& 6!e=ander Hycip
and the sur%i%ing partners of *erminiano
FDaeta$ praying that they be a!!owed to
continue using$ in the name of their 0rms$
the names of partners who passed away&
6rguments:
+& Bnder the !aw$ a partnership is not
prohibited from continuing its business
under a 0rm name which inc!udes the
name of the deceased partner&( 6rt&
+IK3 of the /i%i! /ode )
@& 'n regu!ating other professions$ such
as accountancy and engineering$ the
!egis!ature has authoriDed the
adoption of 0rm names without any
restriction as to the use$ in such 0rm
name$ of the deceased partner&
L& The /anons of Professiona! thics are
not transgressed because as adopted
by 6merican Bar 6ssociation: :the
continued use of the name of a
deceased or former partner when
permissib!e by !oca! custom is not
unethica!$ but care shou!d be taken
that no imposition or deception is
practiced through this use&;
K& The deaths of the partners were we!!M
pub!iciDed&
2& No !oca! custom prohibits the
continued use of the partnerEs name in
a professiona! 0rmEs name&
-& The continued use of the deceased
partnerEs name in the 0rm name of
!aw partnerships has been consistent!y
a!!owed by BH /ourts&
': ()N the names of the deceased
partners shou!d be a!!owed to continue in
use in the 0rm name&
*:
:6rt& +I+2& %ery partnership sha!!
operate under a 0rm name$ which
may or may not inc!ude the name
of one or more of the partners&;
:Those who$ not being members of
the partnership$ inc!ude their
names in the 0rm name$ sha!! be
sub1ect to the !iabi!ity of a partner&;
(partners shou!d be !i%ing persons
who can be sub1ected to !iabi!ity)
6rt& +IK3 treats more of a
commercia! partnership with a
good wi!! to protect rather than a
professiona! partnership$ with no
sea!ab!e good wi!! but whose
reputation depends on the persona!
#ua!i0cations of its indi%idua!
members&
The partnership for the practice of
!aw cannot be !ikened to
partnerships formed by other
professiona!s or for business& The
practice of !aw is a!so a specia!
pri%i!ege$ high!y persona! and
partaking of the nature of a pub!ic
trust&
Firm names$ under !oca! customs$
identify the more acti%e and more
senior members or partners of the
!aw 0rm&
The possibi!ity of deception upon
the pub!ic$ rea!$ or conse#uentia!$
where the name of a deceased
partner continues to be used
cannot be ru!ed out&
NB: >u!e L&3@ of the /P> appro%ed and
promu!gated by the H/ on June @+$+.II in
e4ect abandoned the ru!ing in the Hycip
case& (see 6rt& +I+2 /i%i! /ode)
Pascual vs. CIR
F: The petitioners Pascua! and dragon bought
2 parce!s of !and& The 0rst @ were so!d in
+.-I$ whi!e the remaining L were so!d in
+.,3& Petitioners paid the corresponding
capita! gains ta=es on both sa!es a%ai!ing the
ta= amnesties way back in +.,K& *owe%er$
the /'> assessed and re#uired petitioners to
pay corporate income ta=es for the said
years& >espondent insisted that in both
years$ petitioners as coMowners in the rea!
estate transactions formed an unregistered
partnership ta=ab!e as corporation&
': ()N petitioners formed a partnership in
both transactions&
*:
No& There is no e%idence that the
petitioners entered into an agreement
to contribute money$ property or
industry in a common fund$ and that
they intended to di%ide the pro0ts
among themse!%es& >espondent /'>
1ust assumed these conditions to be
present on the basis of the fact that
petitioners purchased certain parce!s
of !and and became coMowners
thereof&
The transactions were iso!ated& The
character of habitua!ity pecu!iar to
business transactions for the purpose
of gain was not present&
The sharing of returns does not in
itse!f estab!ish a partnership whether
or not the persons sharing therein
ha%e a 1oint or common right or
interest in the property& There must be
a c!ear intent to form a partnership$
the e=istence of a 1uridica! persona!ity
di4erent from the indi%idua! partners$
and the freedom of each party to
transfer or assign the who!e property&
ur'ach vs. (anitar# )ares
(Partnership5 Joint 7enture5 Foreign and
Nomestic /orp)
F: This conso!idated petition assai!ed the
decision of the /6 directing a certain
86NN> FF L/T'FN FF FFF'/>H 'N T*
BF6>N FF N'>/TF>H
OThere are two groups in this case$ the
Lag*ameo group composed of Fi!ipino
in%estors and the merican (tan*ar* Inc&
(6H') composed of foreign in%estors&
The 6H' 9roup and petitioner Ha!aDar (9&>&
Nos& ,2.,2M,-) contend that the actua!
