Pat 2c Enriquez

ENRIQUEZ, Darla Claire T.
II-C
Partnership, Agency and Trust Atty. Batungbakal
Partnership, Agency, and Trust

Table of Contents
Partnership
Fernando Santos v. Sps. Arsenio and Nieves Reyes (establishment of partnership) GR No. 135813.
October , ..............
Sevilla v. Court of Appeals (principal-agent relationship v. partnership) GR No.L-41182-3. April 16,
.
EligioEstanislao, Jr v. Court of Appeals, Remedios Estanislao, Emilio and Leocadio Santiago
(partnership agreement) GR No.L-49982. April 27, ...
Dan Fue Leung v. Hon. Intermediate Appellate Court and Leung Yiu(share of profits and losses) GR
No. 709 . January , ..
Fernando Santos v. Sps. Arsenio and Nieves Reyes an industrialist partners share in net profits
GR No. . October , ..
Sunga-Chan v. Chua (juridical personality of a partnership) GR No. . August , ....
Palting v. San Jose Petroleum Incorporated (foreign corporation; reciprocal rights between a
foreign country and the Philippines) GR No.L-14441. December , ...
Francisco Bastida v. Menzi& Co., Inc (employment and not partnership) GR No.L-35840. March 31,
Phil .
Magalona v. Pesayco (oral partnership) GR No.L-39607. February , ..
Agad v. Mabato (partnership contract in a public instrument; lack of inventory) GR No.L-24193.
June , ....
The Great Council of the United States of the Improved Order of Red Men v. Veteran Army of the
Philippines (Veteran Army not a partnership) GR No. 3186. March , Phil ..
Leopoldo Criado v. Gutierrez Hermanos (independent, private act of a partner not that of a
partnership) GR No.L-12371. March 23, 1918 (37 Phil 88 .........
Jose Garrido v. Agustin Asencio (partners books of account) GR No.L-4281. March 30, 1908 (10 Phil
.
Sharruf& Co v. Baloise Fire Insurance (change of name of the partnership) GR No. 44119. March 30,
Phil .
Island Sales, Inc v. United Pioneers General Construction Company, et al (pro-rata liability) GR No.L-
. July , .....
De la Rosa v. Ortega Go-Cotay GR No.L-24243. January 15, Phil
Antonio Goquiolay and the Partnership Tan Sin An v. Washington Sycip, et al GR No.L-11840. July
, ....
Agency
Angeles vs. PNR...
URBAN BANK, INC, Petitioner, vs. MAGDALENO M. PEA, Respondent. G.R. No. 145817, October 19,
....
Corazon Nevada vs. Atty. Rodolfo Casuga...
Page 1 of 37
ENRIQUEZ, Darla Claire T. II-C
PARTNERSHIP
GENERAL PROVISIONS
1. Fernando Santos v. Sps. Arsenio and Nieves Reyes (establishment of partnership)

GR No. 135813. October 25, 2001
Facts:
Before us is a Petition for Review on Certiorari assailing the November 28, 1997
Decision, as well as the August 17, 1998 and the October 9, 1998 Resolutions, issued by the
Court of Appeals (CA) in CA-GR CV No. 34742
In June, 1986, Petitioner Fernando Santos and Respondent Nieves Reyes were introduced
to each by MelitonZabat regarding a lending business venture proposed by Nieves. There
was a verbal agreement that Santos would act as a 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 Nieves and Zabat would earn 15% each.
In July 1986, Nieves introduced Gragera, chairman of Monte Maria Development

Corporation, to petitioner. Petitioner and Gragera executed and agreement providing funds
for Monte Marias members at P1.31 commission per thousand paid daily to petitioner.
Nieves kept the books as representative of petitioner while Arsenio, husband of Nieves,
acted as credit investigator.
On August 6, 1986, Santos, Nieves and Zabat executed the Article of Agreement which
formalized their earlier verbal arrangement. It was later discovered that Zabat was
engaged in the same lending business in competition with their partnership and thus Zabat
was expelled from the partnership.
On June 5, 1987, Santos filed a complaint for recovery of sum of money and damages
against respondents in their capacities as employees of petitioner, with having
misappropriated funds intended for Gragera for the period July 8, 1986 up to March 31,
1987.
Respondents asserted that they were partners and not mere employees of petitioner. They
allege that the complaint was filed to preempt and prevent them from claiming their
rightful share to the profits of the partnership.
Page 2 of 37
Petitioner avers that upon discovery of Zabats activities, he ceased infusing funds, thereby
causing the extinguishment of the partnership. That the agreement with Gragera was
distinct partnership and that respondents were hired as salaried employees with respect to
the partnership between petitioner and Gragera.
Issue: Whether or not respondents were employees or partners of petitioner?
Held: They were partners.
While concededly, the partnership between [petitioner,] Nieves and Zabat was technically
dissolved by the expulsion of Zabat therefrom, the remaining partners simply continued
the business of the partnership without undergoing the procedure relative to
dissolution. Instead, they invited Arsenio to participate as a partner in their
operations. There was therefore, no intent to dissolve the earlier partnership. The
partnership between [petitioner,] Nieves and Arsenio simply took over and continued the
business of the former partnership with Zabat, one of the incidents of which was the
lending operations with Monte Maria.
Gragera and [petitioner] were not partners. The money-lending activities undertaken with
Monte Maria was done in pursuit of the business for which the partnership between
[petitioner], Nieves and Zabat (later Arsenio) was organized. Gragera who represented
Monte Maria was merely paid commissions in exchange for the collection of loans. The
commissions were fixed on gross returns, regardless of the expenses incurred in the
operation of the business. The sharing of gross returns does not in itself establish a
partnership.
We agree with both courts on this point. 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.
Indeed, the partnership was established to engage in a money-lending business, despite the
fact that it was formalized only after the Memorandum of Agreement had been signed by
petitioner and Gragera. Contrary to petitioners contention, there is no evidence to show
that a different business venture is referred to in this Agreement, which was executed on
August 6, 1986, or about a month after the Memorandum had been signed by petitioner
and Gragera on July 14, 1986.
Page 3 of 37
2. Sevilla v. Court of Appeals (principal-agent relationship v. partnership)

GR No.L-41182-3. April 16, 1988
Facts:
Tourist world service leased the premises belonging to the party of the first
part(SegundinaNoguera) at Mabini St., Manila for the formers use as a branch office. In the
said contract the party of the third part (Lina Sevilla) held herself solidarily liable with the
party of the part for the prompt payment of the monthly rental agreed on. When the branch
office was opened, the same was run by the herein appellant.
On or about November 24, 1961 the Tourist World Service, Inc. appears to have been
informed that Lina Sevilla was connected with a rival firm, the Philippine Travel Bureau,
and, since the branch office was anyhow losing, the Tourist World Service considered
closing down its office. This was firmed up by two resolutions of the board of directors of
Tourist World Service, Inc. dated Dec. 2, 1961 the first abolishing the office of the manager
and vice-president of the Tourist World Service, Inc., Ermita Branch, and the second,
authorizing the corporate secretary to receive the properties of the Tourist World Service
then located at the said branch office.
The contract with SegundinaNoguera for the use of the Branch Office premises was
terminated and while the effectivity thereof was Jan. 31, 1962, the appellees no longer used
it. As a matter of fact appellants used it since Nov. 1961. Because of this, and to comply with
the mandate of the Tourist World Service, the corporate secretary GabinoCanilao went over
to the branch office, and, finding the premises locked, and, being unable to contact Lina
Sevilla, he padlocked the premises on June 4, 1962 to protect the interests of the Tourist
World Service.
When neither the appellant Lina Sevilla nor any of her employees could enter the locked
premises, a complaint wall filed by the herein appellants against the appellees with a
prayer for the issuance of mandatory preliminary injunction. Both appellees answered with
counterclaims. For apparent lack of interest of the parties therein, the trial court ordered
the dismissal of the case without prejudice.
The appellee SegundinaNoguera sought reconsideration of the order dismissing her
counterclaim which the court a quo, in an order dated June 8, 1963, granted permitting her
to present evidence in support of her counterclaim.
On June 17,1963, appellant Lina Sevilla refiled her case against the herein appellees and
after the issues were joined, the reinstated counterclaim of SegundinaNoguera and the new
complaint of appellant Lina Sevilla were jointly heard following which the court a quo
ordered both cases dismiss for lack of merit,
Page 4 of 37
Hence this petition,
Issue: What is the relationship between Sevilla and TWS?
Held: Principal- Agent relationship
The records will show that the petitioner, Lina Sevilla, was not subject to control by the
private respondent Tourist World Service, Inc., either as to the result of the enterprise or as
to the means used in connection therewith. In the first place, under the contract of lease
covering the Tourist Worlds Ermita office, she had bound herself in solidum as and for
rental payments, an arrangement that would be like claims of a master-servant
relationship.
In the second place, and as found by the Appellate Court, '[w]hen the branch office was
opened, the same was run by the herein appellant Lina O. Sevilla payable to Tourist World
Service, Inc. by any airline for any fare brought in on the effort of Mrs. Lina Sevilla. Under
these circumstances, it cannot be said that Sevilla was under the control of Tourist
World Service, Inc. "as to the means used." Sevilla in pursuing the business, obviously
relied on her own gifts and capabilities.It is further admitted that Sevilla was not in the
company's payroll. For her efforts, she retained 4% in commissions from airline bookings,
the remaining 3% going to Tourist World. Unlikean employee then, who earns a fixed
salary usually, she earned compensation in fluctuating amounts depending on her
booking successes. The court also do not consider the contention of Lina Sevilla
about embarking on a joint venture or otherwise, a partnership. And apparently,
Sevilla herself did not recognize the existence of such a relation. In her letter of November
28, 1961, she expressly 'concedes your [Tourist World Service, Inc.'s] right to stop the
operation of your branch office in effect, accepting Tourist World Service, Inc.'s control
over the manner in which the business was run. A joint venture, including a partnership,
presupposes generally a of standing between the joint co-venturers or partners, in
which each party has an equal proprietary interest in the capital or property
contributed and where each party exercises equal rights in the conduct of the
business.16 furthermore, the parties did not hold themselves out as partners, and the
building itself was embellished with the electric sign "Tourist World Service, Inc. in lieu of a
distinct partnership name.
Hence the Court's considered opinion, that when the petitioner, Lina Sevilla, agreed to
(wo)man the private respondent, Tourist World Service, Inc.'s Ermita office, she must have
done so pursuant to a contract of agency. It is the essence of this contract that the agent
renders services "in representation or on behalf of another. In the case at bar, Sevilla
solicited airline fares, but she did so for and on behalf of her principal, Tourist World
Page 5 of 37
Service, Inc. As compensation, she received 4% of the proceeds in the concept of

