IRMA IDOS, petitioner

vs.
COURT OF APPEALS and PEOPE OF THE PHILIPPINES,
respondents

FACTS:

Irma L. Idos, is a businesswoman, engaged in leather tanning.
Eddie Alarilla, private respondent, supplier and business partner.
1985, Eddie joined the business of Idos and formed a partnership.
1986, the parties agreed to terminate their partnership.
Upon liquidation the partnership has P 1,800,000.00 on which Eddie has
50% share.
4 post-dated checks were issued for Eddies share in the receivables.
3 out of the 4 checks cleared, the 3
rd
check was dishonoured due to
insufficiency of funds.

PETITIONERs CONTENTION
The checks were issued subject to the disposition of the stocks and the
collection of receivables of the business.

ISSUE:
1. W/N Irma L. Idos violated BP 22?

2. Did the check issued to respondent correspond to the termination
of the partnership?

RULING:
ON BP 22
No.

B.P. 22 state that:

Sec. 1. Checks without sufficient funds.

Any person who makes or draws and issues any check to apply on
account or for value, knowing at the time of issue that he does not have sufficient funds
in or credit with the drawee bank for the payment of such check in full upon its
presentment, which check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored for the same
reason had not the drawer, without any valid reason, ordered the bank to
stop payment, shall be punished by imprisonment of not less than thirty days
but not more than one (1) year or by a fine of not less than but not more
than double the amount of the check which fine shall in no case exceed Two
hundred thousand pesos, or both such fine and imprisonment at the
discretion of the court.

The same penalty shall be imposed upon any person who having
sufficient funds in or credit with the drawee bank when he makes or draws
and issues a check, shall fail to keep sufficient funds or to maintain a credit
or to cover the full amount of the check if presented within a period of
ninety (90) days from the date appearing thereon, for which reason it is
dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the
person or persons who actually signed the check in behalf of such drawer
shall be liable under this Act.

Sec. 2. Evidence of knowledge of insufficient funds.

The making, drawing and issuance of a check payment of which is
refused by the drawee because of insufficient funds in or credit with such
bank, when presented within ninety (90) days from the date of the check,
shall be prima facie evidence of knowledge of such insufficiency of funds or
credit unless such maker or drawer pays the holder thereof the amount due thereon or
makes arrangements for payment in full by the drawee of such check within five (5)
banking days after receiving notice that such check has not been paid by the drawee.

The elements of the offense penalized under B.P. 22, are as follows:

(1) the making, drawing and issuance of any check to apply to account or for
value;

(2) the knowledge of the maker, drawer or issuer that at the time of issue he
does not have sufficient funds in or credit with the drawee bank for the
payment of such check in full upon its presentment; and

(3) subsequent dishonor of the check by the drawee bank for insufficiency of
funds or credit or dishonor for the same reason had not the drawer, without
any valid cause, ordered the bank to stop payment.

Evidence on record would show that the subject check was to be funded
from receivables to be collected and goods to be sold by the partnership, and
only when such collection and sale were realized.

It did not involve a debt of or any account due and payable by the petitioner.

Petitioner may not be held liable for violation of B.P. 22 for the following
reasons:

(1) the subject check was not made, drawn and issued by petitioner in
exchange for value received as to qualify it as a check on account or for
value;

(2) there is no sufficient basis to conclude that petitioner, at the time of issue
of the check, had actual knowledge of the insufficiency of funds; and

(3) there was no notice of dishonor of said check actually served on
petitioner, thereby depriving her of the opportunity to pay or make
arrangements for the payment of the check, to avoid criminal prosecution.

ON PARTNERSHIP
No.

Although they agreed to dissolve the partnership, such agreement did not
automatically put an end to the partnership.

They were still in the process of winding up the affairs of the partnership,
when the check in question was issued.

Under the Civil Code, the three final stages of a partnership are:

(1) dissolution;
(2) winding-up; and
(3) termination.

These stages are distinguished, to wit:

(1) Dissolution

Dissolution is the change in the relation of the partners caused
by any partner ceasing to be associated in the carrying on of the
business (Art. 1828).

It is that point of time the time the partners cease to carry on
the business together.

(2) Winding Up

Winding up is the process of settling business affairs of
dissolution.

(3) Termination

Termination is the point in time after all the partnership affairs have
been wound up.

