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Court of Appeals:Rendered the assailed decision reversing the judgment of the trial
court.
MAIN ISSUE: WON Tan Eng Kee and Tan Eng Lay (the brothers) were partners in
Benguet Lumber.
HELD: No partnership; hence there is no dissolution, winding up or liquidation to
speak of.
RATION DECIDENDI:
A CONTRACT OF PARTNERSHIP IS DEFINED BY LAW AS ONE WHERE TWO OR MORE
PERSONS BIND THEMSELVES TO CONTRIBUTE MONEY, PROPERTY, OR INDUSTRY TO A
COMMON FUND, WITH THE INTENTION OF DIVIDING THE PROFITS AMONG THEMSELVES
TWO OR MORE PERSONS MAY ALSO FORM A PARTNERSHIP FOR THE EXERCISE OF A
PROFESSION:
In order to constitute a partnership, it must be established that:
1. Two or more persons bound themselves to contribute money,
property, or industry to a common fund, and
2. They intend to divide the profits among themselves.
The agreement need not be formally reduced into writing, since statute
allows the oral constitution of a partnership, save in two instances:
1. When immovable property or real rights are contributed, and (
2. When the partnership has a capital of three thousand pesos or
more.
THE BEST EVIDENCE WOULD HAVE BEEN THE CONTRACT OF PARTNERSHIP ITSELF, OR
THE ARTICLES OF PARTNERSHIP BUT THERE IS NONE:
April 1994:Sahot was already 59 years old. He had been incurring absences as
he was suffering from various ailments. Particularly causing him pain was his
left thigh, which greatly affected the performance of his task as a driver. He
inquired about his medical and retirement benefits with the Social Security
System (SSS) on April 25, 1994, but discovered that his premium payments had
not been remitted by his employer.
May 1994: Sahot had filed a week-long leave.
May 27th: He was medically examined and treated for EOR, presleyopia,
hypertensive retinopathy HPM, UTI, Osteoarthritis
On said grounds, Belen Paulino of the SBT Trucking Service management told
him to file a formal request for extension of his leave.
At the end of his week-long absence, Sahot applied for extension of his leave for
the whole month of June, 1994.
o It was at this time when petitioners allegedly threatened to terminate his
employment should he refuse to go back to work.
Sahots dilemma.
o Facing dismissal if he refused to work;
o But he could not retire on pension because petitioners never paid his
correct SSS premiums.
The fact remained he could no longer work as his left thigh
hurt abominably.
Petitioners ended his dilemma;
o They carried out their threat and dismissed him from work, effective
June 30, 1994. He ended up sick, jobless and penniless.
September 13, 1994: Sahot filed with the NLRC NCR Arbitration Branch, a
complaint for illegal dismissal;
Petitionerss Defenses: Admitted they had a trucking business in the 1950s but
denied employing helpers and drivers. They contend that private respondent was not
illegally dismissed as a driver because he was in fact petitioners industrial partner.
It was not until the year 1994, when SBT Trucking Corporation was
established, and only then did respondent Sahot become an employee of the
company, with a monthly salary that reached P4,160.00 at the time of his
separation.
THE NLRC NCR ARBITRATION BRANCH: No illegal dismissal in Sahots case:
Petitioners and private respondent were industrial partners before January 1994.
National Labor Relations Commission: Declared that private respondent was an
employee, not an industrial partner, since the start.
Court of Appeals: Held that private respondent was indeed an employee of
petitioners since 1958.
ISSUE: WON an employer-employee relationship existed between petitioners and
respondent Sahot
HELD: JAIME SAHOT was an employee, not an industrial partner
RATIO DECIDENDI:
A COMPUTATION OF THE AGE OF COMPLAINANT SHOWS THAT HE WAS ONLY TWENTYTHREE (23) YEARS WHEN HE STARTED WORKING WITH RESPONDENT AS TRUCK
HELPER:
How can we (SC) entertain in our mind that a twenty-three (23) year old
man, working as a truck helper, be considered an industrial partner.
Hence we (SC) rule that complainant was only an employee, not a partner
of respondents from the time complainant started working for respondent.
o There was no written agreement, no proof that he received a share
in petitioners profits, nor was there anything to show he had any
participation with respect to the running of the business.
THE ELEMENTS TO DETERMINE THE EXISTENCE OF AN EMPLOYMENT
RELATIONSHIP ARE:
(a) The selection and engagement of the employee;
(b) The payment of wages;
(c) The power of dismissal; and
(d) The employers power to control the employees conduct.
The most important element is the employers control of the employees
conduct, not only as to the result of the work to be done, but also as to the
means and methods to accomplish it.
RECORDS OF THE CASE SHOW THAT PRIVATE RESPONDENT ACTUALLY ENGAGED IN
WORK AS AN EMPLOYEE:
During the entire course of his employment he did not have the freedom to
determine where he would go, what he would do, and how he would do it.
He merely followed instructions of petitioners and was content to do so, as
long as he was paid his wages.
o Hence, Sahot had worked as a truck helper and driver of petitioners
not for his own pleasure but under the latters control.
ARTICLE 1767 OF THE CIVIL CODE STATES THAT IN A CONTRACT OF PARTNERSHIP
TWO OR MORE PERSONS BIND THEMSELVES TO CONTRIBUTE MONEY, PROPERTY OR
INDUSTRY TO A COMMON FUND, WITH THE INTENTION OF DIVIDING THE PROFITS
AMONG THEMSELVES:
Not one of these circumstances is present in this case.
No written agreement exists to prove the partnership between the parties.
Private respondent did not contribute money, property or industry for the
purpose of engaging in the supposed business.
There is no proof that he was receiving a share in the profits as a matter of
course, during the period when the trucking business was under operation.
Neither is there any proof that he had actively participated in the management,
administration and adoption of policies of the business.
o Thus, Jaime Sahot was not an industrial partner but an employee of
petitioners from 1958 to 1994.
3. TORRES VS CA and MANUEL TORRES
G.R. No. 134559 December 9, 1999
Facts of the Case:
Sisters Antonia Torres and Emeteria Baring (Petitioners) entered into a "joint
venture agreement" with Respondent Manuel Torres for the development of a
parcel of land into a subdivision.
o They executed a Deed of Sale covering the said parcel of land in favor
of respondent, who then had it registered in his name.
By mortgaging the property, respondent obtained from Equitable Bank a loan of
P40,000 which, under the Joint Venture Agreement, was to be used for the
development of the subdivision.
