NOEL D. BAUTISTA
JD IV-A
COMMERCIAL LAW REVIEW
PARTNERSHIP CASES
Tocao v. Court of Appeals
G.R. No. 127405, October 4, 2000
FACTS:
Private respondent Nenita A. Anay met petitioner William T. Belo, then the vice-president for
operations of Ultra Clean Water Purifier, through her former employer in Bangkok. Belo introduced Anay
to petitioner Marjorie Tocao, who conveyed her desire to enter into a joint venture with her for the
importation and local distribution of kitchen cookware. Under the joint venture, Belo acted as capitalist,
Tocao as president and general manager, and Anay as head of the marketing department and later, vicepresident for sales. The parties agreed that Belo's name should not appear in any documents relating to
their transactions with West Bend Company. Anay having secured the distributorship of cookware
products from the West Bend Company and organized the administrative staff and the sales force, the
cookware business took off successfully. They operated under the name of Geminesse Enterprise, a sole
proprietorship registered in Marjorie Tocao's name.
The parties agreed further that Anay would be entitled to:
(1) ten percent (10%) of the annual net profits of the business;
(2) overriding commission of six percent (6%) of the overall weekly production;
(3) thirty percent (30%) of the sales she would make; and
(4) two percent (2%) for her demonstration services. The agreement was not reduced to writing on the
strength of Belo's assurances that he was sincere, dependable and honest when it came to financial
commitments.
On October 9, 1987, Anay learned that Marjorie Tocao had signed a letter addressed to the Cubao sales
office to the effect that she was no longer the vice-president of Geminesse Enterprise. Anay attempted to
contact Belo. She wrote him twice to demand her overriding commission for the period of January 8, 1988
to February 5, 1988 and the audit of the company to determine her share in the net profits. Anay still
received her five percent (5%) overriding commission up to December 1987. The following year, 1988, she
did not receive the same commission although the company netted a gross sales of P 13,300,360.00. On
April 5, 1988, Nenita A. Anay filed Civil Case No. 88-509, a complaint for sum of money with
damages against Marjorie D. Tocao and William Belo before the Regional Trial Court of Makati, Branch
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The trial court held that there was indeed an "oral partnership agreement between the plaintiff and the
defendants. The Court of Appeals affirmed the lower court’s decision.
ISSUE:
Whether the parties formed a partnership
HELD:
Yes, the parties involved in this case formed a partnership.
The Supreme Court held that to be considered a juridical personality, a partnership must fulfill these
requisites: (1) two or more persons bind themselves to contribute money, property or industry to a
common fund; and (2) intention on the part of the partners to divide the profits among themselves. It
may be constituted in any form; a public instrument is necessary only where immovable property or real
rights are contributed thereto. This implies that since a contract of partnership is consensual, an oral
contract of partnership is as good as a written one.
In the case at hand, Belo acted as capitalist while Tocao as president and general manager, and
Anay as head of the marketing department and later, vice-president for sales. Furthermore, Anay was
entitled to a percentage of the net profits of the business. Therefore, the parties formed a partnership.
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Guy v. Gacott
G.R. No. 206147, January 13, 2016
FACTS:
Atty. Gacott from Palawan purchased two (2) brand new transreceivers from Quantech Systems
Corporation (QSC) in Manila through its employee Rey Medestomas. After some time, he returned it due
to major defects. But time passed, he was not able to get the replacement units and he was informed that
there were no available units, and he cannot refund the purchase price. He filed a complaint for damages.
But during execution, he learned that QSC was not a corporation but, a general partnership with Mr. Guy
as a partner and its general manager.
Because of that, Gacott instructed the sheriff to proceed with the attachment of one of the motor
vehicles of Guy. After that, Guy filed a Motion to lift Attachment Upon Personalty arguing that he was not
a judgment debtor and, therefore, his vehicle could not be attached but it has been denied by the RTC
and CA stating that he is solidarily liable to the liability of the partnership since he is the general manager.
ISSUE:
Whether or not Guy is solidarily liable with the partnership for damages arising from the breach
of contract of sale with Gacott.