commissions. And as we said, Sevilla herself based on her letter of November 28, 1961, pre-
assumed her principal's authority as owner of the business undertaking. We are convinced,
considering the circumstances and from the respondent Court's recital of facts, that the ties
had contemplated a principal agent relationship, rather than a joint managament or a
partnership.
But unlike simple grants of a power of attorney, the agency that we hereby declare to be
compatible with the intent of the parties, cannot be revoked at will. The reason is that it is
one coupled with an interest, the agency having been created for mutual interest, of the
agent and the principal. It appears that Lina Sevilla is a bona fide travel agent herself, and
as such, she had acquired an interest in the business entrusted to her. Moreover, she had
assumed a personal obligation for the operation thereof, holding herself solidarily liable for
the payment of rentals. She continued the business, using her own name, after Tourist
World had stopped further operations. Her interest, obviously, is not to the commissions
she earned as a result of her business transactions, but one that extends to the very subject
matter of the power of management delegated to her. It is an agency that, as we said,
cannot be revoked at the pleasure of the principal. Accordingly, the revocation complained
of should entitle the petitioner, Lina Sevilla, to damages.
3. EligioEstanislao, Jr v. Court of Appeals, Remedios Estanislao, Emilio and Leocadio

Santiago (partnership agreement) GR No.L-49982. April 27, 1988
Facts:
Petitioner and private respondents are brothers and sisters who are co-owners of certain
lots at the corner of Annapolis and Aurora Blvd., Quezon City which were then being leased
to the Shell Company of the Philippines Limited (SHELL)
They agreed to open and operate a gas station thereat to be known as Estanislao Shell
Service Station with an initial investment of P15,000.00 to be taken from the advance
rentals due to them from SHELL for the occupancy of the said lots owned in common by
them. A joint affidavit was executed by them on April 11, 1966 which was prepared by Atty.
Democrito Angeles. They agreed to help their brother, petitioner herein, by allowing him to
operate and manage the gasoline service station of the family.
For practical purposes and in order not to run counter to the company's policy of
appointing only one dealer, it was agreed that petitioner would apply for the dealership.
Respondent Remedios helped in co-managing the business with petitioner from May 3,
1966 up to February 16, 1967.
Page 6 of 37
The parties entered into an Additional Cash Pledge Agreement with SHELL wherein it was
reiterated that the P15,000.00 advance rental shall be deposited with SHELL to cover
advances of fuel to petitioner as dealer with a proviso that said agreement "cancels and
supersedes the Joint Affidavit dated 11 April 1966 executed by the co-owners."
The petitioner submitted financial statements regarding the operation of the business to
private respondents, but thereafter petitioner failed to render subsequent accounting.
Hence through Atty. Angeles, a demand was made on petitioner to render an accounting of
the profits.
The financial report of December 31, 1968 shows that the business was able to make a
profit of P87,293.79 and that by the year ending 1969, a profit of P150,000.00 was realized
private respondents filed a complaint in the Court of First Instance of Rizal against
petitioner praying among others that the latter be ordered:
1. to execute a public document embodying all the provisions of the partnership agreement
entered into between plaintiffs and defendant as provided in Article 1771 of the New Civil
Code;
2. to render a formal accounting of the business operation covering the period from May 6,
1966 up to December 21, 1968 and from January 1, 1969 up to the time the order is issued
and that the same be subject to proper audit;
3. to pay the plaintiffs their lawful shares and participation in the net profits of the business
in an amount of no less than P l50,000.00 with interest at the rate of 1% per month from
date of demand until full payment thereof for the entire duration of the business; and
4. to pay the plaintiffs the amount of P 10,000.00 as attorney's fees and costs of the suit (pp.
13-14 Record on Appeal.)
CFI of Rizal
decided in favor of the plaintiffs and as against the defendant:
(1) Ordering the defendant to execute a public instrument embodying all the provisions of
the partnership agreement entered into between plaintiffs and defendant as provided for
in Article 1771, Civil Code of the Philippines;
(2) Ordering the defendant to render a formal accounting of the business operation from
April 1969 up to the time this order is issued, the same to be subject to examination and
audit by the plaintiff,
(3) Ordering the defendant to pay plaintiffs their lawful shares and participation in the net
profits of the business in the amount of P 150,000.00, with interest thereon at the rate of
One (1%) Per Cent per month from date of demand until full payment thereof;
(4) Ordering the defendant to pay the plaintiffs the sum of P 5,000.00 by way of attorney's
fees of plaintiffs' counsel; as well as the costs of suit. (pp. 161-162. Record on Appeal).
Page 7 of 37
A motion for reconsideration of said decision filed by petitioner was denied on January 30,
1979. Not satisfied therewith, the petitioner now comes to this court by way of this petition
for certiorari alleging that the respondent court erred:
1. In interpreting the legal import of the Joint Affidavit vis-a-vis the Additional Cash Pledge
Agreement; and
2. In declaring that a partnership was established by and among the petitioner and the
private respondents as regards the ownership and or operation of the gasoline service
station business.
Issue: W/N there was a partnership formed?
Held: There was in fact such partnership agreement between the parties.
In the aforesaid Joint Affidavit of April 11, 1966 , it is clearly stipulated by the parties that
the P15,000.00 advance rental due to them from SHELL shall augment their "capital
investment" in the operation of the gasoline station, which advance rentals shall be
credited as rentals from May 25, 1966 up to four and one-half months or until 10 October
1966, more or less covering said P15,000.00.
Additional Cash Pledge Agreement", the private respondents and petitioners assigned to
SHELL the monthly rentals due them commencing the 24th of May 1966 until such time
that the monthly rentals accumulated equal P15,000.00 which private respondents agree to
be a cash deposit of petitioner in favor of SHELL to increase his credit limit as dealer.
It provided therein that "This agreement, therefore, cancels and supersedes the Joint
Affidavit dated 11 April 1966 executed by the CO-OWNERS."
Petitioner contends that because of the said stipulation cancelling and superseding that
previous Joint Affidavit, whatever partnership agreement there was in said previous
agreement had thereby been abrogated. We find no merit in this argument.
Said cancelling provision was necessary for the Joint Affidavit speaks of P15,000.00
advance rentals starting May 25, 1966 while the latter agreement also refers to advance
rentals of the same amount starting May 24, 1966.
There is, therefore, a duplication of reference to the P15,000.00 hence the need to provide
in the subsequent document that it "cancels and supersedes" the previous one. True it is
that in the latter document, it is silent as to the statement in the Joint Affidavit that the
P15,000.00 represents the "capital investment" of the parties in the gasoline station
business and it speaks of petitioner as the sole dealer, but this is as it should be for in the
latter document SHELL was a signatory and it would be against its policy if in the
Page 8 of 37
agreement it should be stated that the business is a partnership with private respondents
and not a sole proprietorship of petitioner.
Petitioner submitted to private respondents periodic accounting of the business. Petitioner