intention of the parties shou!d be %iewed
strict!y on the A6greementA dated 6ugust
+2$+.-@ wherein it is c!ear!y stated that the
parties< intention was to form a corporation
and not a 1oint %enture&
': The main issue hinges on who were the
du!y e!ected directors of Haniwares for the
year +.IL during its annua! stockho!ders<
meeting he!d on 8arch I$ +.IL& To answer
this #uestion the fo!!owing factors shou!d be
determined:
O(+) the nature of the business estab!ished
by the parties whether it was a 1oint %enture
or a corporation and
*:
(hi!e certain pro%isions of the
6greement wou!d make it appear that
the parties thereto disc!aim being
partners or 1oint %enturers such
disc!aimer is directed at third parties
and is not inconsistent with$ and does
not prec!ude$ the e=istence of two
distinct groups of stockho!ders in
Haniwares one of which (the Phi!ippine
'n%estors) sha!! constitute the
ma1ority$ and the other 6H' sha!!
constitute the minority stockho!der& 'n
any e%ent$ the evi*ent intention of
the Phi!ippine 'n%estors and 6H' in
entering into the 6greement is to
enter into a +oint venture
enterprise
6n e=amination of the 6greement
shows that certain pro%isions were
inccuded to protect the interests of 6H'
as the minority& For e=amp!e$ the %ote
of , out of . directors is re#uired in
certain enumerated corporate acts&
6H' is contractua!!y entit!ed to
designate a member of the =ecuti%e
/ommittee and the %ote of this
member is re#uired for certain
transactions
The 6greement a!so re#uires a ,2C
superMma1ority %ote for the
amendment of the artic!es and byM!aws
of Haniwares& 6H' is a!so gi%en the
right to designate the president and
p!ant manager &The 6greement further
pro%ides that the sa!es po!icy of
Haniwares sha!! be that which is
norma!!y fo!!owed by 6H' and that
Haniwares shou!d not e=port
AHtandardA products otherwise than
through 6H'<s =port 8arketing
Her%ices& Bnder the 6greement$ 6H'
agreed to pro%ide techno!ogy and
knowMhow to Haniwares and the !atter
paid roya!ties for the same&
The legal concept of a +oint
venture is of common !aw origin& 't
has no precise !ega! de0nition but it
has been genera!!y understood to
mean an organization formed for
some temporary purpose. It is in fact
hardly distinguishable from the
partnership, since their elements are
similar community of interest in the
business, sharing of profts and losses,
and a mutual right of control.
The main distinction cited by most
opinions in common !aw 1urisdictions is
that the partnership contemplates
a general 'usiness ,ith some
*egree of continuit#$ whi!e the
+oint venture is forme* for the
execution of a single transaction!
an* is thus of a temporar# nature&
"na vs. CIR
F: 'n +.KK LorenDo Fna was appointed
administrator of the estate of his !ate wife
Ju!ia Buna!es& The administrator submitted
the pro1ect of partition$ which was appro%ed
by the court& *owe%er$ there was no attempt
was made to di%ide the properties among his
2 chi!dren& 'nstead$ the properties remained
under the management of LorenDo who used
the said properties in business by !easing or
se!!ing them and in%esting the income
deri%ed therefrom&
'n the years +.KK to +.2K$ respondent /'>
did treat petitioners as coMowners$ not !iab!e
to corporate ta=$ and it was on!y from +.22
that /'> considered them as ha%ing formed
an unregistered partnership&
': ()N an unregistered partnership was
formed&
*:
?es& 't is admitted that a!! pro0ts from
these %entures were di%ided among
petitioners proportionate!y in
accordance with their respecti%e
shares in the inheritance&
From the moment petitioners a!!owed
not on!y the incomes from their
respecti%e shares but e%en the
properties themse!%es to be used by
LorenDo as a common fund in
undertaking se%era! transactions or
business$ with the intention of
deri%ing pro0t to be shared by them
proportionate!y$ such act was
tantamount to actua!!y contributing
such incomes to a common fund and$
in e4ect they thereby formed an
unregistered partnership ta=ab!e by
!aw&
Re#es vs. CIR
F: Petitioners purchased a !ot and bui!ding&
The initia! payment was shared e#ua!!y by
the respondents& 6t the time of the purchase$
the bui!ding was !eased to %arious tenants$
whose rights under the !ease contracts with
the origina! owners$ the purchasers$
petitioners herein$ agreed to respect& The
administration of the bui!ding was entrusted
to an administrator who co!!ected the rents5
kept books and records and rendered
statement of accounts to the owners&
Petitioners di%ided e#ua!!y the income of
operation and maintenance&
The /T6 he!d that petitioners formed a
partnership ta=ab!e by !aw app!ying the
ru!ing in %ange!ista case&
': ()N petitioners indeed formed a
partnership as contemp!ated by !aw&
*:
?es& The essentia! e!ements of
partnerships are present in this case$
name!y5 (a) an agreement to
contribute money$ property$ or
industry to a common fund5 and (b)
intent to di%ide the pro0ts among the
contracting parties&
The 0rst was a!ready admitted and
therefore it boi!s down to their intent
in acting as they did&
Bpon consideration of the
circumstances surrounding the case$ it
was found out that the petitionerEs
purpose was to engage in rea! estate
transactions for monetary gain and
then di%ide the same among
themse!%es&
'n the case at bar$ there was a
common fund used in a series of
transactions5 the property thus
ac#uired was not used for residentia!
