Heirs of Jose Lim vs.
Lim its income that is left in the project, in
( Trucking Business )
F: Petitioners insists that Jose Lim was the
partner of Norberto and Jimmy and not
Elfledo (late husband of respondent) and
therefore all the properties acquired by
Elfledo and respondent form part of the
estate of Jose, having been derived from the
alleged partnership.
I: W/N Elfledo is a partner of the said trucking
company.
H:
The court applying 1769 of the Civil
Code held that Elfledo is a partner.
Cresencia Lim testified that jose gave
Elfledo 50k, as share in the
partnership, on a date that coincided
with the payment of the initial capital
of the partnership
Elfledo ran the affairs of the
partnership, wielding absolute control,
power and authority, without
intervention or opposition whatsoever
of the petitioners herein;
All the properties particularly the 9
trucks of the partnership were
registered in the name of Elfledo.
Jimmy testified that Elfledo did not
receive wages or salaries from the
partnership, indicating that what he
actually received were shares of the
profits of the business;
None of the petitioners, as heirs of
Jose, the alleged partner, demanded
periodic accounting from Elfledo
during his lifetime.
Philex Mining Corp vs. CIR
(Joint Venture for Mining)
F: Petitioner entered into an agreement with
Baguio Gold, where the former agreed to
manage the mining operations of the latter.
The agreement was evidenced by a Power
of Attorney. It was indicated in the said
document, that Baguio Gold would contribute
P11M under its owner's account plus any of
addition to its actual mining claim.
Meanwhile, petitioner's contribution would
consist of its expertise in the
management and operation of mines, as
well as the manager's account which is
comprised of P11M in funds and property
and petitioner's "compensation" as
manager that cannot be paid in cash.
The mining suffered serious loses which
ended business of both parties evidenced by
their execution of a compromise
agreement.
The CIR assessed Philex Mining for tax
deficiencies. It stressed that Philex entered
into a partnership with Baguio Gold.
Petitioner denied the allegations of the CIR
and maintained that its advances of money
and property to Baguio Gold were in a nature
of a loan as evidenced by the compromise
agreement.
I: W/N Philex and Baguio Mining formed
partnership.
H:
Yes. The parties entered into the
compromise agreements as a
consequence of the dissolution of their
business relationship. It did not define
that relationship or indicate its real
character.
The relationship of the parties may be
gleaned upon the power of attorney
document entered between the 2.
An examination of the "Power of
Attorney" reveals that a partnership or
joint venture was indeed intended by
the parties. Under 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.
The term compensation found in the
said document could not be deemed
as wages. It is impossible for a
company to give a salary to an
employee representing 50% of its net
profit.
 While a corporation, like petitioner,
cannot generally enter into a contract
of partnership unless authorized by
law or its charter, it has been held that
it may enter into a joint venture which
is akin to a particular partnership:
under Philippine law, a joint venture is
a form of partnership and should be
governed by the law of partnerships
Tocao vs. CA
F: Petitioners maintain that there was no
partnership between petitioner Belo, on one
hand, and respondent Nenita Anay, on the
other hand; and that the latter being merely
an employee of petitioner Tocao. It was found
out that Belo sometimes would participate in
Geminesse Enterprise meetings to help
petitioner Tocao.
I: W/N Belo is a partner of Tocao.
H:
No. Belos presence in Geminesse
Enterprises meetings was merely as
guarantor of the company and to help
Tocao his personal friend.
Respondent herself professed lacked
of knowledge that petitioner Belo
received any share in the profits of
Geminesse.
On the other hand, Tocao declared
that Belo was not entitled to any share
in the profits of the enterprise.
With no participation in the profits,
petitioner Belo cannot be deemed a
partner; since the essence of a
partnership is that the partners share
in the profits and losses.
Aguila, Jr. vs. CA
F: Petitioner is the manager of A.C. Aguila &
Sons, Co, a partnership engaged in lending
activities. Private respondent Felicidad
Abrogar entered into a MOA w/ A.C. Aquila &
Sons involving a pacto de retro sale of a
house & lot. As private respondent failed to
redeem the property within the prescribed
period, petitioner caused the cancellation of
TCT and the issuance of the new certificate
of title in the name of the partnership.