gave a written authority to private respondent Remedios Estanislao, his sister, to examine
and audit the books of their "common business" (amingnegosyo). Respondent Remedios
assisted in the running of the business. There is no doubt that the parties hereto formed a
partnership when they bound themselves to contribute money to a common fund with the
intention of dividing the profits among themselves.
The sole dealership by the petitioner and the issuance of all government permits and
licenses in the name of petitioner was in compliance with the afore-stated policy of SHELL
and the understanding of the parties of having only one dealer of the SHELL products.
Judgment appealed from is AFFIRMED in toto.
4. Dan Fue Leung v. Hon. Intermediate Appellate Court and Leung Yiu(share of profits
and losses) GR No. 70926. January 31, 1989
Gutierrez Jr, J.
Facts:
Suh WahPanciteria, a restaurant located at Florentino Torres St. Sta. Cruz Manila was
established sometime in Oct. 1955 as a single proprietorship and its licenses and permits
were issued and in favor of Dan Fue Leung as sole proprietor. Respondent adduced claims
that the restaurant was actually a partnership and that he was one of the partners who
contributed P4,000.00 to its initial establishment and in return, 22% of its annual profits.
Evidencing a receipt adduced by private respondent wherein petitioner acknowledged
acceptance of P4k by affixing petitioner's signature written in chinese characters. Florence
Yap, a translator requested by the court verified and affirmed the validty of said receipt.
Witnesses So Sia and Antonio Ah Heng corroborated private respondent's testimony that
they were present when receipt was signed. Private respondent received from petitioner
amount of P12k as profits of the operation for the year of 1974. Witness Teodulo Diaz Chief
of savings Dept. of China bank testified said check was deposited to private respondent's
savings account. Petitioner however, denied having received from private respondent
amount of P4k. He contested and impugned the genuiness of the receipt. He averred that
petitioner did not receive any contribution and that he was the sole owner. Petitioner
presented various gov't licenses and permits showing that the restaurant was a sole
proprietorship solely owned and operated by himself alone. He also denied having issued
to private respondent P12k check. Petitioner raises also prescription because the alleged
Page 9 of 37
receipt is dated Oct. 1955 and complaint was on July 13, 1978 as written demands were
ever made by private respondent.
Issue: WON private respondent is a partner of petitioner in establishing the restaurant
WON payment of share of profits shall continue into the future with no fixed ending date
Held: (1) Yes. Private respondent is a partner of the restaurant because of Art.1767, the
requisites of partnership have been established. It would be incorrect to state that if a
partner does not assert his rights anytime within 10 years from start of operations, such
rights are irretrievably lost. Private respondent's cause of action is premised upon failure
of petitioner to give him the agreed profits of the restaurant. In effect, private respondent
was asking for an accounting of his interests in the partnership.
As to prescription, it only runs upon dissolution of the partnership when final accounting is
done.
(2) No. Considering the facts of the case, the court may decree a dissolution under Art.1831
of the Civil Code. There shall be a liquidation and winding up of partnership affairs, return
of capital and other incidents of dissolution because the continuation of the partnership
has become inequitable
5. Fernando Santos v. Sps. Arsenio and Nieves Reyes (an industrialist partners share
in net profits) GR No. 135813. October 25, 2001
Facts:
Petitioner Fernando Santos and Respondent Nieves Reyes were introduced to each other
by one MelitonZabat 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 Nieves and Zabat would earn 15% each.
Nieves introduced Cesar Gragera, chairman of the Monte Maria Development Corporation,
to petiotioner seeking short-term loans for members of the corporation. Petitioner and
Gragera executed an agreement providing funds for Monte Marias members: Monte Maria
was entitled to P1.31 commission per thousand paid daily to petitioner. Nieves kept the
books as representative of petitioner while Respondent Arsenioacted as credit investigator.
Page 10 of 37
On August 1986, Petitioner Santos, Respondent Nieves and Zabat executed the Article of
Agreement which formalized their earlier verbal agreement.
Petitioner andNieves later discovered that their partner Zabat engaged in the same lending
business in competition with their partnership. Zabat was expelled from the partnership.
Petitioner filed a complaint for recovery of sum of money and damages against
respondents on the ground that in their capacities as his employees misappropriated funds
intended for Gragera. Upon Grageras complaint that his commissions were inadequately
remitted, petitioner entrusted P200,000.00 to Nieves to be given to Gragera. Nieves
allegedly failed to account for the amount. Petitioner asserted that after examination of the
records, he found that of the total amount of P4,623,201.90 entrusted to respondents, only
P3,068,133.20 was remitted to Gragera, thereby leaving the balance of P1,555,065.70
unaccounted for.
Respondents claim: that they were partners and not mere employees of petitioner and that
the complaint was filed to prevent them from claiming their share. That, Arsenio was
enticed by petitioner to take the place of Zabat after petitioner learned of Zabats activities.
Arsenio resigned from his job at the Asian Development Bank to join the partnership.That,
Nieves participated in the business as a partner, as the lending activity with Monte Maria
originated from her initiative. Except for the limited period of July 8, 1986 through August
20, 1986, she did not handle sums intended for Gragera. Collections were turned over to
Gragera because he guaranteed 100% payment of all sums loaned by Monte Maria.Entries
she made on worksheets were based on this assumptive 100% collection of all loans.
Petitioner: 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 and respondents were hired as
salaried employees with respect to said partnership.
RTC:respondents were partners, not mere employees, of petitioner. Gragera was only a
commission agent of petitioner, not his partner. Petitioner failed to prove that he had
entrusted any money to Nieves. Thus, respondents counterclaim for their share in the
partnership and for damages was granted.
CA:upheld the RTC decision. The following circumstances indicated the existence of a
partnership among the parties: (1) it was Nieves who broached to petitioner the idea of
starting a money-lending business and introduced him to Gragera; (2) Arsenio received
dividends or profit-shares); and (3) the partnership contract was executed after the
Page 11 of 37
Agreement with Gragera and petitioner and thus showed the parties intention to consider
it as a transaction of the partnership. In their common venture, petitioner invested capital
while respondents contributed industry or services, with the intention of sharing in the
profits of the business. Disbelieved petitioners claim that Nieves had misappropriated the
fund; it was petitioners task to collect the amounts due, while hers was merely to prepare
the daily cash flow reports.
Issue: Whether or not respondents were entitled to the partnership profits?
Held: Yes, the respondents were entitled to the partnership profits.
The parties relationship is of a partnership.The partnership between petitioner, Nieves

and Zabat was technically dissolved by the expulsion of Zabattherefrom, the remaining
partners simply continued the business of the partnership without undergoing the
procedure relative to dissolution. Instead, they invited Arsenio to participate as a partner
in their operations. There was therefore, no intent to dissolve the earlier partnership. The
partnership between petitioner, Nieves and Arsenio simply took over and continued the
business of the former partnership with Zabat, one of the incidents of which was the
lending operations with Monte Maria.
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.
Nieves was not merely petitioners employee. She discharged her bookkeeping duties in
accordance with paragraphs 2 and 3 of the Agreement. Arsenios duties as credit
investigator are subsumed under the phrase screening of prospective borrowers.
All expenses incurred by the money-lending enterprise of the parties must first be
deducted from the total income in order to arrive at the net profit of the partnership. The
share of each one of them should be based on this net profit and not from the gross income
or total income reflected in Exhibit 10-I, which the two courts invariably referred to as cash
flow sheets.
Daily CashflowReports do not reflect the business expenses incurred by the parties,
because they show only the daily cash collections.Contrary to the rulings of both the trial
and the appellate courts, respondents exhibits do not reflect the complete financial
condition of the money-lending business.
Page 12 of 37
For the purpose of determining the profit that should go to an industrial partner
(who shares in the profits but is not liable for the losses), the gross income from all
the transactions carried on by the firm must be added together, and from this sum
must be subtracted the expenses or the losses sustained in the business. Only in the
difference representing the net profits does the industrial partner share. But if, on
the contrary, the losses exceed the income, the industrial partner does not share in
the losses.
The award of the partnership share, as computed by the trial court and adopted by the CA,
to be incomplete and not binding on this Court.
6. Sunga-Chan v. Chua (juridical personality of a partnership)

GR No. 143340. August 15, 2001
Facts:
On June 22, 1992, Lamberto T. Chua (hereafter respondent) filed a complaint against
Lilibeth Sunga Chan (hereafter petitioner Lilibeth) and Cecilia Sunga (hereafter petitioner
Cecilia), daughter and wife, respectively of the deceased Jacinto L. Sunga (hereafter
Jacinto), for Winding Up of Partnership Affairs, Accounting, Appraisal and Recovery of
Shares and Damages with Writ of Preliminary Attachment with the Regional Trial Court,
Branch 11, Sindangan, Zamboanga del Norte.
Respondent alleged that in 1977, he verbally entered into a partnership with Jacinto in the
distribution of Shellane Liquefied Petroleum Gas (LPG) in Manila. For business
convenience, respondent and Jacinto allegedly agreed to register the business name of their
partnership, SHELLITE GAS APPLIANCE CENTER (hereafter Shellite), under the name of
Jacinto as a sole proprietorship. Respondent allegedly delivered his initial capital
contribution of P100,000.00 to Jacinto while the latter in turn produced P100,000.00 as his
counterpart contribution, with the intention that the profits would be equally divided
between them. The partnership allegedly had Jacinto as manager, assisted by Josephine Sy
(hereafter Josephine), a sister of the wife of respondent, ErlindaSy. As compensation,
Jacinto would receive a managers fee or remuneration of 10% of the gross profit and
Josephine would receive 10% of the net profits, in addition to her wages and other
remuneration from the business.
Allegedly, from the time that Shellite opened for business on July 8, 1977, its business
operation went quite well and was profitable. Respondent claimed that he could attest to
the success of their business because of the volume of orders and deliveries of filled
Shellane cylinder tanks supplied by Pilipinas Shell Petroleum Corporation. While Jacinto
Page 13 of 37
furnished respondent with the merchandise inventories, balance sheets and net worth of
Shellite from 1977 to 1989, respondent however suspected that the amount indicated in
these documents were understated and undervalued by Jacinto and Josephine for their
own selfish reasons and for tax avoidance.
Upon Jacintos death in the later part of 1989, his surviving wife, petitioner Cecilia and
particularly his daughter, petitioner Lilibeth, took over the operations, control, custody,
disposition and management of Shellite without respondents consent. Despite repeated
demands upon petitioners for accounting, inventory, appraisal, winding up and restitution
of his net shares in the partnership, they failed to comply. Petitioner Lilibeth allegedly
continued the operations of Shellite, converting to her own use and advantage its
properties.
On March 31, 1991, respondent claimed that after petitioner Lilibeth ran out of alibis and
reasons to evade respondents demands, she disbursed out of the partnership funds the
amount of P200,000.00 and partially paid the same to respondent. Petitioner Lilibeth
allegedly informed respondent that the P200,000.00 represented partial payment of the
latters share in the partnership, with a promise that the former would make the complete
inventory and winding up of the properties of the business establishment. Despite such
commitment, petitioners allegedly failed to comply with their duty to account, and
continued to benefit from the assets and income of Shellite to the damage and prejudice of
respondent. Petitioners filed a Motion to Dismiss on the ground that the Securities and
Exchange Commission (SEC) in Manila, not the Regional Trial Court in Zambaongadel Norte
had jurisdiction over the action. Respondent opposed the motion to dismiss.
The trial court finding the complaint sufficient in form and substance denied the motion to
dismiss. Petitioners filed their Answer with Compulsory Counterclaims, contending that
they are not liable for partnership shares, unreceived income/profits, interests, damages
and attorneys fees, that respondent does not have a cause of action against them, and that
the trial court has no jurisdiction over the nature of the action, the SEC being the agency
that has original and exclusive jurisdiction over the case. As counterclaim, petitioner
sought attorneys fees and expenses of litigation.
On August 2, 1993, petitioner filed a second Motion to Dismiss this time on the ground that
the claim for winding up of partnership affairs, accounting and recovery of shares in
partnership affairs, accounting and recovery of shares in partnership assets /properties
should be dismissed and prosecuted against the estate of deceased Jacinto in a probate or
intestate proceeding.
Page 14 of 37
Issues: (1)Whether or not respondent Lamberto Chua and Jacinto L. Sunga has entered
into a partnership.
Whether or not Chuas claim is barred by prescription.
Held: (1) Yes. The court ruled that a partnership may be constituted in any form, except
where immovable property or real rights are contributed thereto, in which case a public
instrument shall be necessary. Also, Article 1772 of the Civil Code requires that partnership
with a capital of Php3,000.00 or more must register with the Securities and Exchange
Commission, however this registration requirement is not mandatory. Article 1768 of the
Civil Code explicitly provides that the partnership retains its juridical personality even if it
fails register. The failure to register the contract of partnership does not invalidate the
same as among the partners, so long as the contract has the essential requisites, because
the main purpose of registration is to give notice to third parties, and it can be assumed
that the members themselves knew of the contents of their contract.
No. The action for accounting filed by Chua three years after Jacintos death was
well within the prescribed period. The Civil Code provides that an action to enforce an oral
contract prescribes in six years while the right to demand an accounting for a partners
interest as against the person continuing the business accrues at the date of dissolution, in
the absence of any contrary agreement. Considering that the death of a partner results in
the dissolution of the partnership, in this case, it was after Jacintos death that Chua as the
surviving partner had the right to an account of his interest as against Lilibeth. It bears
stressing that while Jacintos death dissolved the partnership, the dissolution did not
immediately terminate the partnership. The Civil Code expressly provides that upon
dissolution, the partnership continues and its legal personality is retained until the
complete winding up of its business, culminating in its termination.
7. Palting v. San Jose Petroleum Incorporated (foreign corporation; reciprocal rights