All three of them also agreed to share the proceeds from the sale of the
subdivided lots.
o The project did not push through, and the land was subsequently
foreclosed by the bank.
Petitioners Contentions:
The project failed because of "respondent's lack of funds or means and skills."
That respondent used the loan not for the development of the subdivision, but in
furtherance of his own company
Respondents Allegation:
That he used the loan to implement the Agreement for a total expense of
P85,000
Effected the survey and the subdivision of the lots.
Secured City Council's approval of the subdivision project
Caused the construction of roads, curbs and gutters.
Entered into a contract with an engineering firm for the building of sixty lowcost housing units and actually even set up a model house on one of the
subdivision lots.
The subdivision project failed because petitioners and their relatives had
separately caused the annotations of adverse claims on the title to the land,
which eventually scared away prospective buyers.
o That petitioners refused to cause the clearing of the claims, thereby
forcing him to give up on the project.
Petitioners filed the civil case which
Civil case dismissed by the trial court.
Court of Appeals: Held that petitioners and respondent had formed a partnership for
the development of the subdivision.
Thus, they must bear the loss suffered by the partnership in the same proportion
as their share in the profits stipulated in the contract.
Disagreeing with the trial court's pronouncement that losses as well as profits in
a joint venture should be distributed equally, 7 the CA invoked Article 1797 of
the Civil Code which provides:
Art. 1797 The losses and profits shall be distributed in
conformity with the agreement. If only the share of each partner in
the profits has been agreed upon, the share of each in the losses
shall be in the same proportion.
ISSUE: WON partnership agreement exists between the parties
HELD: The Contract clearly manifested the intention of the parties to form a
partnership
RATIO DECIDENDI:
Content of the Joint Venture Agreement:
This AGREEMENT by and between MR. MANUEL R. TORRES, the FIRST
PARTY, likewise, MRS. ANTONIA B. TORRES, and MISS EMETERIA
BARING, . . . the SECOND PARTY:
That, whereas, the SECOND PARTY, voluntarily offered the FIRST PARTY,
this property to be sub-divided by the FIRST PARTY;
Whereas, the FIRST PARTY had given the SECOND PARTY, the sum of:
TWENTY THOUSAND P20,000.00 upon the execution of this contract for the
property entrusted by the SECOND PARTY, for sub-division projects and
development purposes;
NOW THEREFORE, for and in consideration of the above covenants and
promises herein contained the respective parties hereto do hereby stipulate and
agree as follows:
That the SECOND PARTY signed an absolute Deed of Sale in the amount of
P25,513.50 for 1,700 square meters at P1.50 in favor of the FIRST PARTY, but
the SECOND PARTY did not actually receive the payment.
That the SECOND PARTY, had received from the FIRST PARTY, the
necessary amount of P20,000.00 pesos for their personal obligations and this
particular amount will serve as an advance payment from the FIRST PARTY for
the property mentioned to be sub-divided and to be deducted from the sales.
That the FIRST PARTY, will not collect from the SECOND PARTY, the
interest and the principal amount involving the amount of P20,000.00 Pesos
until the sub-division project is terminated and ready for sale to any interested
parties, and the amount of P20,000.00 pesos will be deducted accordingly.
That all general expenses and all costs involved in the sub-division project
should be paid by the FIRST PARTY, exclusively and all the expenses will not
be deducted from the sales after the development of the sub-division project.
That the sales of the sub-divided lots will be divided into 60% for the SECOND
PARTY and 40% for the FIRST PARTY, and additional profits or whatever
income deriving from the sales will be divided equally according to the
percentage agreed upon by both parties.
That the intended sub-division project of the property involved will start the
work and all improvements upon the adjacent lots will be negotiated in both
parties' favor and all sales shall [be] decided by both parties.
That the SECOND PARTIES, should be given an option to get back the
property mentioned provided the amount of P20,000.00 borrowed by the
SECOND PARTY, will be paid in full to the FIRST PARTY, including all
necessary improvements spent by the FIRST PARTY, and-the FIRST PARTY
will be given a grace period to turnover the property mentioned above.
That this AGREEMENT shall be binding and obligatory to the parties who
executed same freely and voluntarily for the uses and purposes therein stated.
ISSUE: WON the Clearing House, acting as a mere agent and performing strictly
administrative functions, and which did not insure or assume any risk in its own
name, was a partnership or association subject to tax as a corporation;
HELD: The petition is denied. The pool is taxable as a corporation, and that the
government's right to assess and collect the taxes had not prescribed.
Art. 1767 of the Civil Code recognizes the creation of a contract of partnership
when "two or more persons bind themselves to contribute money, property, or
Industry to a common fund, with the intention of dividing the profits among
themselves.
Its requisites are:
1. Mutual contribution to a common stock, and
2. A joint interest in the profits."
In other words, a partnership is formed when persons contract "to devote to a
common purpose either money, property, or labor with the intention of dividing
the profits between themselves."
Meanwhile, an association implies associates who enter into a "joint enterprise .
. . for the transaction of business."
(1) The pool has a common fund, consisting of money and other valuables that are
deposited in the name and credit of the pool. This common fund pays for the
administration and operation expenses of the pool.
(2) The pool functions through an executive board, which resembles the board of
directors of a corporation, composed of one representative for each of the ceding
companies.
(3) True, the pool itself is not a reinsurer and does not issue any insurance policy;
however, its work is indispensable, beneficial and economically useful to the
business of the ceding companies and Munich, because without it they would not
have received their premiums.
The ceding companies share "in the business ceded to the pool" and in the
"expenses" according to a "Rules of Distribution" annexed to the Pool
Agreement.
Profit motive or business is, therefore, the primordial reason for the pool's
formation.
As aptly found by the CTA:
o The fact that the pool does not retain any profit or income does not
obliterate an antecedent fact that of the pool being used in the
transaction of business for profit. It is apparent, and petitioners admit,
that their association or co-action was indispensable to the transaction
of the business; if together they have conducted business, profit must
have been the object as, indeed, profit was earned. Though the profit
was apportioned among the members, this is only a matter of
consequence, as it implies that profit actually resulted.
5. SECOND DIVISION
G.R. No. 127347 November 25, 1999
ALFREDO
N.
AGUILA,
JR., petitioner,
vs.
HONORABLE COURT OF APPEALS and FELICIDAD S. VDA. DE
ABROGAR, respondents.
