Tocao vs. CA and Nenita Anay 365 SCRA 463 G.

R
127405 October 4, 2000

partners to have the power although not

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

Facts: Respondent met the petitioner through

Belo.Petitioner Tacao conveyed her desire to enter
into a joint venture with her and Anay
Anay is to be the marketing head of local
distribution of kitchen wares, the former to
finance the business. Anay was made to receive
commissions based on her performance, as
verbally agreed upon by her and Belo, the latter
acting as the guarantor of Geminesse enterprise.
In 1887, Belo signed a memorandum granting
37% commission to Anay for her business
transaction. Two days after, Anay discovered that
she was in effect no longer the head of marketing
and had been barred from holding office.
Issue: Whether or not Anay was an employee or
partner of Tocao and thus entitled to damages.
Ruling: The RTC and CA found the partnership
between petitioners and private respondent exists
based on the facts presented. This amount be
determined by S.C
To be considered as a judicial personality, a
partnership must fulfill these requisites: 1) two or
more persons bind themselves to contribute
money, property or industry to a common fund;
(2) intention on the part of the partners to divide
profits among themes selves.
Where no immovable le property in involved, an
oral agreement will suffice to create partnership.
Thus, a subject he to action for damages because
by the mutual agency that arises in a partnership,
the doctrine of delectus personae allows the

ROJAS VS. MAGLANA

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

the expiration of the period, with or without justifiable cause. Of course, if the
cause is not justified or no cause was given,the withdrawing partner is liable
for damages but in no case can he becompelled to remain in the firm. With
his withdrawal, the number of members is decreased, hence, the dissolution.
And in whatever way he mayview the situation, the conclusion is inevitable
that Rojas and Maglana shallbe guided in the liquidation of the partnership
by the provisions of its dulyregistered Articles of Co-Partnership; that is, all
profits and losses of thepartnership shall be divided "share and share
alike" between the partners

ROJAS VS. MAGLANA

FACTS: Maglana and Rojas executed their Articles

of Co-partnership called Eastcoast Development
Enterprises(EDE) which had an indefinite term
of existence and was registered with the SEC and
had a Timber License.
One of the EDEs purposes was to apply or secure
timber and/or private forest lands and to operate,
develop and promote such forests rights and
concessions.
M shall manage the business affairs while R shall be
the logging superintendent.
All profits and losses shall be divided share and
share alike between them.
Later on, the two availed the services of
Pahamotangas industrial partner and executed
another articles of co-partnership with the latter.
The purpose of this second partnership was to
hold and secure renewal of timber license and the
term of which was fixed to30 years.
Still later on, the three executed a conditional sale
of interest in the partnership wherein M and
R shall purchase the interest, share and
participation in the partnership of P.
It was also agreed that after payment of such
including amount of loan secured by P in favor of

the partnership, the two shall become owners of

all equipment contributed by P.
After this, the two continued the partnership
without any written agreement or reconstitution of
their articles of partnership.
Subsequently, R entered into a management
contract with CMS Estate Inc.
M wrote him re: his contribution to the capital
investments as well as his duties as logging
superintendent.
R replied that he will not be able to comply with
both.
M then told R that the latters share will just be
20% of the net profits. Such was the sharing from
1957 to 1959without complaint or dispute.
R took funds from the partnership more than his
contribution. M notified R that he dissolved the
partnership. R filed an action against M for the
recovery of properties and accounting of the
partnership and damages.
CFI: the partnership of M and R is after P retired is
one of de facto and at will; the sharing of profits
and losses is on the basis of actual contributions;
there is no evidence these properties were
acquired by the partnership funds thus it should
not belong to it; neither is entitled to damages;
the letter of M in effect dissolved the partnership;
sale of forest concession is valid and binding and should
be considered as Ms contribution; R must pay or
turnover to the partnership the profits he received
from CMS and pay his personal account to the
partnership;M must be paid 85k which he
shouldve received but was not paid to him and
must be considered as his contribution.

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

ISSUE: what is the nature of the partnership and

legal relationship of M-R after P retired from the
second partnership? May M unilaterally dissolve
the partnership?
SC: There was no intention to dissolve the first
partnership upon the constitution of the second as
everything else was the same except for the fact
that they took in an industrial partner: they
pursued the same purposes, the capital
contributions call for the same amounts, all
subsequent renewals of Timber License were
secured in favor of the first partnership, all
businesses were carried out under the registered
articles.
M and R agreed to purchase the interest, share
and participation of P and after, they became
owners of the equipment contributed by P. Both
considered themselves as partners as per their
letters.
It is not a partnership de facto or at will as it was
existing and duly registered. The letter of
M dissolving the partnership is in effect a notice
of withdrawal and may be done by expressly
withdrawing even before expiration of the period
with or without justifiable cause.
As to the liquidation of the partnership it shall be
divided share and share alike after an accounting has
been made. R is not entitled to any profits as he
failed to give the amount he had undertaken to
contribute thus, had become a debtor of the
partnership.
M cannot be liable for damages as R abandoned
the partnership thru his acts and also took funds
in an amount more than his contribution.

real estate development.