between a foreign country and the Philippines)
GR No.L-14441. December 17, 1966
DOCTRINE:
FOREIGN CORPORATION; RECIPROCAL RIGHTS BETWEEN A FOREIGN COUNTRY AND
THE PHILIPPINES
There are no reciprocal rights (parity rights) because the corporation was not owned by
the US.
FACTS:
Page 15 of 37
San Jose Petroleum filed with the Philippine Securities and Exchange Commission a sworn
registration statement, for the registration and licensing for sale in the Philippines Voting
Trust Certificates of its capital stock. It was alleged that the entire proceeds of the sale of
said securities will be devoted or used exclusively to finance the operations of San Jose Oil
Company, Inc., a domestic mining corporation.
Pedro R. Palting and others, allegedly prospective investors in the shares of SAN JOSE
PETROLEUM, filed with the Securities and Exchange Commission an opposition to the
registration and licensing of the securities on the grounds that (1) the tie-up between the
issuer, SAN JOSE PETROLEUM, a Panamanian corporation, and SAN JOSE OIL, a domestic
corporation, violates the Constitution of the Philippines, the Corporation Law and the
Petroleum Act of 1949; (2) the issuer has not been licensed to transact business in the
Philippines; (3) the sale of the share of the issuer is fraudulent, and works or tends to work
a fraud upon Philippine purchasers; and (4) the issuer as an enterprise, as well as its
business, is based upon unsound business principles.
Answering the foregoing opposition of Palting, et al., the registrant SAN JOSE PETROLEUM
claimed that it was a "business enterprise" enjoying parity rights under the ordinance
appended to the Constitution, which parity right, with respect to mineral resources in the
Philippines, may be exercised, pursuant to the Laurel-Langley Agreement, only through the
medium of a corporation organized under the laws of the Philippines. Thus, registrant
which is allegedly qualified to exercise rights under the Parity Amendment, had to do so
through the medium of a domestic corporation, which is the SAN JOSE OIL. It refuted the
contention that the Corporation Law was being violated, by alleging that Section 13 thereof
applies only to foreign corporations doing business in the Philippines, and registrant was
not doing business here. The mere fact that it was a holding company of SAN JOSE OIL and
that registrant undertook the financing of and giving technical assistance to said
corporation did not constitute transaction of business in the Philippines. Registrant also
denied that the offering for sale in the Philippines of its shares of capital stock was
fraudulent or would work or tend to work fraud on the investors. On August 29, 1958, and
on September 9, 1958 the Securities and Exchange Commissioner issued the orders object
of the present appeal.
ISSUE:Whether or not respondent SAN JOSE PETROLEUM, an American business

enterprise, is entitled to parity rights in the Philippines.
HELD:
No.
Page 16 of 37
Firstly It is not owned or controlled directly by citizens of the United States, because it is
owned and controlled by a corporation, the OIL INVESTMENTS, another foreign
(Panamanian) corporation.
Secondly Neither can it be said that it is indirectly owned and controlled by American
citizens through the OIL INVESTMENTS, for this latter corporation is in turn owned and
controlled, not by citizens of the United States, but still by two foreign (Venezuelan)
corporations, the PANTEPEC OIL COMPANY and PANCOASTAL PETROLEUM.
Thirdly Although it is claimed that these two last corporations are owned and controlled
respectively by 12,373 and 9,979 stockholders residing in the different American states,
there is no showing in the certification furnished by respondent that the stockholders of
PANCOASTAL or those of them holding the controlling stock, are citizens of the United
States.
Fourthly Granting that these individual stockholders are American citizens, it is yet
necessary to establish that the different states of which they are citizens, allow Filipino
citizens or corporations or associations owned or controlled by Filipino citizens, to engage
in the exploitation, etc. of the natural resources of those states (see paragraph 3, Article VI
of the Laurel-Langley Agreement, supra.). Respondent has presented no proof to this effect.
Fifthly But even if the requirements mentioned in the two immediately preceding
paragraphs are satisfied, nevertheless to hold that the set-up disclosed in this case, with a
long chain of intervening foreign corporations, comes within the purview of the Parity
Amendment regarding business enterprises indirectly owned or controlled by citizens of
the United States, is to unduly stretch and strain the language and intent of the law. Add to
this the admitted fact that the shares of stock of the PANTEPEC and PANCOASTAL which
are allegedly owned or controlled directly by citizens of the United States, are traded in the
stock exchange in New York, and you have a situation where it becomes a practical
impossibility to determine at any given time, the citizenship of the controlling stock
required by the law.
In the circumstances, we have to hold that the respondent SAN JOSE PETROLEUM, as
presently constituted, is not a business enterprise that is authorized to exercise the parity
privileges under the Parity Ordinance, the Laurel-Langley Agreement and the Petroleum
Law. Its tie-up with SAN JOSE OIL is, consequently, illegal.
8. Francisco Bastida v. Menzi& Co., Inc (employment and not partnership) GR No.L-
35840. March 31, 1933 (58 Phil 188)
Page 17 of 37
Facts:
That on April 27, 1922, the defendant Menzi& Co., Inc. through its president and general
manager, J.M. Menzi, under the authority of the board of directors, entered into a contract
with the plaintiff to engage in the business of exploiting prepared fertilizers.
Pursuance of said contract, plaintiff and defendant Menzi& Co., Inc., began to manufacture
prepared fertilizers, the former superintending the work of actual preparation, and the
latter, through defendants J.M. Menzi and P. C. 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; the plaintiff
had no participation in the making of these entries, which were wholly in the defendants'
charge, under whose orders every entry was made;
The defendant Menzi& Co., Inc., was obliged to render annual balance sheets to be plaintiff
upon the 30th day of June of each year; that the plaintiff had no intervention in the
preparation of these yearly balances, nor was he permitted to have any access to the books
of account; and when the balance sheets were shown him, he, believing in good faith that
they contained the true statement of the partnership business, and relying upon the good
faith of the defendants, Menzi& Co., Inc., J.M. Menzi, and P.C. Schlobohm, accepted and
signed them, the last balance sheet having been rendered in the year 1926;
The plaintiff was kept in ignorance of the defendants' acts relating to the management of
the partnership funds, and the keeping of accounts, until he was informed and so believes
and alleges, that the defendants had conspired to conceal from him the true status of the
business, and to his damage and prejudice made false entries in the books of account and in
the yearly balance sheets, the exact nature and amount of which it is impossible to
ascertain, even after the examination of the books of the business, due to the defendants'
refusal to furnish all the books and data required for the purpose, and the constant
obstacles they have placed in the way of the examination of the books of account and
vouchers;
That when the plaintiff received the information mentioned in the preceding paragraph, he
demanded that the defendants permit him to examine the books and vouchers of the
business, which were in their possession, in order to ascertain the truth of the alleged false
entries in the books and balance sheets submitted for his approval, but the defendants
refused, and did not consent to the examination until after the original complaint was filed
in this case;
As a result of the partial examination of the books of account of the business, the plaintiff
has, through his accountants, discovered that the defendants, conspiring and confederating
Page 18 of 37
together, presented to the plaintiff during the period covered by the partnership contract
false and incorrect accounts,
The defendant, Menzi& CO., Inc., alleged that they made and entered into an employment
agreement with the plaintiff, who represented that he had had much experience in the
mixing of fertilizers, to superintend the mixing of the ingredients in the manufacture of
prepared fertilizers in its fertilizer department and to obtain orders for such prepared
fertilizers subject to its approval, for a compensation of 50 per cent of the net profits which
it might derive from the sale of the fertilizers prepared by him, and that said Francisco
Bastida worked under said agreement until April 27, 1922, and received the compensation
agreed upon for his services; that on the said 27th of April, 1922, the said Menzi& Co., Inc.,
and the said Francisco Bastida made and entered into the written agreement, whereby they
mutually agreed that the employment of the said Francisco Bastida by the said Menzi& Co.,
Inc., in the capacity stated, should be for a definite period of five years from that date and
under the other terms and conditions stated therein, but with the understanding and
agreement that the said Francisco Bastida should receive as compensation for his said
services only 35 per cent of the net profits derived from the sale of the fertilizers prepared
by him during the period of the contract instead of 50 per cent of such profits, as provided
in his former agreement;
Trial Court:
Wherefore, let judgment be entered:
(a) Holding that the contract entered into by the parties, evidenced by Exhibit A, as a
contract of general regular commercial partnership, wherein Menzi& Co., Inc., was
the capitalist, and the plaintiff, the industrial partner;
The appellant makes the following assignment of error:
I. The trial court erred in finding and holding that the contract Exhibit A
constitutes a regular collective commercial copartnership between the
defendant corporation, Menzi& Co., Inc., and the plaintiff, Francisco Bastida,
and not a contract of employment.
Issue: WON plaintiff Bastida and defendant Menzi and Co. are copartners in the fertilizer
business
Held:
Page 19 of 37
No. there was no contract of partnership. The court held that under the facts of this case the
relationship established between Menzi& Co. and by the plaintiff was to receive 35 per cent
of the net profits of the fertilizer business of Menzi& Co., Inc., in compensation for his
services of supervising the mixing of the fertilizers. Neither the provisions of the contract
nor the conduct of the parties prior or subsequent to its execution justified the finding that
it was a contract of copartnership. Whereby the plaintiff worked for the defendant
corporation for one-half of the net profits derived by the corporation from certain fertilizer
contracts. Plaintiff was paid his share of the profits from those transactions after Menzi&
Co., Inc., had deducted the same items of expense which he now protests. Plaintiff never
made any objection to defendant's manner of keeping the accounts or to the charges. The
business was continued in the same manner under the written agreement, Exhibit A, and
for four years the plaintiff never made any objection. On the contrary he approved and
signed every year the balance sheet and the profit and loss statement. It was only when
plaintiff's contract was about to expire and the defendant corporation had notified him that
it would not renew it that the plaintiff began to make objections.
The trial court relied on article 116 of the Code of Commerce, which provides that articles
of association by which two or more persons obligate themselves to place in a common
fund any property, industry, or any of these things, in order to obtain profit, shall be
commercial, no matter what its class may be, provided it has been established in
accordance with the provisions of this Code; but in the case at bar there was no common
fund, that is, a fund belonging to the parties as joint owners or partners. The business
belonged to Menzi& Co., Inc. The plaintiff was working for Menzi& Co., Inc. Instead of
receiving a fixed salary or a fixed salary and a small percentage of the net profits, he was to
receive 35 per cent of the net profits as compensation for his services. Menzi& Co., Inc., was
to advanced him P300 a month on account of his participation in the profits.
It is nowhere stated in Exhibit A that the parties were establishing a partnership or

