Tocao vs. CA and Nenita Anay 365 SCRA 463 G.R 127405 October 4, 2000

Facts: Respondent met the petitioner through Belo.Petitioner Tacao conveyed her desire to enter into a joint venture with her and Anay

Anay is to be the marketing head of local distribution of kitchen wares, the former to finance the business. Anay was made to receive commissions based on her performance, as verbally agreed upon by her and Belo, the latter acting as the guarantor of Geminesse enterprise.

In 1887, Belo signed a memorandum granting 37% commission to Anay for her business transaction. Two days after, Anay discovered that she was in effect no longer the head of marketing and had been barred from holding office.

Issue: Whether or not Anay was an employee or partner of Tocao and thus entitled to damages.

Ruling: The RTC and CA found the partnership between petitioners and private respondent exists based on the facts presented. This amount be determined by S.C

To be considered as a judicial personality, a partnership must fulfill these requisites: 1) two or more persons bind themselves to contribute money, property or industry to a common fund; (2) intention on the part of the partners to divide profits among themes selves.

Where no immovable le property in involved, an oral agreement will suffice to create partnership. Thus, a subject he 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.

· In 2001, SC issued a resolution, modifying its decision regarding as a partner to firm because he merely acted as a guarantor. As for the award of damages to Anay, the decision was sustained.

ROJAS VS. MAGLANA

SUMMARY:Maglana and Rojas executed their articles of co-partnershipcalled EDE. It had an indefinite term, was registered with the SEC, and had aTimer License. Later, Agustin Pahamitang became an industrial partner andanother articles of co-partnership was executed. The term of the second co-partnership was fixed to 30 years. After some time, the three executed aconditional sale of interest in the partnership where Magalana and Rojas shallpurchase the interest, share, and participation of Pahamotang. It was agreedthat, after payment of such including the loan secured by Pahamotang, thetwo shall become owners of all equipment contributed by Pahamotang. Thetwo continued the partnership without any written agreement orreconstitution of the articles of partnership. Subsequently, Rojas entered intoa contarct with CMS Estate. Maglana reminded him of his contribution to thecapital investments and his duties to the partnership. Rojas said he would not be able to comply. Maglana told Rojas that the latter is only entitled to 20% of the profits, which was the sharing from 1957-1959 without dispute. Rojastook funds from the partnership which was more than his share. Maglananotified Rojas that he had dissolved the partnership. Rojas filed an actionagainst Magallana. The CFI ruled that the partnership of the two afterPahamotang left was one de facto and at will. The SC said that it was not,considering that the first partnership was never dissolved. With regard to theissue of unilateral dissolution, the SC held that Maglana had the power to doso.DOCTRINE:Under Article 1830, par. 2 of the Civil Code, even if there is aspecified term, one partner can cause its dissolution by expresslywithdrawing even before the expiration of the period, with or without justifiable cause. Of course, if the cause is not

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justified or no cause was given,the withdrawing partner is liable for damages but in no case can he becompelled to remain in the firm. With his withdrawal, the number of members is decreased, hence, the dissolution. And in whatever way he mayview the situation, the conclusion is inevitable that Rojas and Maglana shallbe guided in the liquidation of the partnership by the provisions of its dulyregistered Articles of Co-Partnership; that is, all profits and losses of thepartnership shall be divided "share and share alike" between the partners

ROJAS VS. MAGLANA

FACTS: Maglana and Rojas executed their Articles of Co-partnership called “Eastcoast Development Enterprises”(EDE) which had an indefinite term of existence and was registered with the SEC and had a Timber License.

One of the EDE’s purposes was to apply or secure timber and/or private forest lands and to operate, develop and promote such forests rights and concessions.

M shall manage the business affairs while R shall be the logging superintendent.

All profits and losses shall be divided share and share alike between them.

Later on, the two availed the services of Pahamotangas industrial partner and executed another articles of co-partnership with the latter.

The purpose of this second partnership was to hold and secure renewal of timber license and the term of which was fixed to30 years.

Still later on, the three executed a conditional sale of interest in the partnership wherein M and R shall purchase the interest, share and participation in the partnership of P.

It was also agreed that after payment of such including amount of loan secured by P in favor of the partnership, the two shall become owners of all equipment contributed by P.

After this, the two continued the partnership without any written agreement or reconstitution of their articles of partnership.

Subsequently, R entered into a management contract with CMS Estate Inc.

M wrote him re: his contribution to the capital investments as well as his duties as logging superintendent.

R replied that he will not be able to comply with both. M then told R that the latter’s share will just be 20% of the net

profits. Such was the sharing from 1957 to 1959without complaint or dispute.

R took funds from the partnership more than his contribution. M notified R that he dissolved the partnership. R filed an action against M for the recovery of properties and accounting of the partnership and damages.

CFI: the partnership of M and R is after P retired is one of de facto and at will; the sharing of profits and losses is on the basis of actual contributions; there is no evidence these properties were acquired by the partnership funds thus it should not belong to it; neither is entitled to damages; the letter of M in effect dissolved the partnership; sale of forest concession is valid and binding and should be considered as M’s contribution; R must pay or turnover to the partnership the profits he received from CMS and pay his personal account to the partnership;M must be paid 85k which he should’ve received but was not paid to him and must be considered as his contribution.

