TACAO VS. COURT OF APPEALS G.R. No. 127405 Ynares-Santiago, J.

Facts William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The three agreed to form a joint venture for the sale of cooking wares. Belo was to contribute P2.5 million; Tocao also contributed some cash and she shall also act as president and general manager; and Anay shall be in charge of marketing. Belo and Tocao specifically asked Anay because of her experience and connections as a marketer. They agreed further that Anay shall receive the following: 1. 10% share of annual net profits 2. 6% overriding commission for weekly sales 3. 30% of sales Anay will make herself 4. 2% share for her demo services They operated under the name Geminesse Enterprise, this name was however registered as a sole proprietorship with the Bureau of Domestic Trade under Tocao. The joint venture agreement was not reduced to writing because Anay trusted Belos assurances.The venture succeeded under Anays marketing prowess.But then the relationship between Anay and Tocao soured. One day, Tocao advised one of the branch managers that Anay was no longer a part of the company. Anay then demanded that the company be audited and her shares be given to her. Issue Whether or not there is a partnership Held Yes, even though it was not reduced to writing, for a partnership can be instituted in any form. The fact that it was registered as a sole proprietorship is of no moment for such registration was only for the companys trade name. Anay was not even an employee because when they ventured into the agreement, they explicitly agreed to profit sharing this is even though Anay was receiving commissions because this is only incidental to her efforts as a head marketer. The Supreme Court also noted that 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. An innocent partner thus possesses pecunia ry interest in every existing contract that was incomplete and in the trade name of the co-partnership and assets at the time he was wrongfully expelled.

HEIRS OF TAN ENG KEE VS. COURT OF APPEALS GR No. 126881 De Leon, Jr., J. Facts Benguet Lumber has been around even before World War II but during the war, its stocks were confiscated by the Japanese. After the war, the brothers Tan Eng Lay and Tan Eng Kee pooled their resources in order to revive the business. In 1981, Tan Eng Lay caused the conversion of Benguet Lumber into a corporation called Benguet Lumber and Hardware Company, with him and his family as the incorporators. In 1983, Tan Eng Kee died. Thereafter, the heirs of Tan Eng Kee demanded for an accounting and the liquidation of the partnership. They claim the existence of partnership from these set of circumstances: that Tan Eng Lay and Tan Eng Kee were commanding the employees; that both were supervising the employees; that both were the ones who determined the price at which the stocks were to be sold; and that both placed orders to the suppliers of the Benguet Lumber Company. They also point out that both of their families lived at the Benguet Lumber Company compound, a privilege not extended to its ordinary employees. Tan Eng Lay denied that there was a partnership between him and his brother. He said that Tan Eng Kee was merely an employee of Benguet Lumber. He showed evidence consisting of Tan Eng Kees payroll; his SSS as an employee and Benguet Lumber being the employer. Issue Whether or not Tan Eng Kee and Tan Eng Lay were partners in Benguet Lumber Held No. They were never partners. Tan Eng Kee, in his lifetime never executed any acts which would indicate that he was a partner. 1) He never demanded for periodic accountings of the common fund, which would be expected of a real partner; 2) He never received any share in the profits of Benguet Lumber, he only received salary as evidenced by the payroll documents presented by Tan Eng Lay; 3) The heirs were unable to prove that the brothers intended to divide the profits of the business between themselves. Even if Tan Eng Kee was granted certain privileges not given to regular employees, the Court found that these privileges were a result of being related to the owner of the company as brother and not because he was a partner. Further, even a mere supervisor in the company gives orders and directions to his subordinates; and any trusted employee over whom confidence is reposed by the owner, can order materials from the suppliers for and behalf of Benguet Lumber.

FERNANDO SANTOS, petitioner, vs. Spouses ARSENIO and NIEVES REYES, respondents. [G.R. No. 135813. October 25, 2001] PANGANIBAN, J.: FACTS: Sometime in June, 1986, [Petitioner] Fernando and [Respondent] Nieves were introduced to each other by one Zabat regarding a lending business venture proposed by Nieves. It was verbally agreed that [petitioner would] act as financier while [Nieves] and Zabat [would] take charge of solicitation of members and collection of loan payments. The venture was launched on June 13, 1986, with the understanding that [petitioner] would receive 70% of the profits while x x x Nieves and Zabat would earn 15% each. In July, 1986, x x x Nieves introduced Gragera to [petitioner]. Gragera, as chairman of the Monte Maria Development Corporation (Monte Maria), sought short-term loans for members of the corporation. [Petitioner] and Gragera executed an agreement providing funds for Monte Marias members. Under the agreement, Monte Maria, represented by Gragera, was entitled to P1.31 commission per thousand paid daily to [petitioner] Nieves kept the books as representative of [petitioner] while [Respondent] Arsenio, husband of Nieves, acted as credit investigator. [Petitioner] and [Nieves] later discovered that their partner Zabat engaged in the same lending business in competition with their partnership[.] he was thereby expelled from the partnership while the operations with Monte Maria continued. On June 5, 1987, [petitioner]charged [respondents], allegedly in their capacities as employees of [petitioner], with having misappropriated funds intended for Gragera. In their answer, [respondents] asserted that they were partners and not mere employees of [petitioner]. The complaint, they alleged, was filed to preempt and prevent them from claiming their rightful share to the profits of the partnership. Nieves claimed that she participated in the business as a partner, as the lending activity with Monte Maria originated from her initiative. [Petitioner] on the other hand insisted that [respondents] were his mere employees and not partners with respect to the agreement with Gragera. He claimed that after he discovered Zabats activities, he ceased infusing funds, thereby causing the extinguishment of the partnership. The agreement with Gragera was a distinct partnership [from] that of [respondent] and Zabat. [Petitioner] asserted that [respondents] were hired as salaried employees with respect to the partnership between [petitioner] and Gragera. He further asserted that in Nieves capacity as bookkeeper, she received all payments from which Nieves deducted Grageras commission. The rial court held that respondents were partners, not mere employees, of petitioner. and upon appeal the CA upheld the decision of the CA ISSUE: Whether or not there was a partnership? Held: YES. 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. The Articles of Agreement stipulated that the signatories shall share the profits of the business in a 70 -15-15 manner, with petitioner getting the lions share. This stipulation clearly proved the establishment of a partnership. [Respondents] were industrial partners of [petitioner]. x x x Nieves herself provided the initiative in the lending activities with Monte Maria. In consonance with the agreement between appellant, Nieves and Zabat (later replaced by Arsenio), [respondents] contributed industry to the common fund with the intention of sharing in the profits of the partnership. [Respondents] provided services without which the partnership would not have [had] the wherewithal to carry on the purpose for which it was organized and as such [were] considered industrial partners (Evangelista v. Abad Santos, 51 SCRA 416 [1973])