Since the partnership has not been terminated, the petitioner and private
complainant remained as co-partners.

The check was thus issued by the petitioner to complainant, as would a
partner to another, and not as payment from a debtor to a creditor.
MANUEL G. SINGSONG, JOSE BELZUNCE, AGUSTIN E.
TONSAY, JOSE L. ESPINOS, BACOLOD SOUTHERN LUMBER
YARD, and OPPEN, ESTEBAN, INC., plaintiffs-appellees,
vs.
ISABELA SAWMILL, MARGARITA G. SALDAJENO and her
husband CECILIO SALDAJENO LEON GARIBAY, TIMOTEO
TUBUNGBANUA, and THE PROVINCIAL SHERIFF OF
NEGROS OCCIDENTAL, defendants, MARGARITA G.
SALDAJENO and her husband CECILIO SALDAJENO, defendants-
appellants.

FACTS:

1951, defendants Leon Garibay, Margarita G. Saldejeno and Timoteo
Tubungbanua entered into a contract of partnership under the firm
name Isabela Sawmill.
1956, plaintiff Oppen, Esteban, Inc. sold a Motor Truck and 2 tractors to
Isabela Sawmill.
The rest of the plaintiffs were creditors of Isabela Sawmill.
Total payment made by Isabela Sawmill to Oppen, Esteban Inc. amounted
to P 19,211.11 leaving an unpaid balance of P 1,288.89.
April 1958, a civil case was filed by one of the partners Margarita
Saldejeno against the partnership.
A memorandum of agreement (dissolution of the partnership) was entered
into between Leon Garibay, Timoteo Tubungbanua and Margarita
Saldejano.
Part of the memorandum agreement is the institution of the chattel
mortgage over the tractors and motor truck to Margarita in lieu of the
obligations of Leon Garibay and Timoteo Tubungbanua
May 1958, Leon Garibay and Timoteo Tubungbanua did not divide the
assets and properties of the Isabela Sawmill, but continued the business of
said partnership using the same name.
May 1959, Sheriff published notices for the auction of the tractors and
motor truck bought by Isabela Sawmill.
Margarita Saldejano won in the public auction of the tractor and the motor
truck.

ISSUE:
1. W/N any partner may cease to be associated in the partnership?

2. Did the Isabela Sawmill Partnership dissolved upon the
memorandum of agreement entered into between the partner?

RULING:

It is true that the dissolution of a partnership is caused by any partner ceasing
to be associated in the carrying on of the business.


However, on dissolution, the partnership is not terminated but continuous
until the winding up of the business.

Instead of winding up the business of the partnership, they continued the
business still in the same name.

It is expressly stipulated in the memorandum-agreement that the remaining
partners had constituted themselves as the partnership entity of the "Isabela
Sawmill".

The partnership was not terminated and it continued doing business through
the two remaining partners.

Since the partnership still exists, the properties mortgaged to Margarita were
properties belong to the partnership and not to the partners individually.

The plaintiffs, creditors of the Isabela Sawmill, were prejudiced in their rights
by the execution of the chattel mortgage over the properties of the
partnership in favour of Margarita G. Saldajeno.


INOCENCIA DELUAO and FELIPE DELUAO plaintiffs-appellees,
vs.
NICANOR CASTEEL and JUAN DEPRA, defendants,
NICANOR CASTEEL, defendant-appellant.

FACTS:

1940-1945, Nicanor Casteel filed a fishpond application in Sitio of
Malalag. 3 applications were all disapproved.
May 1946, Leoncio Aradillos, was granted a fishpond permit covering 10
hectares within the area applied for by Casteel.
August 1946, Victor D. Carpio, was granted fishpond permit within the
area applied for by Casteel.
Nov. 1948, Felipe Deluao, filed his own application over the area covered
by Casteels application.
Casteel, threatened by the above applicants, expanded his occupation
thereof by constructing dikes.
Due to financial restrains, Casteel sought the financial aid of his uncle
Felipe Deluao, who extended a loan.
Nov. 1949, Inocencia Deluao (wife of Felipe Deluao) entered into a
contract of service with Nicanor Casteel.

