Partnershjip Digested Cases pool

8/13/2019 Partnershjip Digested Cases pool

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1 Digested Cases onPartnership

Bastida vs Menzi58 Phil 188GR No. L-358 !" Mar#h 31" 1$33

%a#ts& This is an appeal by Menzi & Co., Inc., one of the defendants, from a decision of theCourt of First Instance of Manila. Bastida offered to assign to Menzi & Co. hiscontract ith !hil "ugar Centrals #gency and to super$ise the mi%ing of thefertilizer and to obtain other orders for ' ( of the net profit that Menzi & Co., Inc.,might deri$e therefrom. ). M. Menzi *gen. manager of Menzi & Co.+ accepted theoffer. The agreement bet een the parties as $erbal and as confirmed by theletter of Menzi to the plaintiff.

!ursuant to the $erbal agreement, the defendant corporation on #pril -, 1entered into a ritten contract ith the plaintiff, mar/ed 0%hibit #, hich is the

basis of the present action. "till, the fertilizer business as carried on in the samemanner as it as prior to the ritten contract, but the net profit that the plaintiffherein shall get ould only be (.

!rior to the e%piration of the contract *#pril -, 1 -+, the manager of Menzinotified the plaintiff that the contract for his ser$ices ould not be rene ed."ubse2uently, hen the contract e%pired, Menzi proceeded to li2uidate thefertilizer business in 2uestion. The plaintiff refused to agree to this. It argued,among others, that the ritten contract entered into by the parties is a contract ofgeneral regular commercial partnership, herein Menzi as the capitalist and theplaintiff the industrial partner.

Issue3 Is the relationship bet een the petitioner and Menzi that of partners45eld3

The relationship established bet een the parties as not that of partners, but thatof employer and employee, hereby the plaintiff as to recei$e ( of the netprofits of the fertilizer business of Menzi in compensation for his ser$ices forsuper$ising the mi%ing of the fertilizers. 6either the pro$isions of the contract northe conduct of the parties prior or subse2uent to its e%ecution 7ustified the findingthat it as a contract of co8partnership

#ccording to #rt. 119 of the Code of Commerce, articles of association by hicht o or more persons obligate themsel$es to place in a common fund any property,industry, or any of these things, in order to obtain profit, shall be commercial, nomatter hat it class may be, pro$ided it has been established in accordance iththe pro$isions of the Code. 5o e$er in this case, there as no common fund. Thebusiness belonged to Menzi & Co. The plaintiff as or/ing for Menzi, and insteadof recei$ing a fi%ed salary, he as to recei$e ( of the net profits ascompensation for his ser$ices. The phrase in the ritten contract :en sociedadcon;, hich is used as a basis of the plaintiff to pro$e partnership in this case,merely means :en reunion con; or in association ith.

It is also important to note that although Menzi agreed to furnish the necessaryfinancial aid for the fertilizer business, it did not obligate itself to contribute any

fi%ed sum as capital or to defray at its o n e%pense the cost of securing thenecessary credit.

Pas#'al vs. C(R


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Digested Cases onPartnership

1?ct. 1>, 1 >>

%a#ts& ?n )une , 1 9 , petitioners bought t o * +parcels of land from "antiago

Bernardino, et al.and on May >, 1 99, they bought another three * + parcels ofland from )uan =o2ue. The first t o parcels of land ere sold by petitioners in 1 9>to Marenir @e$elopment Corporation, hile the three parcels of land ere sold bypetitioners to 0rlinda =eyes and Maria "amson on March 1 ,1 -'. !etitionerrealized a net profit in the sale made in 1 9> in the amount of !19 , A.-', hilethey realized a net profit of !9',''' in the sale made in 1 -'. The correspondingcapital gains ta%es ere paid by petitioners in 1 - and 1 -A .=espondentCommissioner informed petitioners that in the years 1 9> and 1 -', petitioners asco8o ners in the real estate transactions formed an unregistered partnership or

7oint $enture ta%able as a corporation under "ection '*b+and its income assub7ect to the ta%es in the 6ational Internal =e$enue Code that the unregistered

partnership as sub7ect to corporate income ta% as distinguished from profitsderi$ed from the partnership by them hich is sub7ect to indi$idual income ta%.

