LYONS VS.

ROSENSTOCK

Facts:
Elser and Lyon got engaged in the real estate business and they equally divided
profits gained. However, Lyons went to the United States for a year and a half and
by reason of which he executed a general power of attorney in favor of Elser,
empowering the latter to manage and dispose the properties owned by them. In
then, Elser was drawn to a piece of land, the San Juan Estate, and he perceived an
opportunityto develop it into a suburban community. So, Elser raised P120,000
from his own funds and loaned P50,000 from Uy Siolong to pay for the initial
payment and the Carriedo property both owed by them was mortgaged.

W/N Lyons, as half owner of the Carriedoproperty, involuntarily became the owner
or a co-partner of an undivided interest in the San JuanEstate, which was acquired
partly by the moneyobtained through an encumbrance placed on theCarriedo
property.


Held: No.
One of the characteristic elements of partnership is consensual by which perfected
by mere consent, that is upon express or implied agreement of two or more persons.
In the case atbar, there was clearly no general relation of partnership between
Lyons and Elser and the most that can be said is that they had been co-participants
in various transactions involving real estate. It is clear the Elser, in buying the San
Juan Estate, was not acting for any partnership composed for himself and Lyons,
especially that the latter expressly communicated his desire not to participate in this
venture. Lastly, it should be noted that no money belonging to Lyons or any
partnership composed by Lyons and Elser was in fact used by the latter in the
purchase of the San Juan Estate.


fernandez v. dela rosa
Facts:
Fernandez claimed that he entered into a verbal agreement with De la Rosa to form
a partnership for thepurchase of cascoes with the undertaking that thedefendant
will buy the cascoes and that each partnerwill furnish such amount as he could,
while theprofits will be divided proportionately. Plaintiff furnished P300 for casco
No. 1515 and P825 forcasco No. 2089, both of which were placed under thename of
the defendant only. In April 1900, theparties undertook to draw up articles of
theirpartnership for the purpose of embodying it in anauthentic document. The
agreement however did notmaterialize because defendant proposed articleswhich
were materially different from their verbalagreement, and he was also unwilling to
includecasco No. 2089 in the partnership. Because thecascoes were under the
management of thedefendant, the plaintiff demanded an accountingover it to which
the defendant refused claiming thatno partnership existed between them.
Issue:
a) W/N a partnership existed between theparties. Yes.b) W/N the partnership was
terminated when thedefendant returned the P1,125 to plaintiff. No.
Held:
a) The essential points upon which the mindsof the parties must meet in a contract
of partnershipare 1) mutual contribution and 2) joint interest in theprofits. The fact
that the defendant received moneyfurnished by the plaintiff for the purpose of using
it topurchase the cascoes establishes the first element of the partnership, mutual
contribution to a commonstock. For the second element, the fact that theformation
of partnership had been a subject of negotiation between them, even before the
purchaseof the first casco, and that both parties intended topurchase the cascoes in
common satisfies therequirement that there should be an intention on thepart of
both parties to share the profits. With these, acomplete and perfect contract of
partnership wasentered into by the parties.It must be noted however that
thispartnership was subject to a suspensive conditionwhich is the execution of a
written agreementregarding the distribution of profits, character of partnership, etc.
But since the defendant actuallypurchased the cascoes, it would seem that
thepartnership already existed. And as furthermoreprovided by the Civil Code, a
written agreement wasnot necessary in order to give efficacy to the
verbalagreement of the partnership because thecontributions of the partners to the
partnership werenot in the form of immovables.b) During trial, the court was able to
prove thatplaintiff actually furnished some amount for therepair of the cascoes and
that it was presumed that aprofit has been obtained by the defendant prior tothe
return of the money. With these, the return of theP1,125 fell short of the amount
which the plaintiff has actually contributed to the partnership. For thesereasons, the
acceptance by the plaintiff of theamount returned by the defendant did not have
theeffect of terminating the legal existence of thepartnership by converting it into a
societas leonina. The court also proved that there was nointention on the part of the
plaintiff, in accepting themoney, to relinquish his rights as a partner. On thecontrary
he notified defendant that he waived noneof his rights in the partnership. Also the
lack of recognition on the part of the defendant of theplaintiffs right in the
partnership property and in theprofits does not give the former the right to force
adissolution upon the later upon the terms which theplaintiff is unwilling to accept.
A partnershiptherefore existed between the two and cascoes No.1515 and 2089 are
partnership properties.