Petitioner is the manager of A.C. Aguila & Sons, Co., a partnership engaged
in lending activities. Private respondent and her late husband, Ruben M.
Abrogar, were the registered owners of a house and lot in Marikina, Metro
Manila.
On April 18, 1991, private respondent entered into a MOA w/ A.C. Aquila
&Sons involving a pacto de retro sale of said house & lot.
Private respondent failed to redeem the property within the 90-day period as
provided in the MOA. Hence, petitioner caused the cancellation of TCT
No. 195101 and the issuance of a new certificate of title in the name of A.C.
Aguila and Sons, Co.[5]
Private respondent filed a petition for declaration of the nullity of the deed
of sale and a criminal complaint for forgery against petitioner alleging that
the signature of her husband was a forgery because he was already dead
when the deed was supposed to have been executed.
Petitioner now contends that he is not the real party in interest but
A.C. Aguila & Co., against which this case should have been
broughtThe petition is meritorious.
In this case, private respondent has not shown that A.C. Aguila & Sons,
Co., as a separate juridical entity, is being used for fraudulent, unfair, or
illegal purposes. Moreover, the title to the subject property is in the name
of A.C. Aguila & Sons, Co. and the Memorandum of Agreement was
executed between private respondent, with the consent of her late husband,
and A. C. Aguila & Sons, Co., represented by petitioner. Hence, it is the
Aurelio filed a suit against his brother Eduardo and herein respondent
Robert T. Yang (Yang) and several corporations for specific performance
and accounting.
Aurelio alleged that, since June 1973, he and Eduardo are into a joint
venture/partnership arrangement in the Odeon Theater business, which had
expanded thru investment in several corporations.
In 1992 however, the relationship between the brothers went sour. And so
Aurelio demanded an accounting and the liquidation of his share in the
partnership. Eduardo did not heed and so Aurelio sued Eduardo.
RATIO:
Art. 1771. A partnership may be constituted in any form, except where
immovable property or real rights are contributed thereto, in which case a public
instrument shall be necessary.
Art. 1772. Every contract of partnership having a capital of three
thousand pesos or more, in money or property, shall appear in a public
instrument, which must be recorded in the Office of the Securities and Exchange
Commission.
Failure to comply with the requirement of the preceding paragraph shall
not affect the liability of the partnership and the members thereof to third
persons.
Art. 1773. A contract of partnership is void, whenever immovable
property is contributed thereto, if an inventory of said property is not made,
signed by the parties, and attached to the public instrument.
Insum, Annex A-1 cannot support the existence of the partnership sued
upon and sought to be enforced.
7. THIRD DIVISION
G.R. No. 136448 November 3, 1999
LIM
TONG
LIM, petitioner,
vs.
PHILIPPINE FISHING GEAR INDUSTRIES, INC., respondent.
b) If the four (4) vessel[s] and the fishing net will be sold at a higher
price than P5,750,000.00 whatever will be the excess will be divided
into 3: 1/3 Lim Tong Lim; 1/3 Antonio Chua; 1/3 Peter Yao;
PANGANIBAN, J.:
c) If the proceeds of the sale the vessels will be less than P5,750,000.00
whatever the deficiency shall be shouldered and paid to JL Holding
Corporation by 1/3 Lim Tong Lim; 1/3 Antonio Chua; 1/3 Peter Yao.
Facts:
ISSUE: Whether by their acts, Lim, Chua and Yao could be deemed to have
entered into a partnership.
HELD: Yes.
RATIO:
Art. 1767 By the contract of partnership, two or more persons bind
themselves to contribute money, property, or industry to a common fund, with the
intention of dividing the profits among themselves.
On November 18, 1992, the trial court rendered its Decision, ruling that
Philippine Fishing Gear Industries was entitled to the Writ of
Attachment and that Chua, Yao and Lim, as general partners, were
jointly liable to pay respondent.
The trial court ruled that a partnership among Lim, Chua and Yao
existed based (1) on the testimonies of the witnesses presented and (2)
on a Compromise Agreement executed by the three 9 in Civil Case No.
1492-MN which Chua and Yao had brought against Lim in the RTC of
Malabon, Branch 72, for (a) a declaration of nullity of commercial
documents; (b) a reformation of contracts; (c) a declaration of
ownership of fishing boats; (d) an injunction and (e) damages. 10 The
Compromise Agreement provided:
a) That the parties plaintiffs & Lim Tong Lim agree to have the four (4)
vessels sold in the amount of P5,750,000.00 including the fishing net.
It is clear that Chua, Yao and Lim had decided to engage in a fishing
business, which they started by buying boats worth P3.35 million, financed
by a loan secured from Jesus Lim who was petitioner's brother. In their
Compromise Agreement, they subsequently revealed their intention to pay
the loan with the proceeds of the sale of the boats, and to divide equally
among them the excess or loss. These boats, the purchase and the repair of
which were financed with borrowed money, fell under the term "common
fund" under Article 1767. The contribution to such fund need not be
cash or fixed assets; it could be an intangible like credit or industry.
That the parties agreed that any loss or profit from the sale and
operation of the boats would be divided equally among them also shows
that they had indeed formed a partnership.
The partnership extended not only to the purchase of the boat, but also to
that of the nets and the floats. The fishing nets and the floats, both essential
to fishing, were obviously acquired in furtherance of their business. It
would have been inconceivable for Lim to involve himself so much in
buying the boat but not in the acquisition of the aforesaid equipment,
without which the business could not have proceeded.
They purchased the boats, which constituted the main assets of the partnership, and
they agreed that the proceeds from the sales and operations thereof would be divided
among them.
Petitioner: claims that the compromise agreement was entered into only to end the
dispute among them, but not to adjudicate their preexisting rights and obligations.
His arguments are baseless. The Agreement was but an embodiment of the
relationship extant among the parties prior to its execution.
SC: Petitioner entered into a business agreement with Chua and Yao, in which debts
were undertaken in order to finance the acquisition and the upgrading of the vessels
which would be used in their fishing business. The sale of the boats, as well as the
division among the three of the balance remaining after the payment of their loans,
proves beyond cavil that F/B Lourdes, though registered in his name, was not his
own property but an asset of the partnership. It is not uncommon to register the
properties acquired from a loan in the name of the person the lender trusts, who in
this case is the petitioner himself. After all, he is the brother of the creditor, Jesus
Lim.
8. Tacao vs CA
Facts:
Nenita A. Anay met William T. Belo, then the vice-president for operations
of Ultra Clean Water Purifier, through her former employer in Bangkok.