Private respondent filed a petition for a
declaration of the nullity of the deed of sale
and a criminal complaint for forgery against
petitioner alleging that the signature of her
husband was a forgery because he was
already dead when the deed was supposed
to have been executed.
Petitioner now contends that he is not the
real party in interest but A.C. Aguila & Co.,
against which this case should have been
brought.
I: W/N petitioner is the real party in interest.
H:
Art. 1768 of the Civil Code, a
partnership has a juridical personality
separate and distinct from that of each
partner. The partners cannot be held
liable for the obligations of the
partnership unless it is shown that the
legal fiction of a different juridical
personality is being used for
fraudulent, unfair, or illegal purposes.
In this case. Private respondent has
not shown that A.C. Aguila & Sons,
Co., represented by petitioner. Hence,
it is the partnership, not its officers or
agents, which should be impleaded in
any litigation involving property
registered in its name.
Ortega vs. CA
F: Petitioner filed a MR for the decision of the
SEC en banc which dissolved the partnership
of Bito, Misa & Lozada upon withdrawal of
Atty. Joaquin L. Misa. He also asked for an
appointment of a receiver to take over the
assets of the dissolved partnership and to
take charge of the winding up of its affairs.
I: W/N the CA erred in holding that the
withdrawal of private respondent dissolved
the partnership regardless of his good or bad
faith.
H:
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 foundation
and essence of partnership.
Its continued existence is, in turn,
dependent on the mutual resolve,
along with each partners capability to
give it, and the absence of a cause for
dissolution provided by law itself.
Verily, any one of the partners may, at
his sole pleasure, dictate 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 at
will.
In the matter of the Petition for
Authority To Continue use of the firm
name Ozaeta, Romulo, etc.
F: 2 separate petitions were filed by the
surviving partners of Atty. Alexander Sycip
and the surviving partners of Herminiano
Ozaeta, praying that they be allowed to
continue using, in the name of their firms,
the names of partners who passed away.
Arguments:
1. Under the law, a partnership is not
prohibited from continuing its business
under a firm name which includes the
name of the deceased partner.( Art.
1840 of the Civil Code )
2. In regulating other professions, such
as accountancy and engineering, the
legislature has authorized the
adoption of firm names without any
restriction as to the use, in such firm
name, of the deceased partner.
3. The Canons of Professional Ethics are
not transgressed because as adopted
by American Bar Association: the
continued use of the name of a
deceased or former partner when
permissible by local custom is not
unethical, but care should be taken
that no imposition or deception is
practiced through this use.
4. The deaths of the partners were well-
publicized.
5. No local custom prohibits the
continued use of the partners name in
a professional firms name.
6. The continued use of the deceased
partners name in the firm name of
law partnerships has been consistently
allowed by US Courts.
I: W/N the names of the deceased
partners should be allowed to continue in
use in the firm name.
H:
Art. 1815. Every partnership shall
operate under a firm name, which
may or may not include the name
of one or more of the partners.
Those who, not being members of
the partnership, include their
names in the firm name, shall be
subject to the liability of a partner.
(partners should be living persons
who can be subjected to liability)
Art. 1840 treats more of a
commercial partnership with a
good will to protect rather than a
professional partnership, with no
sealable good will but whose
reputation depends on the personal
qualifications of its individual
members.
The partnership for the practice of
law cannot be likened to
partnerships formed by other
professionals or for business. The
practice of law is also a special
privilege, highly personal and
partaking of the nature of a public
trust.
 Firm names, under local customs,
identify the more active and more
senior members or partners of the
law firm.
The possibility of deception upon
the public, real, or consequential,
where the name of a deceased
partner continues to be used
cannot be ruled out.
NB: Rule 3.02 of the CPR approved and
promulgated by the SC on June 21,1988 in
effect abandoned the ruling in the Sycip
case. (see Art. 1815 Civil Code)
Pascual vs. CIR
F: The petitioners Pascual and dragon bought
5 parcels of land. The first 2 were sold in
1968, while the remaining 3 were sold in
1970. Petitioners paid the corresponding
capital gains taxes on both sales availing the
tax amnesties way back in 1974. However,
the CIR assessed and required petitioners to
pay corporate income taxes for the said
years. Respondent insisted that in both
years, petitioners as co-owners in the real
estate transactions formed an unregistered
partnership taxable as corporation.