estanislao v. ca
Facts:
The petitioner and private respondents arebrothers and sisters who are co-owners
of certainlots at the in Quezon City which were then beingleased to SHELL. They
agreed to open and operate agas station thereat to be known as Estanislao
ShellService Station with an initial investment of PhP15,000.00 to be taken from the
advance rentalsdue to them from SHELL for the occupancy of thesaid lots owned in
common by them. A joint affidavitwas executed by them on April 11, 1966.
Therespondents agreed to help their brother, petitionertherein, by allowing him to
operate and manage thegasoline service station of the family. In order not torun
counter to the companys policy of appointingonly one dealer, it was agreed that
petitioner wouldapply for the dealership. Respondent Remedioshelped in co-
managing the business with petitionerfrom May 1966 up to February 1967.On May
1966, the parties entered into an AdditionalCash Pledge Agreement with SHELL
wherein it wasreiterated that the P15,000.00 advance rental shallbe deposited with
SHELL to cover advances of fuel topetitioner as dealer with a proviso that
saidagreement cancels and supersedes the JointAffidavit.
Issue:
Can a partnership exist between members of the same family arising from their joint
ownership of certain properties?
Held: yes, partnership exists.
There is no merit in the petitioners contention that because of the stipulation
cancelling and superseding the previous joint affidavit, whatever partnership
agreement there was in said previous agreement had thereby been abrogated. Said
cancelling provision was necessary for the Joint Affidavit speaks of P15,000.00
advance rental starting May 25, 1966 while the latter agreement also refers to
advance rentals of the same amount starting May 24, 1966. There is therefore a
duplication of reference to the P15,000.00 hence the need to provide in the
subsequent document that it cancels and supersedes the previous none. Indeed, it
is true that the latter document is silent as to the statement in the Join Affidavit that
the value represents the capital investment of the parties in the business and it
speaks of the petitioner as the sole dealer, but this is as it should be for in the latter
document, SHELL 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 private
respondents and not a sole proprietorship of the petitioner. Furthermore, there are
other evidences in the record which show that there was in fact such partnership
agreement between parties. The petitioner submitted to the private respondents
periodic accounting of the business and gave a written authority to the private
respondent Remedios Estanislao to examine and audit the books of their common
business (aming negosyo). The respondent Remedios, on the other hand, assisted
in the running of the business. Indeed, the parties hereto formed a partnership
when they bound themselves to contribute money in a common fund with the
intention of dividing the profits among themselves




YULO V. YANG CHIAO SENG
Facts:
Yang Chiao Seng proposed to form a partnership with Rosario Yulo to run and
operate a theatre on the premises occupied by Cine Oro. the principal conditions of
the offer are: (1) Yang guarantees Yulo a monthly participation of P3,000 (2)
partnership shall be for a period of 2 years and 6 months with the condition that if
the land is expropriated, rendered impracticable for business, owner constructs a
permanent building, then Yulos right to lease and partnership even if period agreed
upon has not yet expired; (3) Yulo is authorized to personally conduct business in
the lobby of the building; and (4) after Dec 31, 1947, all improvements placed by
partnership shall belong to Yulo but if partnership is terminated before lapse of 1
and years, Yang shall have right to remove improvements. Parties established,
Yang and Co. Ltd., to exist from July 1,1945 Dec 31, 1947.In June 1946, they
executed a supplementary agreement extending the partnership for 3 years. The
land on which the theater was constructed was leased by Yulo from owners, Emilia
Carrion and Maria Carrion Santa Marina for an indefinite period but that after 1
year, such lease may be cancelled by either party upon 90-day notice. In Apr 1949,
the owners notified Yulo of their desire to cancel the lease contract come July. Yulo
and husband brought a civilaction to declare the lease for a indefinite period.
Owners brought their own civil action for ejectment upon Yulo and Yang.