Belo introduced Anay to Marjorie Tocao, who conveyed her desire to enter
into a joint venture with her for the importation and local distribution of
kitchen cookwares.
Belo volunteered to finance the joint venture and assigned to Anay the job
of marketing the product considering her experience and established
relationship with West Bend Company, a manufacturer of kitchen wares in
Wisconsin, U.S.A
Under the joint venture, Belo acted as capitalist, Tocao as president and
general manager, and Anay as head of the marketing department and later,
vice-president for sales.
Anay organized the administrative staff and sales force while Tocao hired
and fired employees, determined commissions and/or salaries of the
employees, and assigned them to different branches.
The parties agreed that Belos name should not appear in any documents
relating to their transactions with West Bend Company. Instead, they agreed
to use Anays name in securing distributorship of cookware from that
company.
The parties agreed further that Anay would be entitled to: (1) ten percent
(10%) of the annual net profits of the business; (2) overriding commission
of six percent (6%) of the overall weekly production; (3) thirty percent
(30%) of the sales she would make; and (4) two percent (2%) for her
demonstration services.
The agreement was not reduced to writing on the strength of Belos
assurances that he was sincere, dependable and honest when it came to
financial commitments.
Secondly, Tocaos admissions militate against an employeremployee relationship because admitted that, like her, ANAY
received only commissions and transportation and representation
allowances and not a fixed salary.
If indeed petitioner Tocao was private respondents employer, it is difficult
to believe that they shall receive the same income in the business. In a
partnership, each partner must share in the profits and losses of the venture,
except that the industrial partner shall not be liable for the losses.[31]
As an industrial partner, private respondent had the right to demand for a
formal accounting of the business and to receive her share in the net
profit.[32].
It is not surprising then that, even after private respondent had been
unceremoniously booted out of the partnership in October 1987, she still
received her overriding commission until December 1987.
Undoubtedly, petitioner Tocao unilaterally excluded private respondent
from the partnership to reap for herself and/or for petitioner Belo financial
gains resulting from private respondents efforts to make the business
venture a success.
Her instruction to Lina Torda Cruz, marketing manager, not to allow private
respondent to hold office in both the Makati and Cubao sales offices
concretely spoke of her perception that private respondent was no longer
necessary in the business operation,[39] and resulted in a falling out between
the two.
However, a mere falling out or misunderstanding between partners does not
convert the partnership into a sham organization.[40] The partnership exists
until dissolved under the law. Since the partnership created by petitioners
and private respondent has no fixed term and is therefore a partnership at
will predicated on their mutual desire and consent, it may be dissolved by
the will of a partner.
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.[42]
As the Trial court held 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.
o
9. SUNGA-CHAN vs.CHUA,
Facts:
Lamberto T. Chua filed a complaint against Lilibeth Sunga Chan and
Cecilia Sunga, daughter and wife, respectively of the deceased Jacinto L.
Sunga for "Winding Up of Partnership Affairs, Accounting, Appraisal and
Recovery of Shares and Damages.
CHUA alleged that he verbally entered into a partnership with Jacinto in the
distribution of Shellane (LPG) in Manila.
For business convenience, CHUA and Jacinto agreed to register the
business name of their partnership, SHELLITE GAS APPLIANCE
CENTER under the name of Jacinto as a sole proprietorship.
CHUA and JACINTO both contributed P100,000.00, with the intention that
the profits would be equally divided between them.
The partnership had Jacinto as manager, assisted by Josephine Sy, a sister
of the wife respondent, Erlinda Sy.
As compensation, Jacinto would receive a manager's fee or remuneration of
10% of the gross profit and Josephine would receive 10% of the net profits,
in addition to her wages and other remuneration from the business.
From the time that Shellite opened for business, its business operation went
quite and was profitable.
Upon Jacinto's death, his surviving wife, petitioner Cecilia and particularly
his daughter took over the operations, control, custody, disposition and
management of Shellite without respondent's consent.
respondent demanded upon petitioners for accounting, inventory, appraisal,
winding up and restitution of his net shares in the partnership but petitioners
failed to comply..
CHUA claimed that after Lilibeth ran out the alibis and reasons to evade
respondent's demands, she disbursed out of the partnership funds the
amount of P200,000.00 and partially paid the same to respondent.
Petitioner Lilibeth allegedly informed respondent that the P200,000.00
represented partial payment of the latter's share in the partnership, with a
promise that the she would make the complete inventory and winding up of
the properties of the business establishment. Despite such commitment,
petitioners failed to comply with their duty to account, and continued to
benefit from the assets and income of Shellite to the damage and prejudice
of respondent.
TC ruled in favour of CHUA.
CA affirms.
Petitioners now question the correctness of the finding of the trial court and
the Court of Appeals that a partnership existed between respondent and
Jacinto in the absence of any written document to show such partnership
between CHUA and Jacinto.
The essential profits that must be proven to that a partnership was agreed
upon are
o mutual contribution to a common stock, and
o a joint interest in the profits.8
in view of the absence of the written contract of partnership between
respondent and Jacinto, respondent resorted to the introduction of
documentary and testimonial evidence to prove said partnership.
***The crucial issue to settle then is to whether or not the "Dead Man's Statute"
applies to this case so as to render inadmissible respondent's testimony and that of
his witness, Josephine.
The "Dead Man's Statute" provides that if one party to the alleged
transaction is precluded from testifying by death, insanity, or other mental
disabilities, the surviving party is not entitled to the undue advantage of
giving his own uncontradicted and unexplained account of the transaction. 9
REQUISITES:
"1. The witness is a party or assignor of a party to case or persons in whose
behalf a case in prosecuted.
2. The action is against an executor or administrator or other representative
of a deceased person or a person of unsound mind;
3. The subject-matter of the action is a claim or demand against the estate of
such deceased person or against person of unsound mind;
4. His testimony refers to any matter of fact of which occurred before the
death of such deceased person or before such person became of unsound
mind."10
Two reasons forestall the application of the "Dead Man's Statute" to this
case.
o First, petitioners filed a compulsory counterclaim11 against
respondents in their answer before the trial court, and with the
filing of their counterclaim, petitioners themselves effectively
removed this case from the ambit of the "Dead Man's
Statute".12 Well entrenched is the rule that when it is the executor
or administrator or representatives of the estates that sets up the
counterclaim, the plaintiff, herein respondent, may testify to
occurrences before the death of the deceased to defeat the
counterclaim.13
o Second, the testimony of Josephine is not covered by the "Dead
Man's Statute" for the simple reason that she is not "a party or
assignor of a party to a case or persons in whose behalf a case is
prosecuted."