intended to become partners. Great stress in laid by the trial judge and plaintiff's attorneys
on the fact that in the sixth paragraph of Exhibit A the phrase "ensociedad con" is used in
providing that defendant corporation not engage in the business of prepared fertilizers
except in association with the plaintiff (ensociedad con). The fact is that ensociedad con as
there used merely means en reunion con or in association with, and does not carry the
meaning of "in partnership with".
9. Magalona v. Pesayco (oral partnership) GR No.L-39607. February 6, 1934
Facts:
In September 1930, Encarnacion Magalona and Juan Sermeno, the plaintiffs and Juan
Pesayco, the defendant formed a partnership for the purpose of catching semillas de
Page 20 of 37
bagus o aua in the sea and rivers of San Jose, Antique Province. They agreed that Pesayco
would put in a bid for this privilege and if such is granted he would become the manager
and that each partner would contribute 1/3 of the capital. The defendant offered a bid
amounting to P5,550.09 which was the highest bid thus the privilege was awarded to
Pesayco. It was required that 1/4 of the bid should be deposited, therefore each partner
would be contributing 1/3 of the said amount. Pesayco, having only P410 on hand, wired
Lutero to complete the payment of the required deposit which the latter sent P1,000 to the
municipal treasurer of San Jose, Antique. From January 1, 1931 the business was managed
by Pesayco but he never gave any account of this catches or sales to his partners Magalona
and Sermeno except the two sales of semillas de bagus which he gave to TiburcioLutero
as representative of Magalona.
On April 21, 1931, a complaint was filed praying that (1) a receiver be appointed by the
court to manage and take charge of the funds and affairs of the partnership; (2) Pesayco be
ordered to pay his partners for their participation in the profits; (3) Pesayco be required to
turn over to the receiver all the funds of the partnership and (4) Pesayco to pay the costs. A
receiver was appointed by the court which took over the management and possession of all
devices and implements used in the partnership.
It was found that before April , , Pesayco sold , semillas de bagus

equivalent to P2,925 market value. He did not pay his partners any part of the said sale.
Pesayco did not deny the sale but denies that there was a partnership because the
partnership agreement was not in writing.
Issue: W/N there was a partnership even if the partnership agreement was not in writing?
Held: Yes.The partnership was proven by the oral testimony of the plaintiffs and witnesses
two of whom were Attorneys Lutero and Maza.Also, Article 1667 of the Civil Code provides
that Civil partnerships may be established in any form whatever, unless real property or
real rights are contributed to the same, in which case a public instrument shall be
necessary." Therefore, it is not required that the partnership agreement be in writing. This
decision is affirmed with costs against Pesayco.
10. Agad v. Mabato (partnership contract in a public instrument; lack of inventory)

GR No.L-24193. June 28, 1968
Facts:
Petitioner Mauricio Agad claims that he and defendant SeverinoMabato are - pursuant to a
public instrument dated August 29, 1952, copy of which is attached to the complaint as
Annex "A" - partners in a fishpond business to which they contributed P1, 000 each, with
Page 21 of 37
right to receive 50% of the profits. As managing partner, Mabato yearly rendered the
accounts of the operations of the partnership. However, for the years 1957-1963,
defendant failed to render the accounts despite repeated demands. Agad prayed in his
complaint against Mabato and Mabato&Agad Company, filed on June 9, 1964, that judgment
be rendered sentencing Mabato to pay him (Agad) the sum of P14, 000, as his share in the
profits of the partnership for the period from 1957 to 1963, in addition to P1, 000 as
attorney's fees, and ordering the dissolution of the partnership, as well as the winding up of
its affairs by a receiver to be appointed therefor.
Mabato denied the existence of the partnership alleging that Agad failed to pay his P1, 000
contributions. He then filed a motion to dismiss on the ground of lack of cause of action.
After due hearing, the court issued the order appealed from, granting the motion to dismiss
the complaint for failure to state a cause of action. This conclusion was predicated upon the
theory that the contract of partnership, Annex A , is null and void, pursuant to Art. 1773 of
our Civil Code, because an inventory of the fishpond referred in said instrument had not
been attached thereto.
Issue:
Whether or not immovable property has been contributed to the partnership as to warrant
the attachment of an inventory to the public instrument
Held:NO.
Article 1771 states that:

Art. . A partnership may be constituted in any form, except where immovable
property or real rights are contributed thereto, in which case a public instrument shall be
necessary.
Furthermore, Article 1773 provides that:
Art. . A contract of partnership is void, whenever immovable property is contributed

thereto, if inventory of said property is not made, signed by the parties; and attached to the
public instrument.
It should be noted that as stated in Annex "A" the partnership was established "to operate a
fishpond", not to "engage in a fishpond business". Moreover, none of the partners
contributed either a fishpond or a real right to any fishpond. Their contributions were
limited to the sum of P1, 000 each.
The operation of the fishpond mentioned in Annex "A" was the purpose of the partnership.
Neither said fishpond nor a real right thereto was contributed to the partnership or became
Page 22 of 37
part of the capital thereof, even if a fishpond or a real right thereto could become part of its
assets.
Therefore, Article 1773 of the Civil Code finds no application in the case at bar.
Note: Inventory of real property is governed by the civil code with respect to partnership.
Without which the contract of partnership would be rendered void. For its purpose is to
show how much is due from each partner to complete his share in the common fund.
OBLIGATIONS OF PARTNERS
1. The Great Council of the United States of the Improved Order of Red Men v.
Veteran Army of the Philippines (Veteran Army not a partnership)
GR No. 3186. March 7, 1907 (Phil 685)
Facts:
The party The Veteran Army of the Philippines is an association composed of men who
fought during the Spanish war and the Philippine insurrection. Its constitution provides for
the organization of posts, and among the posts thus organized is the General Henry W.
Lawton Post, No. 1.
On the 1st day of March, 1903, a contract of lease of parts of a certain building in the city of
Manila was signed by Lewis, Stovall, Hayes, as trustees of the Apache Tribe, No. 1. A certain
Albert E. McCabe, citing for and on behalf of Lawton Post, Veteran Army of the Philippines
as lessor and The Improved Order of Red Men were the lessee, for the two-year lease
commencing on February 1, 1903 up to February 28, 1905. The Lawton Post occupied the
premises in controversy for thirteen months, and only paid for that time, abandoning the
remaining period.
Judgment was rendered in the lower court in favor of the defendant McCabe, acquitting him
of the complaint. Judgment was rendered also against the Veteran Army of the Philippines
for P1,738.50, and the costs. From this judgment, the last named defendant has appealed.
The plaintiff did not appeal from the judgment acquitting defendant McCabe of the
complaint.
ISSUE:
Whether or not The Veteran Army of the Philippine is a civil partnership.
Whether or not the contact of lease was executed by someone authorized by The Veteran
Army of the Philippines.
Page 23 of 37
HELD:
First Issue NO, the appellant is clearly not a mercantile partnership and there is doubt
whether it is a civil partnership pursuant to Article 1665 of the Civil Code. The opinion of
the commentators is that the society is not constituted for the purpose of gain. Such
organization is covered by the Laws of Association of 1887, but that law was never
extended to the Philippines. Assuming that the appellant is covered by the Civil Code is
discussed in the second issue, as it is the most favorable to the plaintiff.
Second Issue - NO, Article 1695 of the Civil Code provides as follows:
"Should no agreement have been made with regard to the form of management, the
following rules shall be observed:
1. All the partners shall be considered as agents, and whatever any one of them may do by
himself shall bind the partnership; but each one may oppose the act of the others before
they may have produced any legal effect."
One partner of the association can be considered as an agent without an agreement,

however while the Supreme Court found that while the constitution of The Veteran Army of
the Philippines did not expressly state the agreement; it can be deduced from its articles
that such power declare the duties of its officers. It was concluded that such inquiry of a
contract must be decided by the whole department, as duties of several officers were
declared in the organizations constitution.
2. Leopoldo Criado v. Gutierrez Hermanos (independent, private act of a partner not