HELD:
The Supreme Court stated that a partner must be separately and distinctly impleaded before he
can be bound by a judgment. It is not conclusive that a suit against a partnership will also be a suit
impleading each partner unless it was shown that the legal fiction of a different juridical personality was
being used for fraudulent, unfair, or illegal purposes. Since a partnership has a separate legal personality
from the partners, the partners' obligation with respect to partnership liabilities is joint and subsidiary in
nature which means all partners shall be liable pro rata with all their property and partners shall only be
liable with their property after the partnership assets have been exhausted.
Therefore, since Guy did not act maliciously, he and his personal properties cannot be made
directly and solely accountable for the liability of QSC and that he was not the judgment debtor in the
case before the RTC, with that, his levied vehicle was released.
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Saludo Jr. v. Philippine National Bank
G.R. No. 193138, August 20, 2018
FACTS:
On June 11, 1998, Saludo Agpalo Fernandez and Aquino Law Office entered into a Contract of
Lease with PNB, whereby the latter agreed to lease 632 square meters of the second floor of the PNB
Financial Center Building in Quezon City for a period of three years and for a monthly rental fee of
P189,600.00. The rental fee is subject to a yearly escalation rate of 10%. SAFA Law Office then occupied
the leased premises and paid advance rental fees and security deposit in the total amount of
P1,137,600.00.
On August 1, 2001, the Contract of Lease expired. According to PNB, SAFA Law Office continued
to occupy the leased premises until February 2005 but discontinued paying its monthly rental obligations
after December 2002. PNB sent a demand letter dated July 7, 2005, requiring the firm to pay its rental
arrears in the total amount of P10,951,948.32 and made a final demand for SAFA Law Office to pay its
outstanding rental obligations in the amount of P25,587,838.09.
Saludo, in his capacity as managing partner of SAFA Law Office, filed an amended complaint for
accounting and/or recomputation of unpaid rentals and damages against PNB in relation to the Contract
of Lease. PNB filed a motion to include an indispensable party as plaintiff, praying that Saludo be ordered
to amend anew his complaint to include SAFA Law Office as principal plaintiff. PNB argued that the lessee
in the Contract of Lease is not Saludo but SAFA Law Office, and that Saludo merely signed the Contract of
Lease as the managing partner of the law firm. Thus, SAFA Law Office must be joined as a plaintiff in the
complaint because it is considered an indispensable party under Section 7, Rule 3 of the Rules of Court.
RTC issued an Omnibus Order denying PNB's motion to include an indispensable party as plaintiff and
granting Saludo's motion to dismiss counterclaim. However, CA ruled that PNB's counterclaims against
SAFA Law Office should not be dismissed. While SAFA Law Office is not a legal entity, it can still be sued
under Section 15, Rule 3 of the Rules of Court considering that it entered into the Contract of Lease with
PNB.
ISSUES:
Whether SAFA Law Office is a partnership and has a separate and distinct juridical personality
HELD:
SAFA Law Office was constituted as a partnership at the time its partners signed the Articles of
Partnership wherein they bound themselves to establish a partnership for the practice of law, contribute
capital and industry for the purpose, and receive compensation and benefits in the course of its operation.
The opening paragraph of the Articles of Partnership reveals the unequivocal intention of its signatories
to form a partnership. The subsequent registration of the Articles of Partnership with the SEC, on the
other hand, was made in compliance with Article 1772 of the Civil Code, since the initial capital of the
partnership was P500,000.00.
Having settled that SAFA Law Office is a partnership, we hold that it acquired juridical personality
by operation of law. Our law on partnership does not exclude partnerships for the practice of law from its
coverage. Article 1767 of the Civil Code provides that "[t]wo or more persons may also form a partnership
for the exercise of a profession." Article 1783, on the other hand, states that "[a] particular partnership
has for its object determinate things, their use or fruits, or a specific undertaking, or the exercise of a
profession or vocation." Since the law uses the word "profession" in the general sense and does not
distinguish which professional partnerships are covered by its provisions and which are not, then no valid
distinction may be made.
Considering that SAFA Law Office is primarily liable under the contract of lease, it is the real partyin-interest that should be joined as plaintiff in the RTC case. Petition DENIED. Saludo, Jr. is hereby ordered
to amend his complaint to include SAFA Law Office as plaintiff being the real party-in- interest.