Issue: Was the agreement a contract a lease or a partnership?
Held: The agreement was a sublease not a partnership.
The following are therequisites of partnership:

(1) two or more persons who bind themselves to contribute money, property or
industry
to a common fund
; (2)the intention on the part of the partners to divide the profits among themselves
(Article 1761, CC)Plaintiff did not furnish the supposed P20,000 capital nor did she
furnish any help or intervention in the management of the theatre. Neither has she
demanded from defendant any accounting of the expenses and earnings of the
business. She was absolutely silent with respect to any of the acts that a partner
should have done; all she did was to receive her share of P3,000 a month which
cannot be interpreted in any manner than a payment for the use of premises which
she had leased from the owners.


AGUILA, JR. VS. CA
Facts:
The petitioner herein is the manager of A.C.Aguila & Sons, Co., a partnership
engaged in lending activities, while the private respondent and her late husband
were the registered owners of a house and lot, covered by a transfer certificate of
title. Sometime in 1991, the private respondent and A.C.Aguila & Sons, Co.,
represented by the petitioner, entered into a Memorandum of Agreement. In this
agreement, a deed of absolute sale shall be executed by the private respondent in
favor of A.C. Aguila &Sons, Co., giving the former an option to repurchase and
obliging the same to deliver peacefully the possession of the property to A.C. Aguila
& Sons, Co.,within 15 days after the expiration of the said 90days grace period.
When the private respondent failed to redeem theproperty within the grace period,
the petitionercaused the cancellation of the transfer certificate of title under the
private respondents name and theissuance of a new certificate of title in the name
of A.C. Aguila & Sons, Co. Subsequently, the privaterespondent was asked to vacate
the premises,however she refused. Because of this refusal, A.C.Aguila & Sons, Co.
filed an ejectment case againsther.

Issue: whether aguilas officers or agents, which should be impleaded in any
litigation involving property.
Held: No
The petition is meritorious. A real party ininterest is one who would be benefited or
injured bythe judgment, or who is entitled to the avails of thesuit. Moreover, under
Article 1768 of the New CivilCode, a partnership has a juridical personality
separate and distinct from that of each of the partners. The partners cannot be held
liable for the obligations of the partnership unless it is shown that the legal fiction of
a different juridical personality I sbeing used for fraudulent, unfair, or illegal
purposes. In this case, the private respondent ahs not shownthat A.C. Aguila & Sons,
Co., as a separate juridicalentity, is being used for fraudulent, unfair or
illegalpurposes. Moreover, the title to the subject propertyis in the name of A.C.
Aguila & Sons, Co. and theMOA was executed between the private respondent,with
the consent of her husband, and A.C. Aguila &Sons, Co., represented by the
petitioner. Hence, it is the partnership, not its officers or agents, whichshould be
impleaded in any litigation involvingproperty registered in its name.We cannot
understand why both the RTC and the CA side stepped this issue when it was
squarely raisedbefore them by the petitioner. The courtsconclusion is that the
petitioner is not the real party in interest against whom this action should be
prosecuted. It is unnecessary to discuss the otherissues raised by him in his appeal.