that of a partnership) GR No.L-12371. March 23, 1918 (37 Phil 883)
Facts:
In January 1900, Placido Gutierrez de Celis (37%), Miguel Gutierrez de Celis (37%), Miguel
Alonzo (16%), Daniel Perez (5%), and Leopoldo Criado (5%) formed a partnership called
Gutierrez Hermanos. Perez and Criado were the industrialist partners while the other three
are the capitalist partners which was subsequently dissolved and liquidated in 1903.
Before dissolution, Miguel Alonzo, formerly one of the general partners and manager of the
firm of Gutierrez Hermanos, has an obligation to pay plaintiff, Leopoldo Criado, the sum
P1,100 by reason of the contract of loan executed by the former to the latter. And to
prevent plaintiff from suing for the recovery of that debt an action against the testate or
intestate estate of the debtor who died without having paid his debt.
The other partner Miguel Gutierrez de Celis, manager of the firm, succeeded in persuading
the plaintiff by promising to return said sum to Criado this not being a strange
Page 24 of 37
obligation, for at the time of his death the deceased debtor Miguel Alfonso, was a partner in
the firm of Gutierrez Hermanos and had a share in the firm's assets. But the fact is that from
1898, when Alfonso died, until 1912, the date the complaint was filed, such settlement had
already been made of the decedent's said share and in spite of the attempts to collect made
by the creditor he was unable to recover the loan.
RULING OF THE LOWER COURT: After full trial, judgment was rendered on July 8, 1913, by
which, dismissing plaintiff's first cause of action
Issue:
Whether or not the act of the partner Alonzo will hold the partnership obliged to pay the
sum involved?
Ruling: NO.
Even on the supposition that at the time of his death the debtor Miguel Alfonso certainly
and positively left this debt and that in order to avoid judicial proceedings on the part of
the creditor, Miguel Gutierrez de Celis subrogated and put himself in the place of the
debtor, binding himself to pay said amount to plaintiff, yet, in view of the fact that said, loan
was made as an independent private act, unconnected with the mercantile operations of
the firm of Gutierrez Hermanos, and that the record does not duly show that this firm,
though its manager assumed the obligation to reimbursed the sum, there is no provision of
law to warrant us in holding that the firm of Gutierrez Hermanos is obliged to pay the
amount claimed by the plaintiff as the subject-matter of his first cause of action.
3. Jose Garrido v. Agustin Asencio (partners books of account)

GR No.L-4281. March 30, 1908 (10 Phil 691)
Facts:
Garrido and Asencio were members of a partnership doing business under the firm name
of Asencio y Cia. The business of the partnership did not prosper and it was dissolved by
mutual agreement of the members. Garrido brings this action to recover from Asencio, who
appears to have been left in charge of the books and the funds of the firm, the amount of the
capital which he had invested in the business. Asencio, alleging that there had been
considerable losses in the conduct of the business of the partnership, denied that there was
anything due for Garrido as claimed, and filed a cross complaint wherein he prayed for a
judgment against Garrido for a certain amount which he alleged to be due by Garrido under
the articles of partnership on account of Garrido's share of these losses.
Page 25 of 37
The trial court found that the evidence substantially sustains the claim of Asencio as to the
alleged losses in the business of the partnership and gave judgment in his favor.
ISSUES:
1. The trial court erred in holding the statement of account of the partnership of Asencio y
Cia submitted by Asencio as competent and sufficient evidence in this case.
2. The trial court erred in holding that evidence of record proved the existence of losses in
the business of the said partnership.
3. The trial court erred in refusing to give judgment in favor of Garrido.
HELD:
Garrido had equal rights with Asencio, and that during the existence of the partnership
they were equally responsible for the mode in which the books were kept and that the
entries made by one had the same effect as if they had been made by the other. The
testimony of record presenting Garrido jointly with Asencio kept these books, made entries
therein, and was responsible with him shows the correctness of the entries in these books.
Hence, must be taken to be admitted by him.
It appears from the record that the statement of account, the vouchers, and the books of the
company were placed at the disposition of Garrido for more than six weeks prior to the
trial, and that during the trial he was given every opportunity to indicate any erroneous or
fraudulent items appearing in the account, yet he was unable, or in any event he declined to
specify such items, contenting himself with a general statement to the effect that there
must be some mistake, as he did not and could not believe that the business had been
conducted at a loss.
Upon the whole record as brought here by Garrido, the Supreme Court ruled that the
weight of the evidence does sustain the findings of the trial court, and the judgment
entered in that court should be, and is hereby, affirmed.
4. Dan Fue Leung v. Hon. Intermediate Appellate Court (right to demand an

accounting)
GR No. 70926. January 31, 1989
(p. 8)
OBLIGATIONS OF THE PARTNERS WITH REGARD TO THIRD PERSONS
1. Sharruf& Co v. Baloise Fire Insurance (change of name of the partnership)

GR No. 44119. March 30, 1937 (64 Phil 258)
Page 26 of 37
Facts:
In the months of June and July 1933, the plaintiffs in this case, Sharruf and Elias Eskenzi
were doing business under the firm name of Sharruf& Co. Engaged in the textile business
they acquired an insurance policy from the herein defendant Balaoise Fire Insurance. Their
insured amount is 40,000.00 pesos and after sometime theySharruf&Eskenzi firm name
changed to Sharruf& Co without changing any of its partners but rather just the firm name.
Under the Civil Code, a change in the firm name without substantial change in the members
of the partnership shall acquire all the rights of the former existing name of the
partnership, including the fire insurance it gained from Balaoise Fire Insurance.
Months after June, around September of the same year, a fire due to an unknown cause,
destroyed the business place where the plaintiffs were engaged in the work. Only materials
were destroyed but did not amount to the total insured interest as claimed by Sharruf& Co
in the amount of 40,000.00. The discrepancy from the actual damaged destroyed was
different from the amount to be claimed.
Balaoise Fire Insurance first contends that Sharruf & Co cannot claim for they do not have
juridical personality in the name of the contract in which originally they signed. However,
the Supreme Court ruled in the previous case of Lim Cuan Sy Vs Northern Assurance, a
mere change in the operation name without intent to defraud of actual substantial change
in the partners or owner, shall still give rise to the acquisition of rights by the latter from
the former.
Issue:
Whether or not Sharruf & Co has juridical personality to claim from the insurance
company, from the insurance contract they entered.
Held: Yes. Sharruf& Co made a change of name and not in substantial, therefor they can
claim for the fact they have juridical personality. However, they committed fraud in their
presentation of claims due to the fact that the discrepancy to be claimed was higher from
what was really damaged. Such fraud resulted the Supreme Court to favor the defendant
Balaoise Fire Insurance.
Note: A change in name of the partnership is not a substantial change to remove all rights
of the partners to and from the partnership
2. Island Sales, Inc v. United Pioneers General Construction Company, et al (pro-rata

liability)
GR No.L-22493. July 31, 1975
Page 27 of 37
Facts:
On April 22, 1961, United Pioneers General Construction Company, a general partnership
duly registered under the laws of the Philippines, purchased from Island Sales, Inc. a motor
vehicle on the installment basis and for this purpose executed a promissory note for
P9,440.00, payable in twelve (12) equal monthly installments of P786.63, the first
installment payable on or before May 22, 1961 and the subsequent installments on the
22nd day of every month thereafter, until fully paid, with the condition that failure to pay
any of said installments as they fall due would render the whole unpaid balance
immediately due and demandable.
Having failed to receive the installment due on July 22, 1961, Island Sales, Inc. sued the
defendant company for the unpaid balance amounting to P7,119.07.
Benjamin C. Daco, Daniel A. Guizona, Noel C. Sim, Romulo B. Lumauig, and Augusto Palisoc
were included as co-defendants in their capacity as general partners of the defendant
company.
Daniel A. Guizona failed to file an answer and was consequently declared in default.
Subsequently, on motion of the plaintiff, the complaint was dismissed insofar as the
defendant Romulo B. Lumauig is concerned.
The defendants Benjamin C. Daco and Noel C. Sim moved to reconsider the decision
claiming that since there are five general partners, the joint and subsidiary liability of each
partner should not exceed one-fifth of the obligations of the defendant company. But the
trial court denied the said motion notwithstanding the conformity of the plaintiff to limit
the liability of the defendants Daco and Sim to only one-fifth of the obligations of the
defendant company.Hence, this appeal.
Issue:Whether or not the dismissal of the complaint to favor one of the general partners of
a partnership increases the joint and subsidiary liability of each of the remaining partners
for the obligations of the partnership.
Held:
No. Article 1816 of the Civil Code provides:
Art. 1816. All partners including industrial ones, shall be liable pro rata with
all their property and after all the partnership assets have been exhausted,
for the contracts which may be entered into in the name and for the account
of the partnership, under its signature and by a person authorized to act for
Page 28 of 37
the partnership. However, any partner may enter into a separate obligation
to perform a partnership contract.
In the instant case, there were five (5) general partners when the promissory note in
question was executed for and in behalf of the partnership. Since the liability of the
partners is pro rata, the liability of the appellant Benjamin C. Daco shall be limited to only
one-fifth of the obligations of the defendant company. The fact that the complaint against
the defendant Romulo B. Lumauig was dismissed, upon motion of the plaintiff, does not
unmake the said Lumauig as a general partner in the defendant company. In so moving to
dismiss the complaint, the plaintiff merely condoned Lumauig's individual liability to the
plaintiff.
3. De la Rosa v. Ortega Go-Cotay GR No.L-24243. January 15, 1926 (48 Phil 605)
Facts:
Go Lio and Vicente Go Sengco formed a partnership and opened a store in Nueva Ecija.
Later on Go Lio went to China and Vicente Go Sengco died and his son Enrique Ortega Go-
Cotay took charge of the business. Go Lio died in China, one of his children went to the
Philippines and filed a petition for the appointment of Ildefonso de la Rosa as administrator
of the intestate estate of Go Lio which was granted by CFI of Nueva Ecija. Ildefonso, in his
capacity as administrator of the intestate estate of Go Lio, requested Enrique to wind up the
business and deliver to him the portion corresponding to the deceased Go Lio. Enrique
denied the petition, alleging the business was his exclusively. Ildefonso filed with CFI of
Nueva Ecija a complaint against Enrique in which he prayed that Enrique be sentenced to
deliver to him one half of the property of said partnership. On August 3, 1918, the CFI of
Nueva Ecija appointed three persons as commissioners to make an inventory, liquidate and
determine the one-half belonging to the plaintiff of all the property of the partnership. On
August 9, 1918, in order to prevent one of the commissioners from assuming the office of
receiver, pursuant to the order of the court dated August 3, 1918, the defendant filed a
bond in the sum of P10,000 which authorized him to continue in possession of the
property. From 1913-1917 the partnership had a profit of 25k. Defendant filed an appeal
with the SC but was remanded to the court of origin for being immature and with
instruction to enter a final order with the liquidation of the partnership. Lower court
appointed three commissioners and discovered that the partnership suffered a net loss of
89k from 1919-1922. Since there was no profit plaintiff had nothing to recover.
Issue: WON the partnership should bear the losses incurred.
Held: No.The Court held that the defendant was a receiver. Prior August 3, 1918, defendant
assumed complete responsibility for the business by objecting to the appointment of a
receiver as prayed for by the plaintiff, and giving a bond therefore. Until that date his acts
Page 29 of 37
were those of a managing partner, binding against the partnership; but thereafter his acts
were those of a receiver.
A receiver has no right to carry on and conduct a business unless he is authorized or

directed by the court to do so, and such authority is not derived from an order of
appointment to take and preserve the property. It does not appear that the defendant as a
receiver was authorized by the court to continue the business of the partnership in
liquidation. This being so, he is personally liable for the losses that the business may have
sustained. The partnership must not, therefore, be liable for the acts of the defendant in
connection with the management of the business until August 3, 1918, the date when he
ceased to be a member and manager in order to become receiver.
DISSOLUTION AND WINDING UP
1. Antonio Goquiolay and the Partnership Tan Sin An v. Washington Sycip, et al

GR No.L-11840. July 26, 1960
Facts:
Tan Sin An and Antonio C. Goquiolay, entered into a general commercial partnership for the
purpose in dealing in real estate. The partnership had a capital of P30,000.00, P18,000.00
of which was contributed by Goquiolay and P12,000.00 by Tan Sin An.
They stipulated in the agreement that Tan Sin An shall be the sole managing and partner,
and Antonio C. Goquiolay as co-partner.
The lifetime of the partnership was fixed at ten (10) years and also that in the event of the
death of any of the partners at any time before the expiration of said term, the co-
partnership shall not be dissolved but will have to be continued and the deceased partner
shall be represented by his heirs or assigns in said co-partnership.
The partnership purchased 3 parcels of land in Davao, subject-matter of the instant

litigation, assuming the payment of a mortgage obligation, payable to "La Urbana
SociedadMutua de Construccion y Prestamos" for a period of ten (10) years.
Another 46 parcels were purchased by Tan Sin An in his individual capacity, assuming the
payment of a mortgage obligation payable to Yutivo and Co.
The two separate obligations were consolidated in an instrument executed by the

partnership and Tan Sin An, whereby the entire 49 lots were mortgaged in favor of the
"Banco Hipotecario de Filipinas" (as successor to "La Urbana").
Page 30 of 37
Tan Sin An died, leaving as surviving heirs his widow, Kong Chai Pin, and four minor
children where Defendant Kong Chai Pin was appointed administratrix of the intestate
estate of her deceased husband.
Repeated demands for payment were made by the Banco Hipotecario on the partnership
and on Tan Sin An. The defendant Sing Yee and Cuan, Co., Inc., upon request of defendant
Yutivo Sans Hardware Co., paid the remaining balance of the mortgage debt, and the
mortgage was cancelled.
Yutivo Sons Hardware Co. and Sing Yee and Cuan Co., Inc. filed their claims in the intestate
proceedings of Tan Sin An for P62,415.91 and P54,310.13, respectively, as alleged
obligations of the partnership "Tan Sin An and Antonio C. Goquiolay" and Tan Sin An, for
advances, interest and taxes paid in amortizing and discharging their obligations to "La
Urbana" and the "Banco Hipotecario".
Kong Chai Pin filed a petition with the probate court for authority to sell all the 49 parcels
of land to Washington Z, Sycip and Betty Y. Lee, for the purpose preliminary of settling the
aforesaid debts of Tan Sin An and the partnership. Pursuant to a court order, the
administratrix executed on April 4, 1949, a deed of sale of the 49 parcels of land to the
defendants Washington Sycip and Betty Lee in consideration of P37,000.00 and of vendees'
assuming payments of the claims filed by Yutivo Sons Hardware Co. and Sing Yee and Cuan
Co., Inc.
Later, in July, 1949, defendants Sycip and Betty Lee executed in favor of the Insular
Development Co., Inc. a deed of transfer covering the said 49 parcels of land.
After learning about the sale to Sycip the surviving partner Antonio Goquiolay filed a
petition in the intestate proceedings seeking to set aside the order of the probate court
approving the sale in so far as his interest over the parcels of land sold was concerned. The
probate court annulled the sale executed by the administratrix with respect to the 60%
interest of Antonio Goquiolay over the properties sold. Kong Chai Pin appealed to the Court
of Appeals, which court later certified the case to the SC.
SC rendered decision setting aside the orders of the probate court complained of and
remanding the case for new trial, due to the non-inclusion of indispensable parties.
Thereafter, new pleadings were filed.
The second amended complaint in the case at bar prays for the annulment of the sale in
favor of Washington Sycip and Betty Lee, and their subsequent conveyance in favor of
Page 31 of 37
Insular Development Co., Inc., in so far as the 3 lots owned by the plaintiff partnership are
concerned.
The complaint was dismissed by the lower court; hence, this appeal.
Issues:
1) Whether or not Kong Chai Pin, succeeded her husband, Tan Sin An, in the sole
management of the partnership, upon the latter's death?
2) Whether or not the consent of the other partners was necessary to perfect the sale
of the partnership properties to Washington Sycip and Betty Lee?
3) Whether or not the sale of the entire firm realty is valid?
Held:
1) Yes. The provision in the articles stating that "in the event of death of any one of the
partners within the 10-year term of the partnership, the deceased partner shall be
represented by his heirs", could not have referred to the managerial right given to
Tan Sin An; more appropriately, it related to the succession in the proprietary
interest of each partner.
Kong Chai Pin manifested her intent to be bound by the partnership agreement not
only as a limited but as a general partner. Thus, she managed and retained
possession of the partnership properties and was admittedly deriving income
therefrom up to and until the same were sold to Washington Sycip and Betty Lee. By
executing the deed of sale of the parcels of land in dispute in the name of the
partnership, she was acting no less than as a managing partner. Having thus
preferred to act as such, she could be held liable for the partnership debts and
liabilities as a general partner, beyond what she might have derived only from the
estate of her deceased husband. By allowing her to retain control of the firm's
property from 1942 to 1949, plaintiff estopped himself to deny her legal
representation of the partnership, with the power to bind it by the proper contracts.
2) No. Strangers dealing with a partnership have the right to assume, in the absence of
restrictive clauses in the co-partnership agreement, that every general partner has
power to bind the partnership, specially those partners acting with ostensible
authority.
The records fail to disclose that appellant Goquiolay made any opposition to the sale
of the partnership realty to Washington Z. Sycip and Betty Lee; on the contrary, it
appears that he (Goquiolay) only interposed his objections after the deed of
Page 32 of 37
conveyance was executed and approved by the probate court, and, consequently, his
opposition came too late to be effective.
3) Yes. Goquiolay questions the validity of the sale covering the entire firm realty, on
the ground that it, in effect, threw the partnership into dissolution, which requires
consent of all the partners. This view is untenable. That the partnership was left
without the real property it originally had will not work its dissolution, since the
firm was not organized to exploit these precise lots but to engage in buying and
selling real estate, and "in general real estate agency and brokerage business".
Incidentally, it is to be noted that the payment of the solidary obligation of both the
partnership and the late Tan Sin An, leaves open the question of accounting and
contribution between the co-debtors, that should be ventilated separately.
AGENCY
1. Angeles vs. PNR (Garcia, 2006)
Facts:
PNR accepted Gaudencios Romualdez offer to buy on an AS IS, WHERE IS basis PNRs
scrap/unserviceable rails located in Lubao, Pampanga for a total amount of P96,000.
Romualdez wrote a letter explicitly authorizing Lizette Angeles (deceased; was substituted
by the husband as Romualdez lawful representative in the withdrawal of the scrap
materials. The letter also contain that Lizette was given the Original Copy of the Award for
the above said purpose.
Lizette informed the PNR that the scrap materials was not ready for hauling and requested
that the PNR transfer the location. The PNR granted this request and allowed the
withdrawal of scrap materials in Tarlac. Later on, however, it suspended the withdrawal
for alleged documentary discrepancies and reports of pilferage.
The spouses demanded the return of the money they paid but PNR refused on the ground
that some scrap materials have already been withdrawn (worth P114,781.80). The
spouses filed a suit for specific performance against PNR. The trial court ruled that the
spouses are not real parties in interest. The CA affirmed the decision of the trial court.
Issue:
Whether or not Lizette was an assignee or a mere agent of Romualdez.
Held: Where agency exists, the rd partys liability on a contract is to the principal and not
to the agent. An agent, by himself, is not a real party in interest with regard to the contract.
The situation is different is the agent is the assignee. In such a case the agent may, in his
own behalf, sue on a contract made for his principal as an assignee of the contract. The rule
Page 33 of 37
requiring every action to be prosecuted in the name of the real party in interest recognizes
the assignment of rights of action and also recognizes that when one has a rights assigned
to him, he is then a real party in interest and may maintain an action upon such claim or
right.
The agent may also be called an attorney, proxy, delegate, or representative. The scrutiny
of the letter would reveal that Lizette was an agent and not an assignee.
Power of Attorney in the absence of statute, no form or method of execution is required.