Rafaelito W. Lopez is its President and Chief
Executive Officer.Ma. Clara T. Lazatin-Magat and
her brothers, are co-owners of two (2) adjoining
parcels of land located in Tagaytay City.
On March 10, 1994, the Lazatins and
Primelink, represented
by Lopez, in hiscapacity as President, entered into
a Joint Venture for the development of the
aforementioned property into a residential
subdivision to be
known as "Tagaytay Garden Villas."
Under the JVA, the Lazatin siblings obliged
themselves to contribute the two parcels of land
as their share in the joint venture.
For its part, Primelink undertook to contribute mo
ney, labor, personnel,machineries, equipment, co
ntractors pool, marketing activities, manageriale
xpertise and other needed resources to develop
the property and construct therein the units for
sale to the public.
In a Letter dated April 10, 1997, the Lazatins, through

against it to protect their rights and interests.

This impelled the officers of Primelink to meet with

FACTS: Primelink Properties and Development

Corporation is a domestic corporation engaged in

counsel, demanded that

Primelink comply with its obligations under the JVA, ot
herwise the appropriate action would be filed

the Lazatins and enabled the latter to

reviewits business records/papers.
In another Letter14 dated October 22, 1997, theLazat

ins informed Primelink that they had decided to

rescind the JVA effective upon its receipt of the

said letter.
The Lazatins demanded that Primelink cease and
desist from further developing the property.
Trial court rendered a decision rescinding the
Joint Venture Agreement executed between the
plaintiffs and the defendants; immediately
restoring to the plaintiffs possession of the
subject parcels of land; ordering the defendants
to render an accounting of all income generated
as well as expenses incurred and disbursement
made in connection with the project. CA affirmed
trial courts decision ruling that,under Philippine
law, a joint venture is a form of partnership and is
to be governedby the laws of partnership.
ISSUE: WON trial court erred in rescinding the JVA
between the parties
HELD:SC affirmed appellate courts decision.
Ratio Decidendi: As a general rule, the relation of the

parties in joint ventures

isgoverned by their agreement.
When the agreement is silent on any particular ISSUE,
the general principles of partnership may be

resorted to. The legal concept of a joint venture is

of common law origin. It has no precise legal
definition, but it has been generally understood to
mean an organization formed for some
temporarypurpose.
It is, in fact, hardly distinguishable from the
partnership, since elements are similar
community of interest in the business, sharing of
profits and losses, and a mutual right of control.
The main distinction cited by most opinions in
common law jurisdictions is that the partnership
contemplates a general business with some

degree of continuity, while the joint venture is

formed for the execution of a single transaction,
and is thus of a temporary nature.
This observation is not entirely accurate in this
jurisdiction, since under the Civil Code, a
partnership maybe particular or universal, and a
particular partnership may have for its object as
pecific undertaking. It would seem
therefore that, under Philippine law, a joint
venture is a form of partnership
and should thus be governed
by the laws of partnership.
The Supreme Court has, however, recognized a
distinction between these two business forms,
and has HELD that although a corporation cannot
enter into a partnership contract, it may, however,

engage in a joint venture with others.

When the RTC rescinded the JVA on complaint of respo
ndents based on the evidence on record that
petitioners willfully and persistently committed a

breachof the JVA, the court thereby dissolved/can

celled the partnership.
With therescission of the JVA on account of
petitioners fraudulent acts, all authority of any
partner to act for the partnership is terminated
except so far as may be necessary to wind up the
partnership affairs or to complete transactions
begun but not yet finished.
On dissolution, the partnership is not terminated
but continues until
thewinding up of partnership affairs is completed.
56 Winding up means theadministration of the
assets of the partnership for the purpose of
terminating the business and discharging the
obligations of the partnership

under his employment contract with the old

partnership as against the new partnership

Benjamin Yu v. National Labor Relations

Commission & Jade Mountain ProductsCo. Ltd.,
Willy Co, Rhodora Bendal, Lea Bendal, Chiu Shian
Jeng and Chen Ho-Fu

Facts: Yu ex-Assistant General Manager of the

marble quarrying and export business operatedby
a registered partnership called Jade Mountain
Products Co. Ltd.
partnership was originally organized with Bendals
as general partners and Chin Shian Jeng,Chen HoFu and Yu Chang as limited partners; partnership
business consisted of exploiting a marble deposit
in Bulacan

Yu, as Assistant General Manager, had a monthly

salary of 4000. Yu, however, actually
received only half of his stipulated salary, since
he had accepted the promise of the partners that the
balance would be paid when the firm shall have
secured additional operating funds from abroad. Yu
actually managed the operations and finances of
thebusiness; he had overall supervision of the workers
at the marble quarry in Bulacan andtook charge of the
preparation of papers relating to the exportation of the
firms products.
general partners Bendals sold and transferred their
interests in the partnership to Co andEmmanuel
Zapanta
partnership was constituted solely by Co and Zapanta;
it continued to use the old firmname of Jade Mountain