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Primelink Properties and Development Corporation v. Lazatin-Magat
G.R. No. 167379, June 27, 2006
FACTS:
Primelink is a domestic corporation engaged in real estate development while respondents
Lazatin are co-owners of 2 parcels of land in Tagaytay. In 1994, Primelink, represented by Lopez (President)
and the Lazatins entered into a joint venture agreement (JVA) for the development of the subject property
into a residential subdivision
Under the JVA, the Lazatins obliged themselves to contribute the subject property as their share
and for its part, Primelink undertook to contribute, money, labor personnel, machineries, equipment, etc
For 4 years however, Primelink failed to develop the said land. As such, the Lazatins filed a
complaint to rescind the JVA
The trial court ruled in favor of the Lazatins and ordered Primelink to return the possession of the
property without the Lazatins paying for said improvements. On appeal, CA affirmed the same.
Primelink assailed the order that turning over improvements to the Lazatins without
reimbursement is unjust; that Lazatin did not ask the properties to be placed under their possession but
merely asked for rescission of the JVA
ISSUE:
Whether the improvements made by Primelink should also be turned over under the possession
of respondent Lazatin
HELD:
Yes. The order of the court for Primelink to return possession of the real estate property belonging
to Lazatin including all improvements thereon was not a judgment that was different in kind that what
was prayed for by the Lazatins; it was just a necessary consequence to the order of rescission.
As a general rule, the relation of the parties in joint ventures is government by their agreement. When
the agreement is silent on any particular issue, the general principles of partnership may be resorted to.
The legal concept of a joint venture is of common law origin. It has generally been understood to mean
an organization formed for some temporary purpose. It is, in fact, hardly distinguishable from partnership
since elements are similar—community of interest in the business, sharing of profits and losses, and a
mutual right of control. The main distinction is that partnership contemplates a general business with
some degree of continuity, while a joint venture is formed for the execution of a single transaction and is
thus of a temporary nature.
With the rescission of the JVA on account of petitioner’s fraudulent acts, all authority of any partner to
act for the partnership is terminated except insofar as may be necessary to wind up the partnership affairs
or to complete transactions begun but not yet finished. On dissolution, the partnership is not terminated
but continues until the winding up of partnership affairs is completed. Winding up means the
administration of the assets of the partnership for the purpose of terminating the partnership and
discharging the obligations of the partnership.
It must be stressed that although respondents acquired possession of the lands and the improvements
thereon, the said lands and improvements remained partnership property, subject to the rights and
obligations of the parties under Art 1837 and 1838 NCC, and subject to the outcome of the settlement of
the accounts between the parties as provided in Art 1839, absent any agreement of the parties in their
JVA to the contrary. Until the partnership accounts are determined, it cannot be ascertained how much
any of the parties is entitled, if at all.
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Realubit v. Jaso
G.R. No. 178782, September 21, 2011
FACTS:
In 1994, Josefina Realubit (Josefina) entered into joint venture agreement with Francis Eric
Amaury Biondo (Biondo) for the operation of an ice manufacturing business; Josefina is the industrial
partner while Biondo as the capitalist partner. In 1997, Biondo transferred all his rights and interest in
favor of Eden Jaso (Eden) as evidenced in the Deed of Assignment. The spouses Jaso demanded from
Josefina an accounting and inventory of the partnership as well as the remittances of the portion of their
profits. Jaso filed an action for specific performance, accounting, examination, audit and inventory of
assets and properties due to Josefina’s failure to comply with the first demand.
The RTC ruled in favor of the spouses Jaso, CA reversed the decision averring that absent showing
of Josefina's knowledge and consent to the transfer of Biondo's share, Eden cannot be considered as a
partner in the business and that while Eden is entitled to the rights of Biondo in the share of the profit of
the partnership, the former cannot interfere with the management of the partnership, require
information or account of its transactions and inspect its books and that the partnership should first be
dissolved before Eden can seek an accounting of the transactions and demand Biondo’s share.
ISSUE:
Whether the assignment of right made Eden a partner and corollary, whether the spouses Jaso
has the right to order Josefina to render an accounting of the business.
