Heirs of Jose Lim v.

Lim
G.R. No. 172690
March 3, 2010

Petitioners: Heirs of Jose Lim represented by Elenito Lim

Respondent: Juliet Villa Lim
Ponente: Nachura, J.

FACTS
1. Petitioners are heirs of late Jose Lim (Jose), represented by Elenito
a. Jose’s widow Cresencia Palad (Cresencia)
b. children Elenito, Evelia, Imelda, Edelyna and Edison, all surnamed Lim
2. Filed Complaint for Partition, Accounting and Damages against respondent Juliet Villa
Lim (respondent), widow of the late Elfledo Lim (Elfledo), who was the eldest son of Jose
and Cresencia

Petitioners’ version of events:

1. Jose was liaison officer of Interwood Sawmill
2. Jose together with his friends Jimmy Yu (Jimmy) Norberto Uy (Norberto) formed a
partnership to engage in trucking business
a. Initially with a contribution of Php50k each, they purchased a truck in hauling and
transport of lumber
3. Jose managed operations of trucking business until death
4. Thereafter, Jose’s heirs, including Elfledo, and partners agreed to continue business
under mgmt. of Elfledo
5. The shares in the partnership profits and income that formed part of the estate of
Jose were held in trust by Elfledo, with petitioners’ authority for Elfledo to use,
purchase or acquire properties using said funds
6. Elfledo was a fresh commerce grad, serving as father’s driver in business and he was
never a partner or an investor in the business and merely supervised purchase of
additional trucks using income from trucking business
7. By time partnership ceased, it had 9 trucks all registered in Elfledo’s name
8. Also through Elfledo’s mgmt. that he was able to purchase numerous real properties, by
using profits of partnership and 5 other trucks
9. Elfledo died leaving respondent as sole surviving heir
10. Petitioners claimed that respondent took over administration of properties which
belonged to the estate without their consent and approval
11. Claiming that they are co-owners of the properties, they required respondent to submit
an accounting of all income, profits and rentals received from the estate and to surrender
administration. Respondent refused

Respondent’s version of events:

1. Elfledo was himself a partner of Norberto and Jimmy
2. Through Elfledo, business flourished
a. When Elfledo and respondent got married in 1981, partnership only had 1 truck
3. Respondent and Elfledo engaged in other business ventures thus were ably to buy real
properties and put own car assembly and repair business
4. When Norberto was ambushed and killed, business started to falter
5. When Elfledo died, respondent talked to Jimmy and heirs of Norberto as she couldn’t run
the business anymore
a. 3/9 trucks given to Jimmy as share
 b. 3/9 trucks to heirs of Norberto but Norberto’s wife was not interested in vehicles
thus sold to respondent who paid for them in installments
6. When Jose died, he left no known assets and partnership ceased upon demise
7. Respondent also stresses Jose left no properties that Elfledo could’ve held in trust
8. All properties obtained through hard work and conjugal property thus right to refuse to
render an accounting

Procedural
1. RTC: In favor of petitioners
2. CA: REVERSED, dismissed petitioners’ complaint

ISSUE: W/N Elfledo was a partner. YES

1. A partnership exists when two or more persons agree to place their money, effects,
labor, and skill in lawful commerce or business, with the understanding that there shall
be a proportionate sharing of the profits and losses among them
2. A contract of partnership is defined by the Civil Code 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
3. Undoubtedly, the best evidence would have been the contract of partnership or
the articles of partnership
a. Unfortunately, there is none in this case, because the alleged partnership
was never formally organized
4. Not enough evidence to shows that Jose was the partner and not Elfledo and all
properties acquired by Elfledo and respondent form part of estate of Jose
5. The testimony of Jimmy, the sole surviving partner, can’t be relied on since it is just one
piece of evidence against respondent
6. In civil cases, the party having the burden of proof must establish his case by a
preponderance of evidence. “Preponderance of evidence” is the weight, credit, and
value of the aggregate evidence on either side and is usually considered synonymous
with the term “greater weight of the evidence” or “greater weight of the credible
evidence.
a. It is evidence that is more convincing to the court as worthy of belief than that
which is offered in opposition thereto.
7. Art. 1769. In determining whether a partnership exists, these rules shall apply:
(1) Except as provided by Article 1825, persons who are not partners as to each other are
not partners as to third persons;
(2) Co-ownership or co-possession does not of itself establish a partnership, whether such
co-owners or co-possessors do or do not share any profits made by the use of the property;
(3) The sharing of gross returns does not of itself establish a partnership, whether or not the
persons sharing them have a joint or common right or interest in any property from which the
returns are derived;
(4) The receipt by a person of a share of the profits of a business is a prima facie evidence
that he is a partner in the business, but no such inference shall be drawn if such profits were
received in payment:
(a) As a debt by installments or otherwise;
(b) As wages of an employee or rent to a landlord;
(c) As an annuity to a widow or representative of a deceased partner;
(d) As interest on a loan, though the amount of payment vary with the profits of the
business;
 (e) As the consideration for the sale of a goodwill of a business or other property by
installments or otherwise.
8. Applying the provision, ff. circumstances tend to prove that Elfledo was himself the
partner of Jimmy and Norberto
a. Cresencia testified that Jose gave Elfledo P50,000.00, as share in the
partnership, on a date that coincided with the payment of the initial capital in the
partnership
b. Elfledo ran the affairs of the partnership, wielding absolute control, power and
authority, without any intervention or opposition whatsoever from any of
petitioners herein
c. all of the properties, particularly the nine trucks of the partnership, were
registered in the name of Elfledo
d. Jimmy testified that Elfledo did not receive wages or salaries from the
partnership, indicating that what he actually received were shares of the profits of
the business
e. none of the petitioners, as heirs of Jose, the alleged partner, demanded periodic
accounting from Elfledo during his lifetime
9. Heirs of Tan Eng Kee: demand for periodic accounting is evidence of partnership
10. Petitioners also failed to adduce evidence to show real and personal properties acquired
and registered in names of Elfledo and respondent formed part of estate of Jose
a. Failed to refute claim that Elfledo had other businesses

Petition DENIED.