Idos v. CA G.R. NO. 110782, September 25, 1998, Quisumbing, J.

Facts​:

In 1985, Eddie Alarilla and Irma Idos formed a partnership which they decided to terminate
after a year. To pay Alarilla’s share of the asset, Idos issued 4 post dated checks. Alarilla
was able to encash the first, second and fourth checks but the third was dishonored for
insufficiency of funds. He demanded payment but Idos failed to pay. She claimed that the
checks were issued as assurance of Alarilla’s share in the assets of the partnership and that
it was supposed to be deposited until the stocks were sold. He filed an information for
violation of BP blg. 22 against Idos in which she was found guilty by the trial court.

Issue​: Did the court confused and merged into one the legal concepts of dissolution,
liquidation and termination of a partnership?

Ruling​: The partners agreement to terminate the partnership did not automatically dissolved
the partnership. They were in the process of winding-up when the check in question was
issued. The best evidence of the existence of the partnership, which was not yet terminated
were the unsold goods and uncollected receivables which were presented to the trial court.
Article 1829 of the Civil Code provides that “on dissolution the partnership is not terminated
but continues until the winding-up of partnership affairs is completed. Since the partnership
has not been terminated, Idos and Alarilla remained co-partners. The check was issued by
petitioner to respondent as would a partner to another and not as a payment by debtor to
creditor. Thus, absent the first element of the complained offense, the act is not punishable
by the statute.

Ortega vs. CA

​FACTS​:

On December 19, 1980, respondent Misa associated himself together, as senior partner with
petitioners Ortega, del Castillo, Jr., and Bacorro, as junior partners. On Feb. 17, 1988,
respondent Misa wrote a letter stating that he is withdrawing and retiring from the firm and
asking for a meeting with the petitioners to discuss the mechanics of the liquidation. On June
30, 1988, petitioner filed a petition to the Commision's Securities Investigation and Clearing
Department for the formal dissolution and liquidation of the partnership. On March 31, 1989,
the hearing officer rendered a decision ruling that the withdrawal of the petitioner has not
dissolved the partnership. On appeal, the SEC en banc reversed the decision and was
affirmed by the Court of Appeals. Hence, this petition.

ISSUE​:
Whether or not the Court of Appeals has erred in holding that the partnership is a
partnership at will and whether or not the Court of Appeals has erred in holding that the
withdrawal of private respondent dissolved the partnership regardless of his good or bad
faith
HELD​:
No. The SC upheld the ruling of the CA regarding the nature of the partnership. The SC
further stated that a partnership that does not fix its term is a partnership at will. The birth
and life of a partnership at will is predicated on the mutual desire and consent of the
partners. The right to choose with whom a person wishes to associate himself is the very
foundation and essence of that partnership. Its continued existence is, in turn, dependent on
the constancy of that mutual resolve, along with each partner's capability to give it, and the
absence of a cause for dissolution provided by the law itself. Verily, any one of the partners
may, at his sole pleasure, dictate a dissolution of the partnership at will. He must, however,
act in good faith, not that the attendance of bad faith can prevent the dissolution of the
partnership but that it can result in a liability for damages.

Yu v. NLRC GR No. 97212, June 30, 1993

Facts:

Benjamin Yu used to be the Assistant General Manager of Jade Mountain, a partnership

engaged in marble quarrying and export business. The majority of the founding partners sold
their interests in said partnership to Willy Co and Emmanuel Zapanta without Yu’s
knowledge. Said new partnership continued operating under the same name and continued
the business’s operations. However, it transferred its main office from Makati to
Mandaluyong. Said new partnership did not anymore availed of the services of Yu. Thus, he
filed a complaint for illegal dismissal, recovery of unpaid wages and damages.

Issue:
WON Yu can still assert his right for the unpaid salary by the old partnership against the new
partnership?

Ruling :

The legal effect of the changes in the membership of the partnership was the dissolution of
the old partnership which had hired Yu in 1984 and the emergence of a new firm composed
of Willy Co and Emmanuel Zapanta in 1987. The new partnership simply took over the
business enterprise owned by the preceding partnership, and continued using the old name
of Jade Mountain Products Company Limited, 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. Not
only the retiring partners but also the new partnership itself which continued the business of
the old, dissolved, one, are liable for the debts of the preceding partnership.

Emnace v. Court of Appeals and the Estate of Vicente Tabanao

G.R. No. 126334, November 23, 2001

Petitioners Emnace, Tabanao and Divigranacia were partners in a business known as Ma.
Nelma Fishing Industry. Sometime in January 1986, they decided to dissolve their
partnership and executed an agreement of partition and distribution. Throughout the
existence of the partnership, and even after Tabanao’s death, petitioner failed to submit to
Tabanao’s heirs any financial statements. Petitioner also reneged on his promise to turn
over the 1/3 share in the total assets of the partnership to the heirs. Private respondents filed
an action for accounting, payment of shares, division of assets and damages. Petitioner filed
a motion to dismiss the complaint on the grounds of improper venue, lack of jurisdiction and
lack of capacity of the estate of Tabanao to sue. The trial court denied the motion to dismiss.
The trial court held that the heirs of Tabanao had a right to sue in their own names, in view
of the provision of Art. 777 of the CC.