HELD:
Art. 1813. A conveyance by a partner of his whole interest in the partnership does not itself
dissolve the partnership, or, as against the other partners in the absence of agreement, entitle the
assignee, during the continuance of the partnership, to interfere in the management or administration of
the partnership business or affairs, or to require any information or account of partnership transactions,
or to inspect the partnership books; but it merely entitles the assignee to receive in accordance with his
contracts the profits to which the assigning partners would otherwise be entitled. However, in case of
fraud in the management of the partnership, the assignee may avail himself of the usual remedies. In the
case of a dissolution of the partnership, the assignee is entitled to receive his assignor's interest and may
require an account from the date only of the last account agreed to by all the partners.
From the foregoing provision, it is evident that "(t)he transfers by a partner of his partnership
interest does not make the assignee of such interest a partner of the firm, nor entitle the assignee to
interfere in the management of the partnership business or to receive anything except the assignee's
profits. The assignment does not purport to transfer an interest in the partnership, but only a future
contingent right to a portion of the ultimate residue as the assignor may become entitled to receive by
virtue of his proportionate interest in the capital."
Although Eden did not, moreover, become a partner as a consequence of the assignment and/or
acquire the right to require an accounting of the partnership business, the CA correctly granted her prayer
for dissolution of the joint venture conformably with the right granted to the purchaser of a partner's
interest under Article 1831 of the Civil Code.
Generally understood to mean an organization formed for some temporary purpose, a joint
venture is likened to a particular partnership or one which "has for its object determinate things, their use
or fruits, or a specific undertaking, or the exercise of a profession or vocation." The rule is settled that
joint ventures are governed by the law on partnerships which are, in turn, based on mutual agency or
delectus personae.
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Marsman Drysdale Land, Inc. v. Philippine Geoanalytics, Inc.
G.R. No. 183376, June 29, 2010
FACTS:
Marsman Drysdale, Inc. (Marsman) and Gotesco Properties, Inc. (Gotesco) entered into a joint
venture agreement for the construction and development of an office building on a land owned by
Marsman. They agreed on a 50-50 ratio on the proceeds of the project but did not agree on how losses
would be divided. The joint venture engaged the services of Philippine Geoanalytics, Inc. (PGI) to provide
subsurface soil exploration, seismic study and geotechnical engineering. PGI completed its seismic study
but failed to complete its subsurface soil exploration because the area where drilling was to be made had
not been cleared. The building project was subsequently shelved due to unfavorable economic conditions.
PGI billed the joint venture for work done but was not paid despite its repeated demands. PGI, thus, filed
a collection case against Marsman and Gotesco.
Marsman passed the obligation to Gotesco because under the joint venture agreement, Gotesco
was solely liable for the monetary expenses of the project, and Marsman’s participation was limited to
the land. Gotesco, on the other hand, asserted that PGI had no cause of action against it as PGI had yet to
complete the services in its contract, and it was Marsman’s failure to clear the property of debris which
prevented PGI from completing its work.
ISSUE:
Who between Marsman and Gotesco was liable to pay PGI its unpaid claims?
HELD:
Marsman and Gotesco are jointly liable to PGI. PGI was never a party to the joint venture
agreement. While the joint venture agreement clearly spelled out the capital contributions of Marsman
(land) and Gotesco (cash) and the funding mechanism, it cannot be used to defeat the lawful claim of PGI
against the two joint venturers’ partners. PGI’s contract clearly listed the joint venturers Marsman and
Gotesco as the beneficial owner of the project, and all billing invoices indicated the consortium as the
client.
When there are two or more debtors, the obligation is presumed to be joint unless the law or the
obligation expressly states that the liability is solidary, or unless the nature of the obligation requires
solidary liability (Articles 1207 and 1208, Civil Code). In this case, since solidary liability was not required
by law, or the contract, or by the nature of the obligation, the obligation to PGI was presumed to be joint
between Marsman and Gotesco.
A joint venture being a form of partnership, it is to be governed by the laws on partnership. Under
the laws on partnership, particularly Article 1797 of the Civil Code, the losses and profits shall be
distributed in accordance with the agreement; if only the share of each partner in the profits has been
agreed upon, the share of each in the losses shall be in the same proportion. In the joint venture
agreement, Marsman and Gotesco agreed on a 50-50 ratio on the proceeds of the project but did not
provide for the splitting of losses. Applying Article 1797, the same ratio applies in splitting the obligationloss of the joint venture to PGI.
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