Both TC & CA considered the evidence for respondent as sufficient to
prove the formation of partnership, albeit an informal one.
petitioners did not present any evidence in their favor during trial
This Court can no longer be tasked to go over the proofs presented by the
parties and analyze, assess and weigh them to ascertain if the trial court and
the appellate court were correct in according superior credit to this or that
piece of evidence of one party or the other.18
Joint Venture
The Lazatins agreed to subject the title over the subject property to an
escrow agreement. Conformably with the escrow agreement, the owners
duplicate of the title was deposited with the China Banking Corporation.
However, Primelink failed to immediately secure a Development
Permit from Tagaytay City, and applied the permit only on August 30,
1995. On October 12, 1995, the City issued a Development Permit to
Primelink.
In a Letter, the Lazatins, through counsel, demanded that Primelink comply
with its obligations under the JVA, otherwise the appropriate action would
be filed against it to protect their rights and interests.
This impelled the officers of Primelink to meet with the Lazatins and
enabled the latter to review its business records/papers. However, the
Lazatins informed Primelink that they had decided to rescind the JVA
effective upon its receipt of the said letter. The Lazatins demanded that
Primelink cease and desist from further developing the property.
The Lazatins alleged, among others, that, despite the lapse of almost four
(4) years from the execution of the JVA and the delivery of the title and
possession of the land to defendants, the land development aspect of the
project had not yet been completed, and the construction of the housing
units had not yet made any headway
They also alleged that Primelink completely disregarded previously agreed
accounting and auditing procedures, checks and balances system installed
for the mutual protection of both parties, and the scheduled regular
meetings were seldom held to the detriment and disadvantage of plaintiffs.
Plaintiffs also claimed that in a sales-income-costs projection prepared and
submitted by defendants, they (plaintiffs) stood to receive the amount
of P70,218,296.00 as their net share in the joint venture project; to date,
however, after almost four (4) years and despite the undertaking in the JVA
that plaintiffs shall initially get 20% of the agreed net revenue during the
first two (2) years (on the basis of the 60%-40% sharing) and their full 40%
share thereafter, defendants did not deliver these shares which would
amount to no less than P40,000,000.00.
Primelink, in its defense, said the complaint was premature as they havent
submitted to Arbitration, pursuant to the JVA stipulation
The RTC ruled for the Lazatins, rescinded the JVA and issued a TRO
againstPrimelink
The RTC found that as of September 30, 1995, the joint venture project
earned a net income of aboutP2,603,810.64. This amount, however, was
drastically reduced in a subsequent financial report submitted by the
defendants to P1,954,216.39. Shortly thereafter, and to the dismay of the
plaintiffs, the defendants submitted an income statement and a balance sheet
indicating a net loss of P5,122,906.39 as of June 30, 1997.
CA affirmed upon appeal and awarded to Lazatins "all improvements" on
the project without requiring them to pay the value thereof or to reimburse
Primelink for all expenses
Hence, this appeal
PRIMELINKs argument: argued that the LAZATINs in their complaint did
not allege, did not prove and did not pray that they are and should be
entitled to take over the development of the project, and that the
improvements and existing structures which were introduced by
PRIMELINK after spending more or less Forty Million Pesos be awarded
to them. They merely asked in the complaint that the joint venture
agreement be rescinded, and that the parcels of land they contributed to the
project be returned to them.
The order of the court for PRIMELINK to return the property with all the
improvements thereon is just a necessary consequence to the order of
rescission.
As a general rule, the relation of the parties in joint ventures is governed by
their agreement. When the agreement is silent on any particular issue, the
general principles of partnership may be resorted to. In Aurbach v. Sanitary
Wares Manufacturing Corporation, the Supreme Court discussed the
following points regarding joint ventures and partnership:
Joint venture is, in fact, hardly distinguishable from the
partnership, since elements are similar community of interest in
the business, sharing of profits and losses, and a mutual right of
control.
The main distinction is that the partnership contemplates a general
business with some degree of continuity, while the joint venture is
formed for the execution of a single transaction, and is thus of a
temporary nature.
This observation is not entirely accurate in this jurisdiction, since
under the Civil Code, a partnership may be particular or universal,
and a particular partnership may have for its object a specific
undertaking. (Art. 1783, Civil Code).
It would seem therefore that, under Philippine law, a joint
venture is a form of partnership and should thus be governed
by the laws of partnership.
The Supreme Court has, however, recognized a distinction
between these two business forms, and has held that although a
corporation cannot enter into a partnership contract, it may,
however, engage in a joint venture with others.
The LAZATINs were able to establish fraud on the part of PRIMELINK which
was a pattern of what appears to be a scheme or plot to reduce and eventually
blot out the net incomes generated from sales of housing units by the
defendants.
Under Article 1838 of the Civil Code, where the partnership contract is
rescinded on the ground of the fraud or misrepresentation of one of the
parties thereto, the party entitled to rescind is, without prejudice to any
other right is entitled to a lien on, or right of retention of, the surplus of
the partnership property after satisfying the partnership liabilities to third
persons for any sum of money paid by him for the purchase of an interest in the
partnership and for any capital or advance contributed by him. In the instant
case, the joint venture still has outstanding liabilities to third parties or the
buyers of the property.
When the RTC rescinded the JVA on complaint of respondents based on the
evidence on record that petitioners willfully and persistently committed a
breach of the JVA, the court thereby dissolved/cancelled the partnership.With
the rescission of the JVA on account of petitioners fraudulent acts, all
authority of any partner to act for the partnership is terminated except so far as
may be necessary to wind up the partnership affairs or to complete transactions
begun but not yet finished.
On dissolution, the partnership is not terminated but continues until the
winding up of partnership affairs is completed. 56 Winding up means the
administration of the assets of the partnership for the purpose of terminating the
business and discharging the obligations of the partnership.
The transfer of the possession of the parcels of land and the improvements
thereon to respondents was only for a specific purpose: the winding up of
partnership affairs, and the partition and distribution of the net partnership
assets as provided by law.57 After all, Article 1836 of the New Civil Code
provides that unless otherwise agreed by the parties in their JVA, respondents
have the right to wind up the partnership affairs:
Art. 1836. Unless otherwise agreed, the partners who
have not wrongfully dissolved the partnership or the legal
representative of the last surviving partner, not insolvent,
has the right to wind up the partnership affairs, provided,
however, that any partner, his legal representative or his
assignee, upon cause shown, may obtain winding up by
the court.