It may be in any form clearly showing on its face the agents authority. It is an instrument
in writing by which a person, as principal, appoints another as his agent and confers upon
him the authority to perform certain special acts on behalf of the principal. The written
authorization itself is the power of attorney. Its primary purpose is not to define the
authority of the agent but to evidence the authority of the agent to third parties. Except as
may be required by statute, a power of attorney is valid even if it is not notarized. It is
strictly construed and pursued. The agent may not go beyond nor deviate from the power
of attorney.
2. URBAN BANK, INC, Petitioner, vs. MAGDALENO M. PEA, Respondent. G.R. No.
145817, October 19, 2011
FACTS:
Pea, a lawyer, was formerly a stockholder, director and corporate secretary of Isabel
Sugar Company, Inc. (ISCI). ISCI owned a parcel of land. ISCI leased the land. Without its
consent and in violation of the lease contract, the lessee subleased the land to several
tenants, who in turn put up nightclubs inside the compound. Before the expiration of the
lease contract, ISCI informed the lessee and his tenants that the lease would no longer be
renewed because the land will be sold.
ISCI and Urban Bank executed a Contract to Sell, and they agreed that the final installment
released by the bank upon ISCIs delivery of full and actual possession of the land, free from
any tenants.
ISCI then instructed Pea, to act as its agent and handle the eviction of the tenants. The
lessee left, but the unauthorized sub-tenants refused to leave. Pea had the gates of the
property closed and he also posted security guardsservices for which he advanced
payments. Despite the closure of the gates and the posting of the guards, the sub-tenants
would force open the gates, and proceed to carry on with their businesses.
Pea then filed a complaint with the RTC, which issued a TRO. At the time the complaint
was filed, a new title to the had already been issued in the name of Urban Bank.
When information reached the judge that the had already been transferred by ISCI to
Urban Bank, the trial court recalled the TRO and issued a break-open order for the
Page 34 of 37
property. Pea immediately contacted ISCIs presidentand told him that because of the
break-open order of the RTC, he (Pea) would be recalling the security guards he had
posted to secure the property. The President asked him to suspend the withdrawal of the
posted guards, so that ISCI could get in touch first with Urban Bank.
Pea also called Urban Banks President. The President allegedly assured him that the bank
was going to retain his services, and that the he should not give up possession of the
subject land.
Thereafter, Pea, in representation of Urban Bank, filed a separate complaint with the
RTC-Makati City, to enjoin the tenants from entering the Pasay property. Acting on Urban
Banks preliminary prayer, the RTC-Makati City issued a TRO.
While the 2nd complaint was pending, Pea made efforts to settle the issue of possession of
the with the sub-tenants. During the negotiations, he was exposed to several civil and
crimal cases and received several threats against his life. The sub-tenants eventually agreed
to stay off the property for a total consideration of PhP1.5M. Pea advanced the payment
for the full and final settlement of their claims against Urban Bank. Pea formally informed
Urban Bank that it could already take possession of the Pasay property. There was however
no mention of the compensation due and owed to him for the services he had rendered.
The bank subsequently took actual possession of the property and installed its own guards
at the premises.
Pea thereafter made several attempts to contact Urban Bank, but the bank officers would
not take any of his calls. Pea formally demanded from Urban Bank the payment of the
% compensation and attorneys fees allegedly promised to him during his telephone
conversation with Urban Banks President for securing and maintaining peaceful
possession of the property.
Urban Bank and individual bank officers and directors argued that it was ISCI, the original
owners of the Pasay property, that had engaged the services of Pea in securing the
premises; and, consequently, they could not be held liable for the expenses Pea had
incurred.
ISSUE: Whether or not Pena is entitled to payment for the services he rendered as agent of
Urban Bank.
HELD: Yes.
Pea should be paid for services rendered under the agency relationship that existed
between him and Urban Bank based on the civil law principle against unjust enrichment,
and not on the basis of the purported oral contract. Whether or not an agency has been
created is determined by the fact that one is representing and acting for another. The law
makes no presumption of agency; proving its existence, nature and extent is incumbent
upon the person alleging it.
Page 35 of 37
NOTE: This case is also under I. .c of our outline so Im including this : Agency is
presumed to be for compensation. Unless the contrary intent is shown, a person who acts
as an agent does so with the expectation of payment according to the agreement and to the
services rendered or results effected.
In this case theres no evidence that Urban Bank agreed to pay Pea a specific amount or
percentage of amount for his services, so the court applies the principle against unjust
enrichment and on the basis of quantum meruit. The agency of Pea comprised of services
ordinarily performed by a lawyer who is tasked with the job of ensuring clean possession
by the owner of a property. The court measured the amount Pena is entitled to for the
services he rendered (as opposed to the 10% compensation demanded by Pena).
3. Corazon Nevada vs. Atty. Rodolfo Casuga

In 2007, Corazon Nevada, filed a disbarment case against Atty. Rodolfo Casuga. Nevada
alleged the following:
1. That Atty. Casuga acquired several pieces of jewelry from her; the jewelries include
diamond earrings and diamond rings amounting P300,000.00. and a Rolex gold watch
worth $12,000.00; that Casuga assured her that he will sell them; but despite repeated
demands, Casuga never remitted any money nor did he return said jewelries.
2. That in 2006, Casuga, taking advantage of his close relationship with Nevada (they
belong to the same religious sect), Casuga represented himself as the hotel
administrator of the hotel (Mt. Crest) that Nevada own; that as such, Casuga was able to
enter into a contract of lease with one Jung Chul; that he negotiated an office space with
Chul in said Hotel for P90,000.00; that Casuga notarized said agreement; that he forged
the signature of Edwin Nevada (husband); that he never remitted the P90k to Nevada.
In his defense, Casuga said:
1. That Nevada actually pawned said jewelries in a pawnshop; that she later advised
Casugas wife to redeem said jewelries using Mrs. Casugas wife; that Casuga can sell
said jewelries and reimburse herself from the proceeds; that he still has possession of
said jewelries.
2. That he never received the P90,000.00; that it was received by a certain Pastor Oh; that
he was authorized as an agent by Edwin Nevada to enter into said contract of lease.
ISSUE: Whether or not there is merit in Atty. Casugas defense.

HELD: No. Atty. Casuga is in violation of the following:
Casuga misrepresented himself as a duly authorized representative of Nevada when in fact
he was not. He never adduced evidence showing that he was duly authorized either by
Page 36 of 37
Edwin or Corazon. He also dialed to adduce evidence proving that he never received the
P90k from Chul. On the contrary, a notarized letter showed that Casuga did receive the
money. His misrepresentations constitute gross misconduct and his mere denial does not
overcome the evidence presented against him.
Page 37 of 37

Pat 2c Enriquez

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Pat 2c Enriquez

Uploaded by

Copyright:

Available Formats

ENRIQUEZ, Darla Claire T.

Partnership, Agency, and Trust

1. Fernando Santos v. Sps. Arsenio and Nieves Reyes (establishment of partnership)

In July 1986, Nieves introduced Gragera, chairman of Monte Maria Development

Issue: Whether or not respondents were employees or partners of petitioner?

Held: They were partners.

2. Sevilla v. Court of Appeals (principal-agent relationship v. partnership)

Hence this petition,

Issue: What is the relationship between Sevilla and TWS?

Held: Principal- Agent relationship

Service, Inc. As compensation, she received 4% of the proceeds in the concept of

3. EligioEstanislao, Jr v. Court of Appeals, Remedios Estanislao, Emilio and Leocadio

Issue: W/N there was a partnership formed?

Petitioner submitted to private respondents periodic accounting of the business. Petitioner

Judgment appealed from is AFFIRMED in toto.

Issue: WON private respondent is a partner of petitioner in establishing the restaurant

Issue: Whether or not respondents were entitled to the partnership profits?

Held: Yes, the respondents were entitled to the partnership profits.

The parties relationship is of a partnership.The partnership between petitioner, Nieves

6. Sunga-Chan v. Chua (juridical personality of a partnership)

7. Palting v. San Jose Petroleum Incorporated (foreign corporation; reciprocal rights

ISSUE:Whether or not respondent SAN JOSE PETROLEUM, an American business

Wherefore, let judgment be entered:

The appellant makes the following assignment of error:

It is nowhere stated in Exhibit A that the parties were establishing a partnership or

9. Magalona v. Pesayco (oral partnership) GR No.L-39607. February 6, 1934

It was found that before April , , Pesayco sold , semillas de bagus

10. Agad v. Mabato (partnership contract in a public instrument; lack of inventory)

Article 1771 states that:

Art. . A contract of partnership is void, whenever immovable property is contributed

One partner of the association can be considered as an agent without an agreement,

2. Leopoldo Criado v. Gutierrez Hermanos (independent, private act of a partner not

3. Jose Garrido v. Agustin Asencio (partners books of account)

4. Dan Fue Leung v. Hon. Intermediate Appellate Court (right to demand an

OBLIGATIONS OF THE PARTNERS WITH REGARD TO THIRD PERSONS

1. Sharruf& Co v. Baloise Fire Insurance (change of name of the partnership)

2. Island Sales, Inc v. United Pioneers General Construction Company, et al (pro-rata

No. Article 1816 of the Civil Code provides:

Issue: WON the partnership should bear the losses incurred.

A receiver has no right to carry on and conduct a business unless he is authorized or

DISSOLUTION AND WINDING UP

1. Antonio Goquiolay and the Partnership Tan Sin An v. Washington Sycip, et al

The partnership purchased 3 parcels of land in Davao, subject-matter of the instant

The two separate obligations were consolidated in an instrument executed by the

Power of Attorney in the absence of statute, no form or method of execution is required.

3. Corazon Nevada vs. Atty. Rodolfo Casuga

In his defense, Casuga said:

ISSUE: Whether or not there is merit in Atty. Casugas defense.

You might also like