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ISSUE: what is the nature of the partnership and legal relationship of M-R after P retired from the second partnership? May M unilaterally dissolve the partnership?

SC: There was no intention to dissolve the first partnership upon the constitution of the second as everything else was the same except for the fact that they took in an industrial partner: they pursued the same purposes, the capital contributions call for the same amounts, all subsequent renewals of Timber License were secured in favor of the first partnership, all businesses were carried out under the registered articles.

M and R agreed to purchase the interest, share and participation of P and after, they became owners of the equipment contributed by P. Both considered themselves as partners as per their letters.

It is not a partnership de facto or at will as it was existing and duly registered. The letter of M dissolving the partnership is in effect a notice of withdrawal and may be done by expressly withdrawing even before expiration of the period with or without justifiable cause.

As to the liquidation of the partnership it shall be divided “share and share alike” after an accounting has been made. R is not entitled to any profits as he failed to give the amount he had undertaken to contribute thus, had become a debtor of the partnership.

M cannot be liable for damages as R abandoned the partnership thru his acts and also took funds in an amount more than his contribution.

Primelink v Lopez (G.R. No. 167379 June 27, 2006)

FACTS: Primelink Properties and Development Corporation is a domestic corporation engaged in real estate development.

Rafaelito W. Lopez is its President and Chief Executive Officer.Ma. Clara T. Lazatin-Magat and her brothers, are co-owners of two (2) adjoining parcels of land located in Tagaytay City.

On March 10, 1994, the Lazatins and Primelink, represented by Lopez, in hiscapacity as President, entered into a Joint Venture for the development of the aforementioned property into a residential subdivision to be known as "Tagaytay Garden Villas."

Under the JVA, the Lazatin siblings obliged themselves to contribute the two parcels of land as their share in the joint venture. For its part, Primelink undertook to contribute money, labor, personnel,machineries, equipment, contractor’s pool, marketing activities, managerialexpertise and other needed resources to develop the property and construct therein the units for sale to the public.

In a Letter dated April 10, 1997, 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 reviewits business records/papers.

In another Letter14 dated October 22, 1997, theLazatins 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.

Trial court rendered a decision rescinding the Joint Venture Agreement executed between the plaintiffs and the defendants; immediately restoring to the plaintiffs possession

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of the subject parcels of land; ordering the defendants to render an accounting of all income generated as well as expenses incurred and disbursement made in connection with the project. CA affirmed trial court’s decision ruling that,under Philippine law, a joint venture is a form of partnership and is to be governedby the laws of partnership.

ISSUE: WON trial court erred in rescinding the JVA between the parties

HELD:SC affirmed appellate court’s decision. Ratio Decidendi: As a general rule, the relation of the parties in

joint ventures isgoverned by their agreement. When the agreement is silent on any particular ISSUE, the general

principles of partnership may be resorted to. The legal concept of a joint venture is of common law origin. It has no precise legal definition, but it has been generally understood to mean an organization formed for some temporarypurpose.

It 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 cited by most opinions in common law jurisdictions 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 maybe particular or universal, and a particular partnership may have for its object as pecific undertaking. 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.

When the RTC rescinded the JVA on complaint of respondents based on the evidence on record that petitioners willfully and persistently committed a breachof the JVA, the court thereby dissolved/cancelled the partnership.

With therescission 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 thewinding up of partnership affairs is completed.56 Winding up means theadministration of the assets of the partnership for the purpose of terminating the business and discharging the obligations of the partnership

Benjamin Yu v. National Labor Relations Commission & Jade Mountain ProductsCo. Ltd., Willy Co, Rhodora Bendal, Lea Bendal, Chiu Shian Jeng and Chen Ho-Fu

Facts: Yu – ex-Assistant General Manager of the marble quarrying and export business operatedby a registered partnership called Jade Mountain Products Co. Ltd.

partnership was originally organized with Bendals as general partners and Chin Shian Jeng,Chen Ho-Fu and Yu Chang as limited partners; partnership business consisted of exploiting a marble deposit in Bulacan

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Yu, as Assistant General Manager, had a monthly salary of 4000. Yu, however, actually received only half of his stipulated salary, since he had accepted the promise of the partners that the balance would be paid when the firm shall have secured additional operating funds from abroad. Yu actually managed the operations and finances of thebusiness; he had overall supervision of the workers at the marble quarry in Bulacan andtook charge of the preparation of papers relating to the exportation of the firm’s products.

general partners Bendals sold and transferred their interests in the partnership to Co andEmmanuel Zapanta

partnership was constituted solely by Co and Zapanta; it continued to use the old firmname of Jade Mountain

Yu – dismissed by the new partners Issues:1. WON thepartnership which had hired Yu as Asst. Gen. Man

ager had been extinguished and replaced by a new partnership composed of Co and Zapanta;

2. if indeed a new partnership had come into existence, WON Yu could nonetheless assert his rights under his employment contract with the old partnership as against the new partnership

Held: 1. Yes. Changes in the membership of the partnership resulted in the dissolution of the old partnership which had hired Yu and the emergence of a new partnership composedof Co and Zapanta.