It must be stressed, too, that although respondents acquired possession of the
lands and the improvements thereon, the said lands and improvements
remained partnership property, subject to the rights and obligations of the
parties, inter se, of the creditors and of third parties under Articles 1837 and
1838 of the New Civil Code, and subject to the outcome of the settlement of
the accounts between the parties as provided in Article 1839 of the New Civil
Code, absent any agreement of the parties in their JVA to the contrary. 58 Until
the partnership accounts are determined, it cannot be ascertained how much
any of the parties is entitled to, if at all.
It was thus premature for petitioner Primelink to be demanding that it be
indemnified for the value of the improvements on the parcels of land owned by
the joint venture/partnership. Notably, the JVA of the parties does not contain
any provision designating any party to wind up the affairs of the partnership.
Thus, under Article 1837 of the New Civil Code, the rights of the parties when
dissolution is caused in contravention of the partnership agreement are as
follows:
(1) Each partner who has not caused dissolution wrongfully shall have:
(a) All the rights specified in the first paragraph of this article, and
(b) The right, as against each partner who has caused the
dissolution wrongfully, to damages for breach of the agreement.
(2) The partners who have not caused the dissolution wrongfully, if they all
desire to continue the business in the same name either by themselves or
jointly with others, may do so, during the agreed term for the partnership
and for that purpose may possess the partnership property, provided they
secure the payment by bond approved by the court, or pay to any partner
who has caused the dissolution wrongfully, the value of his interest in the
partnership at the dissolution, less any damages recoverable under the
second paragraph, No. 1(b) of this article, and in like manner indemnify him
against all present or future partnership liabilities.
(3) A partner who has caused the dissolution wrongfully shall have:
(a) If the business is not continued under the provisions of the
second paragraph, No. 2, all the rights of a partner under the first
paragraph, subject to liability for damages in the second paragraph,
No. 1(b), of this article.
(b) If the business is continued under the second paragraph, No. 2,
of this article, the right as against his co-partners and all claiming
through them in respect of their interests in the partnership, to have
the value of his interest in the partnership, less any damage caused
to his co-partners by the dissolution, ascertained and paid to him in
cash, or the payment secured by a bond approved by the court, and
to be released from all existing liabilities of the partnership; but in
ascertaining the value of the partners interest the value of the
good-will of the business shall not be considered.
And under Article 1838 of the New Civil Code, the party entitled to rescind
is, without prejudice to any other right, entitled:
(1) To a lien on, or right of retention of, the surplus of the partnership
property after satisfying the partnership liabilities to third persons for any
sum of money paid by him for the purchase of an interest in the partnership
and for any capital or advances contributed by him;
(2) To stand, after all liabilities to third persons have been satisfied, in the
place of the creditors of the partnership for any payments made by him in
respect of the partnership liabilities; and
(3) To be indemnified by the person guilty of the fraud or making the
representation against all debts and liabilities of the partnership.
Art. 1839. In settling accounts between the partners after dissolution, the following
rules shall be observed, subject to any agreement to the contrary:
(1) The assets of the partnership are:
(9) Where a partner has become insolvent or his estate is insolvent, the
claims against his separate property shall rank in the following order:
Facts:
ISSUE: WON the partnership of Bito, Misa&Lozada (now Bito, Lozada, Ortega&
Castillo) is a partnership at will
HELD: YES
RATIO:
The birth and life of a partnership at will is predicated on the mutual desire
and consent of the partners. The right to choose with whom a person wishes
to associate himself is the very foundation and essence of that partnership.
Its continued existence is, in turn, dependent on the constancy of that
mutual resolve, along with each partner's capability to give it, and the
absence of a cause for dissolution provided by the law itself. Verily, any
one of the partners may, at his sole pleasure, dictate a dissolution of the
partnership at will. He must, however, act in good faith, not that the
attendance of bad faith can prevent the dissolution of the partnership 4 but
that it can result in a liability for damages.
In passing, neither would the presence of a period for its specific duration or
the statement of a particular purpose for its creation prevent the dissolution
of any partnership by an act or will of a partner. 6 Among partners, 7 mutual
agency arises and the doctrine of delectus personae allows them to have
the power, although not necessarily theright, to dissolve the partnership. An
unjustified dissolution by the partner can subject him to a possible action
for damages.
The dissolution of a partnership is the change in the relation of the parties
caused by any partner ceasing to be associated in the carrying on, as might
be distinguished from the winding up of, the business. Upon its dissolution,
the partnership continues and its legal personality is retained until the
complete winding up of its business culminating in its termination.
The liquidation of the assets of the partnership following its dissolution is
governed by various provisions of the Civil Code; 10 however, an agreement
of the partners, like any other contract, is binding among them and normally
takes precedence to the extent applicable over the Code's general
provisions. We here take note of paragraph 8 of the "Amendment to Articles
of Partnership" reading thusly:
. . . In the event of the death or retirement of any partner, his interest in the
partnership shall be liquidated and paid in accordance with the existing
agreements and his partnership participation shall revert to the Senior
Partners for allocation as the Senior Partners may determine; provided,
however, that with respect to the two (2) floors of office condominium
which the partnership is now acquiring, consisting of the 5th and the 6th
floors of the Alpap Building, 140 Alfaro Street, Salcedo Village, Makati,
Metro Manila, their true value at the time of such death or retirement shall
The term "retirement" must have been used in the articles, as we so hold, in
a generic sense to mean the dissociation by a partner, inclusive of
resignation or withdrawal, from the partnership that thereby dissolves it.
Eddie Alarilla supplied chemicals and rawhide to Irma L. Idos for use in the
latter's business of manufacturing leather.
In 1985, he joined the accused-appellant's business and formed with her a
partnership under the style "Tagumpay Manufacturing," with offices in
Bulacan and Cebu City.
However, the partnership was short lived. In January, 1986 the parties
agreed to terminate their partnership.
Upon liquidation of the business the partnership had as of May 1986
receivables and stocks worth P1,800,000.00. The Alarilla share of the assets
was P900,000.00 to pay for which Irma Idos issued 4 postdated checks
The complainant was able to encash the first, second, and fourth checks, but
the third check which is the subject of this case, was dishonored on October
14, 1986 for insufficiency of funds.