Tocao v. ca

William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The three
agreed to form a joint venture for the sale of cooking wares. Belo was to contribute
P2.5 million; Tocao also contributed some cash and she shall also act as president
and general manager; and Anay shall be in charge of marketing. Belo and Tocao
specifically asked Anay because of her experience and connections as a marketer.
They agreed further that Anay shall receive the following:
10% share of annual net profits
6% overriding commission for weekly sales
30% of sales Anay will make herself
2% share for her demo services
They operated under the name Geminesse Enterprise, this name was however
registered as a sole proprietorship with the Bureau of Domestic Trade under Tocao.
The joint venture agreement was not reduced to writing because Anay trusted
Belos assurances.
The venture succeeded under Anays marketing prowess.
But then the relationship between Anay and Tocao soured. One day, Tocao advised
one of the branch managers that Anay was no longer a part of the company. Anay
then demanded that the company be audited and her shares be given to her.
ISSUE: Whether or not there is a partnership.
HELD: Yes, even though it was not reduced to writing, for a partnership can be
instituted in any form. The fact that it was registered as a sole proprietorship is of
no moment for such registration was only for the companys trade name.
Anay was not even an employee because when they ventured into the agreement,
they explicitly agreed to profit sharing this is even though Anay was receiving
commissions because this is only incidental to her efforts as a head marketer.
The Supreme Court also noted that a partner who is excluded wrongfully from a
partnership is an innocent partner. Hence, the guilty partner must give him his due
upon the dissolution of the partnership as well as damages or share in the profits
realized from the appropriation of the partnership business and goodwill. An
innocent partner thus possesses pecuniary interest in every existing contract that
was incomplete and in the trade name of the co-partnership and assets at the time
he was wrongfully expelled.
An unjustified dissolution by a partner can subject him to action for damages
because by the mutual agency that arises in a partnership, the doctrine of delectus
personae allows the partners to have the power, although not necessarily the right
to dissolve the partnership.
Tocaos unilateral exclusion of Anay from the partnership is shown by her memo to
the Cubao office plainly stating that Anay was, as of October 9, 1987, no longer the
vice-president for sales of Geminesse Enterprise. By that memo, petitioner Tocao
effected her own withdrawal from the partnership and considered herself as having
ceased to be associated with the partnership in the carrying on of the business.
Nevertheless, the partnership was not terminated thereby; it continues until the
winding up of the business.
NOTE: Motion for Reconsideration filed by Tocao and Belo decided by the SC on
September 20, 2001.
Belo is not a partner. Anay was not able to prove that Belo in fact received profits
from the company. Belo merely acted as a guarantor. His participation in the
business meetings was not as a partner but as a guarantor. He in fact had only
limited partnership. Tocao also testified that Belo received nothing from the profits.
The Supreme Court also noted that the partnership was yet to be registered in the
Securities and Exchange Commission. As such, it was understandable that Belo, who
was after all petitioner Tocaos good friend and confidante, would occasionally
participate in the affairs of the business, although never in a formal or official
capacity.


JARANTILLA, JR. vs. JARANTILLA
FACTS:
The present case stems from the complaint filed by Antonieta Jarantilla against
Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Doroteo
Jarantilla and Tomas Jarantilla, for the accounting of the assets and income of the co-
ownership, for its partition and the delivery of her share corresponding to eight
percent (8%), and for damages. Antonieta claimed that in 1946, she had entered
into an agreement with the defendants to engage in business through the execution
of a document denominated as "Acknowledgement of Participating Capital.
Antonieta also alleged that she had helped in the management of the business they
co-owned without receiving any salary. Antonieta further claimed co-ownership of
certain properties (the subject real properties) in the name of the defendants since
the only way the defendants could have purchased these properties were through
the partnership as they had no other source of income. The respondents did not
deny the existence and validity of the Acknowledgement of Participating Capital"
and in fact used this as evidence to support their claim that Antonietas 8% share
was limited to the businesses enumerated therein. The respondents denied using
the partnerships income to purchase the subject real properties. During the course
of the trial at the RTC, petitioner Federico Jarantilla, Jr., who was one of the original
defendants, entered into a compromise agreementwith Antonieta Jarantilla wherein
he supported Antonietas claims and asserted that he too was entitled to six percent
(6%) of the supposed partnership in the same manner as Antonieta was.
ISSUE: Whether or not the partnership subject of the Acknowledgement of
Participating Capitalfunded the subject real properties.
HELD:
Under Article 1767 of the Civil Code, there are two essential elements in a contract
of partnership:
(a) an agreement to contribute money, property or industry to a common fund; and
(b) intent to divide the profits among the contracting parties
. The first element is undoubtedly present in the case at bar, for, admittedly, all the
parties in this case have agreed to, and did, contribute money and property to a
common fund.
Hence, the issue narrows down to their intent in acting as they did
. It is not denied that all the parties in this case have agreed to contribute capital to a
common fund to be able to later on share its profits. They have admitted this fact,
agreed to its veracity, and even submitted one common documentary evidence to
prove such partnership - the Acknowledgement of Participating Capital. The
petitioner himself claims his share to be 6%, as stated in the Acknowledgement of
Participating Capital. However, petitioner fails to realize that this document
specifically enumerated the businesses covered by the partnership: Manila Athletic
Supply, Remotigue Trading in Iloilo City and Remotigue Trading in Cotabato City.
Since there was a clear agreement that the capital the partners contributed went to
the three businesses, then there is no reason to deviate from such agreement and go
beyond the stipulations in the document. There is no evidence that the subject real
properties were assets of the partnership referred to in the Acknowledgement of
Participating Capital.