I: W/N petitioners formed a partnership in
both transactions.
H:
No. There is no evidence that the
petitioners entered into an agreement
to contribute money, property or
industry in a common fund, and that
they intended to divide the profits
among themselves. Respondent CIR
just assumed these conditions to be
present on the basis of the fact that
petitioners purchased certain parcels
of land and became co-owners
thereof.
The transactions were isolated. The
character of habituality peculiar to
business transactions for the purpose
of gain was not present.
The sharing of returns does not in
itself establish a partnership whether
or not the persons sharing therein
have a joint or common right or
interest in the property. There must be
a clear intent to form a partnership,
the existence of a juridical personality
different from the individual partners,
and the freedom of each party to
transfer or assign the whole property.
Aurbach vs. Sanitary Wares
(Partnership; Joint Venture; Foreign and
Domestic Corp)
F: This consolidated petition assailed the
decision of the CA directing a certain
MANNER OF ELECTION OF OFFICERS IN THE
BOARD OF DIRECTORS
*There are two groups in this case, the
Lagdameo group composed of Filipino
investors and the American Standard Inc.
(ASI) composed of foreign investors.
The ASI Group and petitioner Salazar (G.R.
Nos. 75975-76) contend that the actual
intention of the parties should be viewed
strictly on the "Agreement" dated August
15,1962 wherein it is clearly stated that the
parties' intention was to form a corporation
and not a joint venture.
I: The main issue hinges on who were the
duly elected directors of Saniwares for the
year 1983 during its annual stockholders'
meeting held on March 8, 1983. To answer
this question the following factors should be
determined:
*(1) the nature of the business established
by the parties whether it was a joint venture
or a corporation and
H:
While certain provisions of the
Agreement would make it appear that
 the parties thereto disclaim being
partners or joint venturers such
disclaimer is directed at third parties
and is not inconsistent with, and does
not preclude, the existence of two
distinct groups of stockholders in
Saniwares one of which (the Philippine
Investors) shall constitute the
majority, and the other ASI shall
constitute the minority stockholder. In
any event, the evident intention of
the Philippine Investors and ASI in
entering into the Agreement is to
enter into a joint venture
enterprise
An examination of the Agreement
shows that certain provisions were
inccuded to protect the interests of ASI
as the minority. For example, the vote
of 7 out of 9 directors is required in
certain enumerated corporate acts.
ASI is contractually entitled to
designate a member of the Executive
Committee and the vote of this
member is required for certain
transactions
The Agreement also requires a 75%
super-majority vote for the
amendment of the articles and by-laws
of Saniwares. ASI is also given the
right to designate the president and
plant manager .The Agreement further
provides that the sales policy of
Saniwares shall be that which is
normally followed by ASI and that
Saniwares should not export
"Standard" products otherwise than
through ASI's Export Marketing
Services. Under the Agreement, ASI
agreed to provide technology and
know-how to Saniwares and the latter
paid royalties for the same.
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 temporary purpose. It is in fact
hardly distinguishable from the
partnership, since their 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.
Ona vs. CIR
F: In 1944 Lorenzo Ona was appointed
administrator of the estate of his late wife
Julia Bunales. The administrator submitted
the project of partition, which was approved
by the court. However, there was no attempt
was made to divide the properties among his
5 children. Instead, the properties remained
under the management of Lorenzo who used
the said properties in business by leasing or
selling them and investing the income
derived therefrom.
In the years 1944 to 1954, respondent CIR
did treat petitioners as co-owners, not liable
to corporate tax, and it was only from 1955
that CIR considered them as having formed
an unregistered partnership.
I: W/N an unregistered partnership was
formed.
H:
Yes. It is admitted that all profits from
these ventures were divided among
petitioners proportionately in
accordance with their respective
shares in the inheritance.
From the moment petitioners allowed
not only the incomes from their
respective shares but even the
properties themselves to be used by
Lorenzo as a common fund in
undertaking several transactions or
business, with the intention of
deriving profit to be shared by them
 proportionately, such act was
tantamount to actually contributing
such incomes to a common fund and,
in effect they thereby formed an
unregistered partnership taxable by
law.
Reyes vs. CIR
F: Petitioners purchased a lot and building.