The complainant demanded payment from the accused-appellant but the
latter failed to pay.
Accordingly, on December 18, 1986, through counsel, he made a formal
demand for payment. (Exh. B) In a letter dated January 2, 1987, the
accused-appellant denied liability. She claimed that the check had been
given upon demand of complainant in May 1986 only as "assurance" of his
share in the assets of the partnership and that it was not supposed to be
deposited until the stocks had been sold.
Complainant then filed his complaint in the Office of the Provincial Fiscal
of Bulacan which on August 22, 1988 filed an information for violation of
BP Blg. 22 against accused-appellant
The lower court found Idos guilty
ISSUE: Whether the subject check was issued by petitioner to apply on account or
for value, that is, as part of the consideration of a "buy-out" of said complainant's
interest in the partnership, and not merely as a commitment on petitioner's part to
return the investment share of complainant, along with any profit pertaining to said
share, in the partnership
(2) Winding Up Defined
HELD: The check was issued merely to evidence the complainant's share in the
partnership property, or to assure the latter that he would receive in time his due
share therein
In the present case, with regard to the first issue, evidence on record would
show that the subject check was to be funded from receivables to be
collected and goods to be sold by the partnership, and only when such
collection and sale were realized.
There is sufficient basis for the assertion that Idos issued the subject check
(Metrobank Check No. 103115490 dated October 30, 1986, in the amount
of P135,828.87) to evidence only complainant's share or interest in the
partnership, or at best, to show her commitment that when receivables are
collected and goods are sold, she would give to private complainant the net
amount due him representing his interest in the partnership. It did not
involve a debt of or any account due and payable by the petitioner.
Two facts stand out. Firstly, three of four checks were properly encashed by
complainant; only one (the third) was not. But eventually even this one was
redeemed by petitioner. Secondly, even private complainant admitted that
there was no consideration whatsoever for the issuance of the check, whose
funding was dependent on future sales of goods and receipts of payment of
account receivables.
Now, it could not be denied that though the parties petitioner and
complainant had agreed to dissolve the partnership, such ageement did
not automatically put an end to the partnership, since they still had to sell
the goods on hand and collect the receivables from debtors. In short, they
were still in the process of "winding up" the affairs of the partnership, when
the check in question was issued.
Under the Civil Code, the three final stages of a partnership are (1) dissolution; (2)
winding-up; and (3) termination. These stages are distinguished, to wit:
(1) Dissolution Defined
Since the partnership has not been terminated, the petitioner and private
complainant remained as co-partners. The check was thus issued by the
petitioner to complainant, as would a partner to another, and not as payment
from a debtor to a creditor.The more tenable view, one in favor of the
accused, is that the check was issued merely to evidence the complainant's
share in the partnership property, or to assure the latter that he would
receive in time his due share therein.
For there is nothing on record which even slightly suggest that petitioner
ever became interested in acquiring, much less keeping, the shares of the
complainant.
What is very clear therefrom is that the petitioner exerted her best efforts to
sell the remaining goods and to collect the receivables of the partnership, in
order to come up with the amount necessary to satisfy the value of
complainant's interest in the partnership at the dissolution thereof.
To go by accepted custom of the trade, we are more inclined to the view
that the subject check was issued merely to evidence complainant's interest
in the partnership. Thus, we are persuaded that the check was not intended
to apply on account or for value; rather it should be deemed as having been
drawn without consideration at the time of issue.
In the case at bar, as earlier discussed, petitioner issued the check merely to
evidence the proportionate share of complainant in the partnership assets
upon its dissolution. Payment of that share in the partnership was
conditioned on the subsequent realization of profits from the unsold goods
and collection of the receivables of the firm. This condition must be
satisfied or complied with before the complainant can actually "encash" the
check. The reason for the condition is that petitioner has no independent
means to satisfy or discharge the complainant's share, other than by the
future sale and collection of the partnership assets. Thus, prior to the selling
of the goods and collecting of the receivables, the complainant could not, as
of yet, demand his proportionate share in the business. This situation would
hold true until after the winding up, and subsequent termination of the
partnership. For only then, when the goods were already sold and
receivables paid that cash money could be availed of by the erstwhile
partners.
Complainant did not present any evidence that petitioner signed and issued
four checks actually knowing that funds therefor would be insufficient at
the time complainant would present them to the drawee bank. For it was
uncertain at the time of issuance of the checks whether the unsold goods
would have been sold, or whether the receivables would have been collected
by the time the checks would be encashed. As it turned out, three were fully
funded when presented to the bank; the remaining one was settled only later
on.
Since petitioner issued these four checks without actual knowledge of the
insufficiency of funds, she could not be held liable under B.P. 22 when one
was not honored right away. For it is basic doctrine that penal statutes such
as B.P. 22 "must be construed with such strictness as to carefully safeguard
the rights of the defendant . . ." 24 The element of knowledge of
insufficiency of funds has to be proved by the prosecution; absent said
proof, petitioner could not be held criminally liable under that law.
Moreover, the presumption of prima facie knowledge of such insufficiency
in this case was actually rebutted by petitioner's evidence.
themselves that Maglana and Rojas shall purchase the interest, share and
participation in the Partnership of Pahamotang assessed in the amount of P31,501.12
pursued the same purposes and the capital contributions of Rojas and Maglana as
stipulated in both partnerships call for the same amounts.
After the withdrawal of Pahamotang, the partnership was continued by Maglana and
Rojas without the benefit of any written agreement or reconstitution of their written
Articles of Partnership
fact that Maglana on March 17, 1957, wrote Rojas, reminding the latter of his
obligation to contribute either in cash or in equipment, to the capital investment of
the partnership as well as his obligation to perform his duties as logging
superintendent. This reminder cannot refer to any other but to the provisions of the
duly registered Articles of Co-Partnership. As earlier stated, Rojas replied that he
will not be able to comply with the promised contributions and he will not work as
logging superintendent. By such statements, it is obvious that Roxas understood what
Maglana was referring to and left no room for doubt that both considered themselves
governed by the articles of the duly registered partnership.
On January 28, 1957, Rojas entered into a management contract with another
logging enterprise, the CMS Estate, Inc. He left and abandoned the partnership
On February 4, 1957, Rojas withdrew his equipment from the partnership for use in
the newly acquired area
The equipment withdrawn were his supposed contributions to the first partnership
and was transferred to CMS Estate, Inc. by way of chattel mortgage
On March 17, 1957, Maglana wrote Rojas reminding the latter of his obligation to
contribute, either in cash or in equipment, to the capital investments of the
partnership as well as his obligation to perform his duties as logging superintendent.