VARGAS and COMPANY vs.
CHAN HANG CHIU, ET AL.
Facts:
On the 19th day of August, 1911, an action was begun by Chan Hang Chiu against the
plaintiff in this case as a mercantile association duly organized under the laws of the
Philippine Islands, to recover a sum of money. The summons and complaint were
placed in the hands of thesheriff, delivering to and leaving with one Jose Macapinlac
personally true copies thereof, hebeing the managing agent of said Vargas & Co. at
the time of such service. On July 2, 1912, the justice's court rendered judgment
against Vargas & Co. for the sum of 372.28.It is plaintiffs contention that
Vargas & Co. being a partnership, it is necessary, inbringing an action against it, to
serve the summons on all of the partners, deliveringto each one of them personally a
copy thereof; and that the summons in this casehaving been served on the managing
agent of the company only, the service was of no effect as against the company and
the members thereof and the judgment enteredby virtue of such a service was void.
Issue:
Whether or not it is indispensable in bringing an action to a partnership to serve
summons to all parties thereof.
Held:
No, it is dispensable.
Reasons:
1.

It has been the universal practice in the Philippine Islands since American
occupation, and was the practice prior to that time, to treat companies of the class to
which the plaintiff belongs as legal or juridical entities and to permit them to sue
and be sued in the name of the company, the summons being served solely on the
managing agent or other official of the company specified by the section of the Code
of Civil Procedure referred to. The plaintiff brings this action in the company name
and not in the name of the members of the firm. Actions against companies of the
class to which plaintiff belongs are brought, according to the uninterrupted practice,
against such companies in their company names and not against the individual
partners constituting the firm. In case the individual members of the firm must be
separately served with process, the rule also prevails that they must be parties to
the action, either plaintiffs or defendant, and that the action cannot be brought in
the name of or against the company itself.2. If it is necessary to serve the partners
individually, they are entitled to be heard individually in the action and they must,
therefore, be made parties thereto so that they can be heard. It would be idle to
serve process on individual members of a partnership if the litigation were to be
conducted in the name of the partnership itself and by the duly constituted officials
of the partnership exclusively.
In this case, is apparent that the plaintiff is acting contrary to its owncontention by
bringing the action in the name of the company. If not served withprocess, then the
action should be brought in the individual names of the partnersand not in the name
of the company itself


Campos Rueda & Co v Pacific Commercial (44 Phil 916)
Facts:
Campos, Rueda & Co., a limited partnership, is indebted to the appellants: Pacific
Commercial Co. , Asiatic Petroleum Co, and International Banking Corporation
amounting to not less than P1,000.00 (which were not paid more than 30 days prior
to the date of the filing by petitioners of the application for voluntary insolvency).
The trial court denied their petition on the ground that it was not proven, nor
alleged, that the members of the firm were insolvent at the time the application was
filed. It also held that the partners are personally and solidarily liable for the
consequences of the transactions of the partnership.

Issue:
Whether or not a limited partnership may be held to have committed an act of
insolvency.

Held:
Yes. A limited partnerships juridical personality is different from the personality of
its members. On general principle, the limited partnership must answer for and
suffer the consequence of its acts. Under our Insolvency Law, one of the acts of
bankruptcy upon w/c an adjudication of involuntary insolvency can be predicated is
the failure to pay obligations.
The failure of Campos, Rueda & Co., to pay its obligations constitutes an act w/c is
specifically provided for in the Insolvency Law for declaration of involuntary
insolvency. The petitioners have a right to a judicial decree declaring the
involuntary insolvency of said partnership.