Yu dismissed by the new partners

Issues:1. WON thepartnership which had hired Yu as As

st. Gen. Manager had been extinguished and replaced
by a new partnership composed of Co and Zapanta;
2. if indeed a new partnership had come into
existence, WON Yu could nonetheless assert his rights

Held: 1. Yes. Changes in the membership of the

partnership resulted in the dissolution of the old
partnership which had hired Yu and the emergence of
a new partnership composedof Co and Zapanta.
Legalbases:Art. 1828. The dissolution of a partnership i
s the change in the
relation of thepartners caused by any partner ceasing t
o be associated in the carrying on asdistinguished
from the winding up of the business.
Art. 1830. Dissolution is caused:(1) without violation
of the agreement between the partners;(b) by the
express will of any partner, who must act in good faith,
when no definite termor particular undertaking
is specified;(2) in contravention of the agreement
between the partners, where the circumstances donot
permit a dissolution under any other provision of this
article, by the express will of anypartner at any time;
No winding up of affairs in this case as contemplated
in Art. 1829: on dissolution the partnership is not
terminated, but continues until the winding up of
partnership affairs is completed
the new partnership simply took over the business ent
erprise owned by the oldpartnership, and continued us
ing the old name of Jade Mountain Products CompanyLi
mited, without winding up the business affairs of the
old partnership, paying off its debts, liquidating and
distributing its net assets, and then re-assembling the
said assets or most of them and opening a new
business enterprise
2. Yes. the new partnership is liable for the debts of the
old partnership
Legal basis: Art. 1840 (see codal)

Yu is entitled to enforce his claim for unpaid salaries,

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

The new partnership had its own new General

Manager, Co, the principal new owner himself. Yus old
position thus became superfluous or redundant.
Yu is entitled to separation pay at the rate of one
months pay for each year of service thathe had
rendered to the old partnership, a fraction of at least
6 months being considered asa whole year.

DOMINGO BEARNEZA, plaintiff-appelle,vs. BALBINO

DEQUILLA,defendant-appellant

Facts: In the year 1903, Balbino Dequilla, the

herein defendant, and Perpetua Bearneza formed
a partnership for the purpose of exploiting a fish
pond
Perpetua obligating herself to contribute to the
payment of the expenses of the business, which
obligation she made good
both agreeing to divide the profits between
themselves, which they had been doing until the
death of the said Perpetua in the year 1912

The deceased left a will in one of the clauses of which

she appointed Domingo Bearnez, the herein plaintiff,
as her heir to succeed to all her rights and interests in
the fish pond in questionDomingo Bearnez then instituted an action to recover
a part of the fish pond belonging to the decedent,
including of the profits received by the defendant
from the years 1913-1919

The defendant alleges that "the formation of the

supposed partnership between the plaintiff and
the defendant for the exploitation of the aforesaid
fish pond was not carried into effect, on account
of the plaintiff having refused to defray the
expenses of reconstruction and exploitation of
said fishpond." and further averred that the right
of the plaintiff had already prescribed
Judgment was then rendered declaring the plaintiff
owner of one-half of the fish pond but withoutmay
awarding him any damages
From this judgment the defendant appealsIssue/Held:
ISSUE:W/N the plaintiff has any right to maintain an
action for recovery of the said one-half of the fishpond
/ NONE
Ratio: The partnership formed was a particular
partnership, it having had for its subject-matter a
specified thing, the exploitation of the aforementioned
fish pond
Although, as the trial court says in its decision, the
defendant, in his letters to Perpetua or herhusband,
makes reference to the fish pond, calling it "our," or
"your fish pond," this reference cannot be held to
include the land on which the said fish pond was builtIt has not been proven that Bearneza participated
in the ownership of the said land
Therefore, the land on which the fish pond was
constructed did not constitute part of the subjectmatter of the partnership

This partnership was dissolved by the death of

Perpetua Bearneza
Neither can it be maintained that the partnership
continued to exist after the death of Perpetua,
inasmuch as it does not appear that any stipulation to
that effect has ever been made by her and
the defendant(NO STIPULATION!)
The partnership having been dissolved by the death of
Perpetua Bearneza, its subsequent legal status was
that of a partnership in liquidation, and the only rights
inherited by her testamentary heir, the herein plaintiff,
were those resulting from the said liquidation in favor
of the deceased partner, and nothing more
Before this liquidation is made, which up to the
present has not been effected, it is impossible to
determine what rights or interests, if any, the
deceased had, the partnership bond having
beendissolved
There is no sufficient ground for holding that a
community of property existed between the
plaintiff and the defendant, it not being
known whether the deceased still had any interest in
the partnership property which could have been
transmitted by will to the plaintiff

Furthermore, it cannot be said that the partnership

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