Issue hether petitioners formed an unregistered partnership sub7ect to corporateincome ta%*partnership $s. co8o nership

5eld3 #rticle 1-9 of the ne Ci$il Code lays do n the rule for determining hen atransaction should be deemed a partnership or a co8o nership. "aid articleparagraphs and , pro$ides3* + Co8o nership or co8possession does notitself establish a partnership, hether such co8o ners or co8possessors do or donot share any profits The sharing of returns foes not in itself establish apartnership hether or not the persons sharing therein ha$e a 7oint or commonright or interest in the property. There must be a clear intent to form partnership,the e%istence of a 7uridical personality different from the indi$idual partners, andthe freedom of each party to transfer or assign the hole property. In the presentcase, there is clear e$idence of co8o nership bet een the petitioners. There is noade2uate basis to support the proposition that they thereby formed anunregistered partnership. The t o isolated transactions hereby they purchasedproperties and sold the same a fe years thereafter did not there by ma/e thempartners. They shared in the gross profits as co8 o ners and paid their capitalgains ta%es on their net profits and a$ailed of the ta% amnesty thereby. Dnder thecircumstances, they cannot be considered to ha$e formed an unregisteredpartnership hich is thereby liable for corporate income ta%, as the respondentcommissioner proposes.

Gregorio )rtega" *o+as del Castillo" ,r. and Ben a+in Ba#orro v. C " /0Cand ,oa 'in Misa


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?rtega, then a senior partner in the la firm Bito, Misa, and Eozada ithdre insaid firm. 5e filed ith "0C a petition for dissolution and li2uidation of partnership."0C en banc ruled that ithdra al of Misa from the firm had dissol$ed thepartnership. Because since it is partnership at ill, the la firm could be dissol$ed

by any partner at anytime, such as by ithdra al there from, regardless of goodfaith or bad faith, since no partner can be forced to continue in the partnershipagainst his ill.

(ss'e&1. ?6 the partnership of Bito, Misa & Eozada *no Bito, Eozada, ?rtega &Castillo+is a partnership at ill

. ?6 the ithdra al of Misa dissol$ed the partnership regardless of his good orbad faith

2eld&

1. es. The partnership agreement of the firm pro$ides that ;GtHhe partnership shallcontinue so long as mutually satisfactory and upon the death or legal incapacity ofone of the partners, shall be continued by the sur$i$ing partners.;

. es. #ny one of the partners may, at his sole pleasure, dictate a dissolution ofthe partnership at ill *e.g. by ay of ithdra al of a partner+. 5e must, ho e$er,act in good faith, not that the attendance of bad faith can pre$ent the dissolutionof the partnership but that it can result in a liability for damages.

Car+en Li anag v. C and People 481 /CR 445 ?ctober A, 1 -

%a#ts&Ei anag as/ed Isidora =osales to 7oin her and Thelma Tagbilaran in the businessof buying and selling cigarettes. Dnder their agreement, =osales ould gi$e themoney neededtobuy the cigarettes hile Ei anag and Tabligan ould act as her agents, ith acorresponding A'( commission to her if the goods are sold other ise the money


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A Digested Cases onPartnership

ould be returned to =osales. =osales ga$e se$eral cash ad$ances amounting to9 ,9 '. Money as misappropriated. =osales files a complaint of estafa againstthem. #fter trial on the merits, the trial court rendered a decision finding E guilty ascharged. ?n appeal to the Court of #ppeals, said decision as affirmed. E then filed

her appeal before the Court alleging that the appellate court erred in affirming hercon$iction for the crime of estafa, hen clearly the contract that e%isted bet eenthem as either that of a simple loan or that of a partnership or 7oint $enture,hence purely ci$il in nature and not criminal.(ss'e&1. ?6 the parties entered into a partnership agreement . if in the negati$e,

?6 the transaction is a simple loan4

2eld&1. 6o. 0$en assuming that a contract of partnership as indeed entered into byand bet een the parties, hen money or property ha$e been recei$ed by a

partner for a specific purpose for the purchase of cigarette and she latermisappropriated it, such partner is guilty of estafa. . 6o. In a contract of loan oncethe money is recei$ed by the debtor, o nership o$er the same is transferred.Being the o ner, the borro er can dispose of it for hate$er purpose he maydeem proper