That the Party of the First Part in consideration of the mutual
covenants and agreements made herein to the Party of the Second
Part, hereby enter into a contract of service, whereby the Party of
the First Part hires and employs the Party of the Second Part on
the following terms and conditions, to wit:

That the Party of the First Part will finance as she has hereby
financed the sum of TWENTY SEVEN THOUSAND PESOS
(P27,000.00), Philippine Currency, to the Party of the Second Part
who renders only his services for the construction and
improvements of a fishpond at Barrio Malalag, Municipality of
Padada, Province of Davao, Philippines;

That the Party of the Second Part will be the Manager and sole
buyer of all the produce of the fish that will be produced from said
fishpond;

That the Party of the First Part will be the administrator of the
same she having financed the construction and improvement of
said fishpond;

That this contract was the result of a verbal agreement entered into
between the Parties sometime in the month of November, 1947,
with all the above-mentioned conditions enumerated; ...

Sept. 1950, Nicanor Casteel was granted fishpond permit for the area in
question.
Jan. 1951, Nicanor Casteel forbade Inocencia Deluao from further
administering the fishpond.

ISSUE:
1. W/N a contract of co-ownership/partnership was created?
2. W/N the partnership had been dissolved?

RULING:

When appellee Inocencia Deluao and appellant entered into a contract of
service neither Casteel nor Felipe Deluao was the holder of a fishpond
permit over the area.

No law, rule or regulation prohibited them from cultivating the said land
pending the application of permit.

The initial intention of the parties was not to form a co-ownership but to
establish a partnership Deluao as capitalist and Casteel as industrial partner.

This can be gleaned from the letter of Casteel to Felipe:

... [W]ith respect to your allowing me to use your money, same will
redound to your benefit because you are the ones interested in half of the work
we have done so far, besides I did not insist on our being partners in my fishpond
permit, but it was you "Tatay" Eping the one who wanted that we be partners and it
so happened that we became partners because I am poor, but in the midst of my
poverty it never occurred to me to be unfair to you. Therefore so that
each of us may be secured, let us have a document prepared to the effect that we are
partners in the fishpond that we caused to be made here in Balasinon, but it does not
mean that you will treat me as one of your "Bantay" (caretaker) on wage basis but
not earning wages at all, while the truth is that we are partners. In the event that
you are not amenable to my proposition and consider me as "Bantay"
(caretaker) instead, do not blame me if I withdraw all my cases and be
left without even a little and you likewise.

DISSOLUTION

Art. 1830(3) of the Civil Code enumerates, as one of the causes for the
dissolution of a partnership, "... any event which makes it unlawful for
the business of the partnership to be carried on or for the members to
carry it on in partnership."

The approval of the appellant's fishpond application by the decisions in
DENR Cases 353 and 353-B brought to the fore several provisions of law
which made the continuation of the partnership unlawful and therefore
caused its ipso facto dissolution.

Under the Fisheries Act, the holder of a fishpond permit is prohibited from
transferring or subletting the fishpond granted to him, without the
permission of the Secretary of Agriculture and Natural Resources.

Since the partnership had for its object the division into two equal parts of
the fishpond between the appellees and the appellant after it shall have been
awarded to the latter, and therefore it envisaged the unauthorized transfer of
one-half thereof to parties other than the applicant Casteel, it was dissolved
by the approval of his application and the award to him of the fishpond.

The approval was an event which made it unlawful for the business of the
partnership to be carried on or for the members to carry it on in partnership.


































DOMINGO BEARNEZA, plaintiff-appellee,
vs.
BALBINO DEQUILLA, defendant-appellant

FACTS:

1903, Balbino Dequilla and Perpetua Bearneza, formed a partnership, for
the purpose of exploiting a fish pond in Barotac Nuevo, Iloilo.
Perpetua obligated to contribute payment of the expenses.
Perpetua died on 1912.
Perpetua left a will and appointed Domingo Bearnez to succeed to all her
rights and interests in the fish pond.
Domingo demanded from Balbino the delivery of the party of the fish
pond belonging to his decedent.

Defendants Contention

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 fish pond.

ISSUE:

1. W/N the partnership between Balbino and Perpetua had been
dissolved?

RULING:

The 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, pursuant to the
provisions of article 1704 of the Code last cited.

The partnership being dissolved by the death of one partner, its subsequent
status was that of a partnership in liquidation.

The only right inherited by Domingo were those resulting from the said
liquidation in favour of the decedent and nothing more.

NO PARTNERSHIP continued between the plaintiff and the defendant.