or other purposes other than !easing&
Huch properties ha%ing been under
management by one person with fu!!
power to !ease and such condition
e=isted for +3 years a!ready&
The co!!ecti%e e4ect of these
circumstances is such as to !ea%e no
room for doubt on the e=istence of
said intent in the petitioners herein&
(ar*ane vs. C
F: Petitioner ad%anced the theory that he is a
partner of pri%ate respondent and not a mere
emp!oyee indebted to the !atter& PetitionerEs
bases are the promissory notes e=ecuted by
pri%ate respondent in fa%or of petitioner as
a!!eged!y his share or contribution for the
partnership&

': ()N there e=ists a partnership between
petitioner and pri%ate respondent&
*:
No& (hi!e receipt of a share in the
pro0ts of the business is a prima facie
e%idence that the person is recei%ing
the same as a partner$ no inference
sha!! be drawn if such pro0ts were
recei%ed in payment of his wages as
an emp!oyee&
-allemit vs. Ta'liran
(/oMownership5 (ithout intent for pro0t)
F: This suit concerns the partition of a piece
of !and he!d pro indiviso which the p!ainti4
and the defendant had ac#uired in common
from its origina! owner& By the refusa! of the
defendant to di%ide the property$ the p!ainti4
was compe!!ed to bring the proper action for
the enforcement of partition&
Petitioner asserts that a contract of
partnership was created between them&
Nefendant simp!y denied the its e=istence&
': ()N partnership e=ists&
*:
No& 't does not appear that any
contract of partnership whate%er was
made between them for the purposes
e=pressed in artic!e +--2 of the /i%i!
/ode$ for the sole transaction
performe* '# them ,as the
ac.uisition +ointl# by mutua!
agreement of the lan* in .uestion$
since it was undi%ided$ under the
condition that they each shou!d pay
oneMha!f of the price thereof and that
the property so ac#uired shou!d be
di%ided between the two purchasers5
and as$ under this tit!e$ the p!ainti4
and the defendant are the coMowners
of the said !and$ the partition or
di%ision of such property he!d in 1oint
tenancy must of course be a!!owed$
and the present possessor of the !and
has no right to deny the p!ainti4<s
c!aim on grounds or reasons
unsupported by proof&
"'illos vs. CIR
(Pro0t mere!y incidenta!)
F: This case is about the income ta= !iabi!ity
of four brothers and sisters who so!d two
parce!s of !and which they had ac#uired from
their father&
Commissioner of Internal Revenue
re.uire* the four petitioners to pa#
corporate income tax on the tota! pro0t of
P+LK$LL- in addition to indi%idua! income ta=
on their shares thereof *e assessed PL,$3+I
as corporate income ta=$ P+I$23. as 23C
fraud surcharge and P+2$2K,&2- as K@C
accumu!ated interest$ or a tota! of
P71,074.!&
The /ommissioner acted on the theory that
the four petitioners had formed an
unregistered partnership or 1oint %enture
within the meaning of sections @K(a) and
IK(b) of the Ta= /odeP
': ()N an unregistered partnership was
formed&
*:
No& Their origina! purpose was to
di%ide the !ots for residentia! purposes&
'f !ater on they found it not feasib!e to
bui!d their residences on the !ots
because of the high cost of
construction$ then they had no choice
but to rese!! the same to disso!%e the
coMownership&
The di%ision of the pro0t was mere!y
incidenta! to the disso!ution of the coM
ownership which was in the nature of
things a temporary state& 't had to be
terminated sooner or !ater&
6rtic!e +,-.(L) of the /i%i! /ode
pro%ides that Athe sharing of gross
returns does not of itse!f estab!ish a
partnership$ whether or not the
persons sharing them ha%e a 1oint or
common right or interest in any
property from which the returns are
deri%edA& There must 'e an
unmista/a'le intention to form a
partnership or +oint venture.