#guila )r. $s C#G.R. No. 14 3 Nove+6er 45" 1$$$" 317 /CR 4 7

In #pril 1 1, the spouses =uben and Felicidad #brogar entered into a loanagreement ith a lending firm called #.C. #guila & "ons, Co., a partnership. Tosecure the loan, the spouses mortgaged their house and lot located in asubdi$ision. The terms of the loan further stipulates that in case of non8payment,the property shall be automatically appropriated to the partnership and a deed ofsale be readily e%ecuted in fa$or of the partnership. "he does ha$e a ' dayredemption period.

=uben died, and Felicidad failed to ma/e payment. "he refused to turn o$er theproperty and so the firm filed an e7ectment case against her * herein she lost+."he also failed to redeem the property ithin the period stipulated. "he then fileda ci$il case against #lfredo #guila, manager of the firm, see/ing for the declarationof nullity of the deed of sale. The =TC retained the $alidity of the deed of sale. TheCourt of #ppeals re$ersed the =TC. The C# ruled that the sale is $oid for it isa pactum commissorium sale hich is prohibited under #rt. '>> of the Ci$ilCode .

(// 0& hether or not the case filed by Felicidad shall prosper.

20LD& 6o. Dnfortunately, the ci$il case as filed not against the real party ininterest. #s pointed out by #guila, he is not the real party in interest but rather it

as the partnership #.C. #guila & "ons, Co. The =ules of Court pro$ide that :e$eryaction must be prosecuted and defended in the name of the real party in interest.;# real party in interest is one ho ould be benefited or in7ured by the 7udgment,or ho is entitled to the a$ails of the suit. #ny decision rendered against a person

ho is not a real party in interest in the case cannot be e%ecuted. 5ence, acomplaint filed against such a person should be dismissed for failure to state acause of action, as in the case at bar.Dnder #rt. 1-9> of the Ci$il Code, a partnership :has a 7uridical personalityseparate and distinct from that of each of the partners.; The partners cannot beheld liable for the obligations of the partnership unless it is sho n that the legalfiction of a different 7uridical personality is being used for fraudulent, unfair, orillegal purposes. In this case, Felicidad has not sho n that #.C. #guila & "ons, Co.,as a separate 7uridical entity, is being used for fraudulent, unfair, or illegalpurposes. Moreo$er, the title to the sub7ect property is in the name of #.C. #guila &


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"ons, Co. It is the partnership, not its officers or agents, hich should beimpleaded in any litigation in$ol$ing property registered in its name. # $iolation ofthis rule ill result in the dismissal of the complaint.

/ vs Clarin 1 Phil 8 " 1$1!

%a#ts& !edro Clarin had an agreement to form a partnership and the di$ide theprofits e2ually to !edro Tarug, 0usebia Clarin, and Carlos @e


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9 Digested Cases onPartnership

hich included buy, sell, alienate and con$ey properties of the partnership as ellas obtain loans as he maydeem ad$isable for the best interest of the co Jpartnership. ith the authority of the

another A9 parcels of land hich hich ere purchased by Tan "in #n in hisindi$idual capacity,and assumed mortgaged debt thereon. The do n payment forthe A9 parcels of land as ad$anced by uti$o and Co. The t o separateobligations ere consolidated in an instrument e%ecuted by the partnership and

Tan "in #n, hereby the entire A lots ere mortgaged in fa$orof the Banco5ipotecario de Filipinas *as successor toEa Drbana+. hen Tan "in #n died, his ifeKongChia !in as appointed administrati% of the intestate estate of her deceasedhusband. =epeated demands for payment ere made by Banco 5ipotecario onthepartnership and on Tan "in #n hich as initially paid by uti$o and Co. and"ing ee Cuan and Co. The matter no pending is the appellantLs motion forreconsideration of our main decision, herein e ha$e upheld the $alidity of the sale of

the lands o ned by the partnership

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Partnershjip Digested Cases pool