ISSUE​: Whether the private respondents have the legal capacity to sue.

RULING:

YES. petitioner asserts that the surviving spouse of Vicente Tabanao has no legal capacity
to sue since she was never appointed as administratrix or executrix of his estate. Petitioner’s
objection in this regard is misplaced. The surviving spouse does not need to be appointed as
executrix or administratrix of the estate before she can file the action. She and her children
are complainants in their own right as successors of Vicente Tabanao. From the very
moment of Vicente Tabanao’s death, his rights insofar as the partnership was concerned
were transmitted to his heirs, for rights to the succession are transmitted from the moment of
death of the decedent. Whatever claims and rights Vicente Tabanao had against the
partnership and petitioner were transmitted to respondents by operation of law, more
particularly by succession, which is a mode of acquisition by virtue of which the property,
rights and obligations to the extent of the value of the inheritance of a person are
transmitted. Moreover, respondents became owners of their respective hereditary shares
from the moment Vicente Tabanao died. A prior settlement of the estate, or even the
appointment of Salvacion Tabanao as executrix or administratrix, is not necessary for any of
the heirs to acquire legal capacity to sue. As successors who stepped into the shoes of their
decedent upon his death, they can commence any action originally pertaining to the
decedent. From the moment of his death, his rights as a partner and to demand fulfillment of
petitioner’s obligations as outlined in their dissolution agreement were transmitted to
respondents. They, therefore, had the capacity to sue and seek the court’s intervention to
compel petitioner to fulfill his obligations.

VICENTE SY, TRINIDAD PAULINO, 6B’S TRUCKING CORPORATION, and SBT

TRUCKING CORPORATION, petitioners, vs. HON. COURT OF APPEALS and JAIME
SAHOT, respondents. [G.R. No. 142293. February 27, 2003]

FACTS​: Sometime in 1958, private respondent Jaime Sahot[5] started working as a truck
helper for petitioners’ family-owned trucking business named Vicente Sy Trucking. In 1965,
he became a truck driver of the same family business, renamed T. Paulino Trucking Service,
later 6B’s Trucking Corporation in 1985, and thereafter known as SBT Trucking Corporation
since 1994. Throughout all these changes in names and for 36 years, private respondent
continuously served the trucking business of petitioners. When Sahot was 59 years old, he
incurred several absences due to various ailments. Particularly causing him pain was his left
thigh, which greatly affected the performance of his task as a driver. He inquired about his
medical and retirement benefits with the Social Security System (SSS) on April 25, 1994, but
discovered that his premium payments had not been remitted by his employer.Sahot filed a
week-long leave to get medical attention. He was treated for EOR, presleyopia, hypertensive
retinopathy G II and heart enlargement. Because of such, Belen Paulino of the SBT Trucking
Service management told him to file a formal request for extension of his leave. When Sahot
applied for an extended leave, he was threatened of termination of employment should he
refuse to go back to work. Eventually, Sahot was dismissed from employment which
prompted the latter to file an illegal dismissal case with the NLRC. For their part, petitioners
admitted they had a trucking business in the 1950s but denied employing helpers and
drivers. They contend that private respondent was not illegally dismissed as a driver
because he was in fact petitioner’s industrial partner. They add that it was not until the year
1994, when SBT Trucking Corporation was established, and only then did respondent Sahot
become an employee of the company, with a monthly salary that reached P4,160.00 at the
time of his separation. The NLRC and the CA ruled that Sahot was an employee of the
petitioner.

ISSUE​: Whether Sahot is an industrial partner

RULING:

No. Article 1767 of the Civil Code states that in a 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. Not one of these circumstances is
present in this case. No written agreement exists to prove the partnership between the
parties. Private respondent did not contribute money, property or industry for the purpose of
engaging in the supposed business. There is no proof that he was receiving a share in the
profits as a matter of course, during the period when the trucking business was under
operation. Neither is there any proof that he had actively participated in the management,
administration and adoption of policies of the business. Thus, the NLRC and the CA did not
err in reversing the finding of the Labor Arbiter that private respondent was an industrial
partner from 1958 to 1994. On this point, the Court affirmed the findings of the appellate
court and the NLRC. Private respondent Jaime Sahot was not an industrial partner but an
employee of petitioners from 1958 to 1994. The existence of an employer-employee
relationship is ultimately a question of fact and the findings thereon by the NLRC, as affirmed
by the Court of Appeals, deserve not only respect but finality when supported by substantial
evidence. Substantial evidence is such amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion.