[PARTNERSHIP; DISTINGUISHED FROM OTHER CONTRACTS]

Sicad, Mark Anthony J.

HEIRS OF TAN ENG KEE V. CA

The heirs of Tan Eng Kee are alleging that Tan Eng Kee and his brother Tan
Eng Law that the brothers had an alleged partnership which was later turned
into a corporation. The heirs also allege that the business of the partnership
prospered due to the hard work and thrift of both brothers and the
conversion of the partnership into a corporation was a ruse to deprive Tan
Eng Kee and his heirs of their rightful participation in the profits of the
business.

The SC ruled that there was no partnership in this case and that Tan Eng
Kee was a mere employee of his brother. The petitioners failed to show how
much Tan Eng Kee received, if any, as his share in the profits for any
particular period. Hence, they failed to prove that Tan Eng Kee and Tan Eng
Lay intended to divide the profits of the business between themselves, which
is one of the essential features of a partnership. The Court also found it odd
that despite 40 years of the partnership’s alleged existence, Tan Eng Kee
never asked for an accounting. A demand for periodic accounting is
evidence of a partnership.

The best evidence would’ve been the contract of partnership itself, or the
articles of partnership but there is none so the SC based its determination of
the existence of a partnership based purely on circumstantial evidence. The
circumstances only tend to show that Tan Eng Kee was involved in the
operations of the business, but in what capacity is unclear.

Ma’am’s dissent: the Court failed to take into consideration that the brothers
pooled their resources into the business and shared in the profits. The Court
should also have considered that maybe the reason why their was no
demand for accounting was because they were brothers. There is a
possibility in this case that there was a partnership but an informal one
considering that all the elements of partnership are present.