TAI TONG CHUACHE & CO. VS. INSURANCE COMMISSION
Not clear I will make it clear this one on Monday.
Palomo acquired a parcel of land and a building located at, Davao City. Palomo
assumed the mortgage of the building in favor of S.S.S., which building was insured
with respondent S.S.S. Accredited Group of Insurers for P25,000.00.
Palomo obtained a loan from Tai Tong Chuache Inc. in the amount of P100,000.00.
To secure the payment of the loan, a mortgage was executed over the land and the
building in favor of Tai Tong Chuache & Co. (. Chua, representative of Thai Tong
Chuache & Co. insured the latter's interest with Travellers Multi-Indemnity
Corporation for P100,000.00 Palomo secured a Fire Insurance Policy covering the
building for P50,000.00 with respondent Zenith Insurance Corporation. Another
Fire Insurance Policy was procured from respondent Philippine British Assurance
Company, covering the same building for P50,000.00 and the contents thereof for
P70,000.00. On July 31, 1975, the building and the contents were totally razed by
fire. Demand was made from respondent Travellers Multi-Indemnity for its share in
the loss but the same was refused. Tai Tong Chuache & Co. filed a complaint in
intervention claiming the proceeds of the fire Insurance Policy issued by respondent
Travellers Multi-Indemnity. As adverted to above respondent Insurance
Commission dismissed spouses Palomos' complaint on the ground that the
insurance policy subject of the complaint was taken out by Tai Tong Chuache &
Company, petitioner herein, for its own interest only as mortgagee of the insured
property and thus complainant as mortgagors of the insured property have no right
of action against herein respondent. It likewise dismissed petitioner's complaint in
intervention in the following words: . The certification (Exhibit 'E-e') issued by the
Court of First Instance of Davao, Branch 11, indicate that the complainant was
Antonio Lopez Chua and not Tai Tong Chuache & Company.
It is the contention of the petitioner that respondent Insurance Commission decided
an issue not raised in the pleadings of the parties in that it ruled that a certain
Arsenio Lopez Chua is the one entitled to the insurance proceeds and not Tai Tong
Chuache & Company.

Issue: wheter Arsenio Lopez Chua is the one entitled to the insurance proceeds and
not Tai Tong Chuache & Company.

Held: No
We find the petition to be impressed with merit. It will be recalled that respondent
insurance company did not assail the validity of the insurance policy taken out by
petitioner over the mortgaged property. Neither did it deny that the said property
was totally razed by fire within the period covered by the insurance. Respondent, as
mentioned earlier advanced an affirmative defense of lack of insurable interest on
the part of the petitioner that before the occurrence of the peril insured against the
Palomos had already paid their credit due the petitioner. Respondent having
admitted the material allegations in the complaint, has the burden of proof to show
that petitioner has no insurable interest over the insured property at the time the
contingency took place. Upon that point, there is a failure of proof. Respondent, it
will be noted, exerted no effort to present any evidence to substantiate its claim,
while petitioner did. For said respondent's failure, the decision must be adverse to
it. However, as adverted to earlier, respondent Insurance Commission absolved
respondent insurance company from liability on the basis of the certification issued
by the then Court of First Instance of Davao, Branch II, that in a certain civil action
against the Palomos, Arsenio Lopez Chua stands as the complainant and not Tai
Tong Chuache. From said evidence respondent commission inferred that the credit
extended by herein petitioner to the Palomos secured by the insured property must
have been paid. Such is a glaring error which this Court cannot sanction.
Respondent Commission's findings are based upon a mere inference. Public
respondent argues however, that if the civil case really stemmed from the loan
granted to Azucena Palomo by petitioner the same should have been brought by Tai
Tong Chuache or by its representative in its own behalf. From the above premise
respondent concluded that the obligation secured by the insured property must
have been paid. respondent pointed out that the action must be brought in the name
of the real party in interest. We agree. However, it should be borne in mind that
petitioner being a partnership may sue and be sued in its name or by its duly
authorized representative. The fact that Arsenio Lopez Chua is the representative of
petitioner is not questioned. Petitioner's declaration that Arsenio Lopez Chua acts as
the managing partner of the partnership was corroborated by respondent insurance
company.
Thus Chua as the managing partner of the partnership may execute all acts of
administration including the right to sue debtors of the partnership in case of their
failure to pay their obligations when it became due and demandable. Or at the very
least, Chua being a partner of petitioner Tai Tong Chuache & Company is an agent of
the partnership. Being an agent, it is understood that he acted for and in behalf of
the firm.

Public respondent's allegation that the civil case flied by Arsenio Chua was in his
capacity as personal creditor of spouses Palomo has no basis. The respondent
insurance company having issued a policy in favor of herein petitioner which policy
was of legal force and effect at the time of the fire, it is bound by its terms and
conditions