Two weeks after March 17, 1957, Rojas told Maglana that he will not be able to
comply with the promised contributions and he will not work as logging
superintendent. Maglana then told Rojas that the latter's share will just be 20% of the
net profits. Such was the sharing from 1957 to 1959 without complaint or dispute
Meanwhile, Rojas took funds from the partnership more than his contribution.
Maglana notified Rojas that he dissolved the partnership
Rojas filed an action before the Court of First Instance of Davao against Maglana for
the recovery of properties, accounting, receivership and damages.
ISSUE:
1.The main issue in this case is the nature of the partnership and legal relationship of
the Maglana-Rojas after Pahamotang retired from the second partnership.
2.whether or not Maglana can unilaterally dissolve the partnership in the case at bar
RULING:
1.After a careful study of the records as against the conflicting claims of Rojas and
Maglana, it appears evident that it was not the intention of the partners to dissolve
the first partnership, upon the constitution of the second one, which they
unmistakably called an "Additional Agreement" Except for the fact that they took in
one industrial partner; gave him an equal share in the profits and fixed the term of
the second partnership to thirty (30) years, everything else was the same. Thus, they
adopted the same name, EASTCOAST DEVELOPMENT ENTERPRISES, they
Under the circumstances, the relationship of Rojas and Maglana after the withdrawal
of Pahamotang can neither be considered as a De Facto Partnership, nor a
Partnership at Will, for as stressed, there is an existing partnership, duly registered.
2. Yes
Hence, as there are only two parties when Maglana notified Rojas that he dissolved
the partnership, it is in effect a notice of withdrawal.
Under Article 1830, par. 2 of the Civil Code, even if there is a specified term, one
partner can cause its dissolution by expressly withdrawing even before the expiration
of the period, with or without justifiable cause. Of course, if the cause is not justified
or no cause was given, the withdrawing partner is liable for damages but in no case
can he be compelled to remain in the firm. With his withdrawal, the number of
members is decreased, hence, the dissolution. And in whatever way he may view the
situation, the conclusion is inevitable that Rojas and Maglana shall be guided in the
liquidation of the partnership by the provisions of its duly registered Articles of CoPartnership; that is, all profits and losses of the partnership shall be divided "share
and share alike" between the partners.
It is a settled rule that when a partner who has undertaken to contribute a sum of
money fails to do so, he becomes a debtor of the partnership for whatever he may
have promised to contribute (Article 1786, Civil Code) and for interests and damages
from the time he should have complied with his obligation (Article 1788, Civil
Code) (Moran, Jr. v. Court of Appeals, 133 SCRA 94 [1984]). Being a contract of
partnership, each partner must share in the profits and losses of the venture. That is
the essence of a partnership.
18. Philex Mining Corp vs. CIR
FACTS:
Petitioner entered into an agreement withBaguio Gold, where the former agreed
tomanage the mining operations of the latter. The agreement was evidenced by a
Powerof Attorney. It was indicated in the saiddocument, that Baguio Gold would
contribute P11M under its owner's account plus any of its income that is left in the
project, in addition to its actual mining claim. Meanwhile, petitioner's contribution
would consist of its expertise in the management and operation of mines, aswell as
the manager's account which is comprised of P11M in funds and property and
petitioner's "compensation" asmanager that cannot be paid in cash. The mining
suffered serious loses whichended business of both parties evidenced bytheir
execution of a compromiseagreement. The CIR assessed Philex Mining for
taxdeficiencies. It stressed that Philex enteredinto a partnership with Baguio
Gold.Petitioner denied the allegations of the CIRand maintained that its advances of
moneyand property to Baguio Gold were in a natureof a loan as evidenced by the
compromiseagreement.
venture, which is akin to a particular partnership. The PA indicates that the parties
had intended to create a PAT and establish a common fund for the purpose. They
also had a joint interest in the profits of the business as shown by the 50-50 sharing
of income of the mine.
RULING:
Moreover, in an agency coupled with interest, it is the agency that cannot be revoked
or withdrawn by the principal due to an interest of a third party that depends upon it
or the mutual interest of both principal and agent. In this case the non-revocation or
non-withdrawal under the PA applies to the advances made by the petitioner who is
the agent and not the principal under the contract. Thus, it cannot be inferred from
the stipulation that it is an agency.
Facts:
The relationship of the parties may begleaned upon the power of attorney
document entered between the two.
Parsons and Edward Miller Grimm formed in 1952 a partnership in the import/export
and real estatebusiness. At the core of the controversy is a stock certificate of the
Manila Golf & Country Club, Inc.("MGCC" or the "Club", for short) covered by
Membership Certificate (MC) No. 1088 for 100 units,the playing rights over which
the Rizal Commercial Banking Corporation (RCBC), the court-appointed receiver,
had, in the meantime, leased out.
The Club issued MC No. 1088 to replace MCNo. 590. Asserting clashing ownership
claims over MC No.1088, albeit recorded in the name ofCharles Parsons ("Parsons",
hereinafter) are petitioner Estate of Edward Miller Grimm andrespondent G-P and
Company Parsons and Grimm each owned proprietary membership share inMGCC.
After Grimm's demise on November 27, 1977, Parsons and Simon continued with
thepartnership under the same name, GP and Company, The articles of the
partnership undergoanother amendment to admit Parsons' son, Patrick, in the
partnership.
2. The lower courts correctly held that the Power of Attorney (PA) is the
instrument material that is material in determining the true nature of the business
relationship between petitioner and Baguio. An examination of the said PA reveals
that a partnership or joint venture was indeed intended by the parties. While a
corporation like the petitioner cannot generally enter into a contract of partnership
unless authorized by law or its charter, it has been held that it may enter into a joint
3.
4.
That Patrick and Jose Parsons had, when reminded ofthe trust arrangement
between their late father and Grimm, denied the existence of a trust over
theClub share and refused to return the same Patrick Parsons averred that
his father was, with respectto MC No. 1088, a mere trustee of the true
owner thereof, G-P & Co., and alleged, by way of affirmative defense,
that the claim set forth in the complaint is unenforceable, barred inter alia
by thedead man's statute, prescription or had been waived or abandoned. the
trial court rendered decision