Partnership
Dan Fue Leung v. Intermediate Appellate Court and Leung You, G.R. No. 70926, January 31, 1989
FACTS:
About the time the Sun Wah Panciteria started to become operational, the private respondent
gave P4,000 as his contribution to the partnership. So Sia further testified that he himself received from
the petitioner a similar receipt evidencing delivery of his own investment in another amount of P4,000.
Furthermore, the private respondent received from the petitioner the amount of P12,000
covered by the latter's Equitable Banking Corporation Check No. 13389470-B from the profits of the
operation of the restaurant for the year 1974.
The petitioner denied having received from the private respondent the amount of P4,000.00. He
contested and impugned the genuineness of the receipt.
Both the trial court and the appellate court found that the private respondent is a partner of the
petitioner in the setting up and operations of the panciteria. While the dispositive portions merely
ordered the payment of the respondents share, there is no question from the factual findings that the
respondent invested in the business as a partner. Hence, the two courts declared that the private
petitioner is entitled to a share of the annual profits of the restaurant. The petitioner, however, claims
that this factual finding is erroneous. Thus, the petitioner argues: "The complaint avers that private
respondent extended 'financial assistance' to herein petitioner at the time of the establishment of the
Sun Wah Panciteria, in return of which private respondent allegedly will receive a share in the profits of
the restaurant. The same complaint did not claim that private respondent is a partner of the business. It
was, therefore, a serious error for the lower court and the Hon. Intermediate Appellate Court to grant a
relief not called for by the complaint. It was also error for the Hon. Intermediate Appellate Court to
interpret or construe 'financial assistance' to mean the contribution of capital by a partner to a
partnership".
ISSUE:
Whether there exists a partnership
RULING:
YES. In essence, the private respondent alleged that when Sun Wah Panciteria was established,
he gave P4,000 to the petitioner with the understanding that he would be entitled to twenty-two
percent (22%) of the annual profit derived from the operation of the said panciteria. These allegations,
which were proved, make the private respondent and the petitioner partners in the establishment of Sun
Wah Panciteria because Article 1767 of the Civil Code provides that "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".
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