The initial payment was shared equally by
the respondents. At the time of the purchase,
the building was leased to various tenants,
whose rights under the lease contracts with
the original owners, the purchasers,
petitioners herein, agreed to respect. The
administration of the building was entrusted
to an administrator who collected the rents;
kept books and records and rendered
statement of accounts to the owners.
Petitioners divided equally the income of
operation and maintenance.
The CTA held that petitioners formed a
partnership taxable by law applying the
ruling in Evangelista case.
I: W/N petitioners indeed formed a
partnership as contemplated by law.
H:
Yes. The essential elements of
partnerships are present in this case,
namely; (a) an agreement to
contribute money, property, or
industry to a common fund; and (b)
intent to divide the profits among the
contracting parties.
The first was already admitted and
therefore it boils down to their intent
in acting as they did.
Upon consideration of the
circumstances surrounding the case, it
was found out that the petitioners
purpose was to engage in real estate
transactions for monetary gain and
then divide the same among
themselves.
In the case at bar, there was a
common fund used in a series of
transactions; the property thus
acquired was not used for residential
or other purposes other than leasing.
Such properties having been under
management by one person with full
power to lease and such condition
existed for 10 years already.
The collective effect of these
circumstances is such as to leave no
room for doubt on the existence of
said intent in the petitioners herein.
Sardane vs. CA
F: Petitioner advanced the theory that he is a
partner of private respondent and not a mere
employee indebted to the latter. Petitioners
bases are the promissory notes executed by
private respondent in favor of petitioner as
allegedly his share or contribution for the
partnership.
I: W/N there exists a partnership between
petitioner and private respondent.
H:
No. While receipt of a share in the
profits of the business is a prima facie
evidence that the person is receiving
the same as a partner, no inference
shall be drawn if such profits were
received in payment of his wages as
an employee.
Gallemit vs. Tabliran
(Co-ownership; Without intent for profit)
F: This suit concerns the partition of a piece
of land held pro indiviso which the plaintiff
and the defendant had acquired in common
from its original owner. By the refusal of the
defendant to divide the property, the plaintiff
was compelled to bring the proper action for
the enforcement of partition.
Petitioner asserts that a contract of
partnership was created between them.
Defendant simply denied the its existence.
 I: W/N an unregistered partnership was
I: W/N partnership exists. formed.

H:
No. It does not appear that any
contract of partnership whatever was
made between them for the purposes
expressed in article 1665 of the Civil
Code, for the sole transaction
performed by them was the
acquisition jointly by mutual
agreement of the land in question,
since it was undivided, under the
condition that they each should pay
one-half of the price thereof and that
the property so acquired should be
divided between the two purchasers;
and as, under this title, the plaintiff
and the defendant are the co-owners
of the said land, the partition or
division of such property held in joint
tenancy must of course be allowed,
and the present possessor of the land
has no right to deny the plaintiff's
claim on grounds or reasons
unsupported by proof.
H:
No. Their original purpose was to
divide the lots for residential purposes.
If later on they found it not feasible to
build their residences on the lots
because of the high cost of
construction, then they had no choice
but to resell the same to dissolve the
co-ownership.
The division of the profit was merely
incidental to the dissolution of the co-
ownership which was in the nature of
things a temporary state. It had to be
terminated sooner or later.
Article 1769(3) of the Civil Code
provides that "the sharing of gross
returns does not of itself establish a
partnership, whether or not the
persons sharing them have a joint or
common right or interest in any
property from which the returns are
derived". There must be an
unmistakable intention to form a
partnership or joint venture.

Obillos vs. CIR

(Profit merely incidental)
F: This case is about the income tax liability
of four brothers and sisters who sold two
parcels of land which they had acquired from
their father.
Commissioner of Internal Revenue
required the four petitioners to pay
corporate income tax on the total profit of
P134,336 in addition to individual income tax
on their shares thereof He assessed P37,018
as corporate income tax, P18,509 as 50%
fraud surcharge and P15,547.56 as 42%
accumulated interest, or a total of
P71,074.56.
The Commissioner acted on the theory that
the four petitioners had formed an
unregistered partnership or joint venture
within the meaning of sections 24(a) and
84(b) of the Tax Code]