Chianpian Bastida v. Menzi and Co.

(1933) (fertilizer) Doctrine: Despite the agreement that Bastida was to receive 35% profit from the business of mixing and distributing fertilizer registered in the name of Menzi & Co., there was never any contract of partnership constituted between them based on the following key elements: (a) There was a never any common fund created between the parties, since the entire business as well as the expenses and disbursements for operating it were entirely for the account of Menzi & Co.; (b) there was no provision in the agreement for reimbursing Menzi & Co. in case there should be no profits at the end of the year; and (c) the fertilizer business was just one of the many lines of business of Menzi & Co.; and there was no separate books and no separate bank accounts kept for that particular line of business. The arrangement was deemed to be one of employment, with Bastida contributing his services to manage the particular line of business of Menzi &Co. Facts: Menzi, together with his wife and daughter, own Menzi & Co., Inc. The company through its president and general manager, J.M. Menzi, under the authority of the board of directors, entered into a contract with the Bastida to engage in the business of exploiting prepared fertilizers. Under the terms of the agreement, Bastida was to receive 35% of the profits. Pursuant to said contract, Menzi & Co., Inc., began to manufacture prepared fertilizers and through Menzi and Schlobohm, managing the business and opening an account entitled "FERTILIZERS" on the books of the defendant Menzi & Co., Inc., where all the accounts of the partnership business were supposed to be kept. Bastida supervised the manufacturing and mixing of the fertilizers and had no participation in the making of these entries, which were wholly in the Menzi's charge, under whose orders every entry was made. That prior to the termination of their agreement, Menzi & Co., Inc., duly notified the plaintiff that it would not under any conditions renew his said agreement or continue his said employment with it after its expiration, and after the termination of said agreement. Thereafter, Menzi & Co. liquidated the fertilizer business. During liquidation, Menzi employed White, Page and Co. to reaudit the books. The auditors found errors in the bookkeeping and determined that the balance due to Bastida is P21,633.20. Bastida, in turn, employed his own auditors to examine the books. Thompson assumed that Menzi and Bastida were partners and estimated the amount which was wholly different from those determine by Menzis auditors. Issues: W/N a partnership existed which would allow Bastida to demand P220,000 from Menzi. Ratio:

Chianpian NO. The Menzi & Co. had a fertilizer business before it entered into any agreement with Bastida. Bastida's agreement was for a fixed period, five years, and during that time the business was carried on in the name of Menzi & Co., Inc., and in Menzi & Co.'s warehouses and after the expiration of plaintiff's contract Menzi & Co., Inc., continued its fertilizer business, as it had a perfect right to do. There was really nothing to which any good-will could attach. Bastida maintains, however, that the trade-marks used in the fertilizer business during the time that he was connected with it acquired great value, and that they have been appropriated by the appellant to its own use. That seems to be the only basis of the alleged good-will, to which a fabulous valuation was given. As we have seen, the trade- marks were not new. They belonged to Menzi & Co., Inc., and were registered in its name; only the expense of registering the formulas in the Bureau of Science was charged to the business in which the plaintiff was interested. These trade-marks remained the exclusive property of Menzi & Co., and the plaintiff had no interest therein on the expiration of his contract.