Legalbases:Art. 1828. The dissolution of a partnership is the change in the relation of thepartners caused by any partner ceasing to be associated in the carrying on asdistinguished from the winding up of the business.

Art. 1830. Dissolution is caused:(1) without violation of the agreement between the partners;(b) by the express will of

any partner, who must act in good faith, when no definite termor particular undertaking is specified;(2) in contravention of the agreement between the partners, where the circumstances donot permit a dissolution under any other provision of this article, by the express will of anypartner at any time;

No winding up of affairs in this case as contemplated in Art. 1829: on dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed

the new partnership simply took over the business enterprise owned by the oldpartnership, and continued using the old name of Jade Mountain Products CompanyLimited, without winding up the business affairs of the old partnership, paying off its debts, liquidating and distributing its net assets, and then re-assembling the said assets or most of them and opening a new business enterprise

2. Yes. the new partnership is liable for the debts of the old partnership

Legal basis: Art. 1840 (see codal) Yu is entitled to enforce his claim for unpaid salaries, as well as

other claims relating to his employment with the previous partnership, against the new partnership

But Yu is not entitled to reinstatement. Reason: new partnership was entitled to appointand hire a new gen. or asst. gen. manager to run the affairs of the business enterprisetake over. An asst. gen. manager belongs to the most senior ranks of management and anew partnership is entitled to appoint a top manager of its own choice and confidence. The non-retention of Yu did not constitute unlawful termination.

The new partnership had its own new General Manager, Co, the principal new owner himself. Yu’s old position thus became superfluous or redundant.

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Yu is entitled to separation pay at the rate of one month’s pay for each year of service thathe had rendered to the old partnership, a fraction of at least 6 months being considered asa whole year.

DOMINGO BEARNEZA, plaintiff-appelle,vs. BALBINO DEQUILLA,defendant-appellant

Facts: In the year 1903, Balbino Dequilla, the herein defendant, and Perpetua Bearneza formed a partnership for the purpose of exploiting a fish pond

Perpetua obligating herself to contribute to the payment of the expenses of the business, which obligation she made good

both agreeing to divide the profits between themselves, which they had been doing until the death of the said Perpetua in the year 1912

The deceased left a will in one of the clauses of which she appointed Domingo Bearnez, the herein plaintiff, as her heir to succeed to all her rights and interests in the fish pond in question-

Domingo Bearnez then instituted an action to recover a part of the fish pond belonging to the decedent, including ½ of the profits received by the defendant from the years 1913-1919

The defendant alleges that "the formation of the supposed partnership between the plaintiff and the defendant for the exploitation of the aforesaid fish pond was not carried into effect, on account of the plaintiff having refused to defray the expenses of reconstruction and exploitation of said fishpond." and further averred that the right of the plaintiff had already prescribed

Judgment was then rendered declaring the plaintiff owner of one-half of the fish pond but withoutmay awarding him any damages

From this judgment the defendant appealsIssue/Held: ISSUE:W/N the plaintiff has any right to maintain an action

for recovery of the said one-half of the fishpond / NONE Ratio: The partnership formed was a particular partnership, it

having had for its subject-matter a specified thing, the exploitation of the aforementioned fish pond

Although, as the trial court says in its decision, the defendant, in his letters to Perpetua or herhusband, makes reference to the fish pond, calling it "our," or "your fish pond," this reference cannot be held to include the land on which the said fish pond was built-It has not been proven that Bearneza participated in the ownership of the said land

Therefore, the land on which the fish pond was constructed did not constitute part of the subject-matter of the partnership

This partnership was dissolved by the death of Perpetua Bearneza Neither can it be maintained that the partnership continued to exist

after the death of Perpetua, inasmuch as it does not appear that any stipulation to that effect has ever been made by her and the defendant(NO STIPULATION!)

The partnership having been dissolved by the death of Perpetua Bearneza, its subsequent legal status was that of a partnership in liquidation, and the only rights inherited by her testamentary heir, the herein plaintiff, were those resulting from the said liquidation in favor of the deceased partner, and nothing more

Before this liquidation is made, which up to the present has not been effected, it is impossible to determine what rights or interests, if any, the deceased had, the partnership bond having beendissolved

There is no sufficient ground for holding that a community of property existed between the plaintiff and the defendant, it not being known whether the deceased still had any interest in the partnership property which could have been transmitted by will to the plaintiff

Furthermore, it cannot be said that the partnership continued between the plaintiff and thedefendant.

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It is true that the latter's act in requiring the heirs of Perpetua to contribute to the payment of the expenses of exploitation of the aforesaid fishing industry was an attempt to continue the partnership, but it is also true that neither the said heirs collectively, nor the plaintiff individually, took any action in response to that requirement, nor made any promise to that effect, and therefore no new contract of partnership existed-The decision is hereby REVERSED.

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