2.

Navarro and Navarro vs CA

FACTS:
Private respondent Olivia V. Yanson and Petitioner Lourdes Navarro were engaged in the business
of Air Freight Service Agency. Pursuant to the Agreement which they entered, they agreed to
operate the said Agency; It is the Private Respondent Olivia Yanson who supplies the necessary
equipment and money used in the operation of the agency. Her brother in the person of Atty.
Rodolfo Villaflores was the manager thereof while petitioner Lourdes Navarro was the Cashier;
In compliance to her obligation as stated in their agreement, private respondent brought into their
business certain chattels or movables or personal properties. However, those personal properties
remain to be registered in her name; Among the provisions stipulated in their agreement is the
equal sharing of whatever proceeds realized from their business; However, sometime on July 23,
1976, private respondent Olivia V. Yanson, in order for her to recovery the above mentioned
personal properties which she brought into their business, filed a complaint against petitioner
Lourdes Navarro for "Delivery of Personal Properties With Damages and with an application for
a writ of replevin. Private respondents' application for a writ of replevin was later approved/granted
by the trial court. For her defense, petitioner Navarro argue that she and private respondent Yanson
actually formed a verbal partnership which was engaged in the business of Air Freight Service
Agency. She contended that the decision sustaining the writ of replevin is void since the properties
belonging to the partnership do not actually belong to any of the parties until the final disposition
and winding up of the partnership.

ISSUE:
1. Whether or not there was a partnership that existed between the parties.
2. Whether the properties that were commonly used in the operation of Allied Air Freight belonged
to the alleged partnership business.
RULING:
Article 1767 of the New Civil Code defines the contract of partnership: Art. 1767. 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 proceeds among themselves. A cursory
examination of the evidences presented no proof that a partnership, whether oral or written had
been constituted. In fact, those movables brought by the plaintiff for the use in the operation of the
business remain registered in her name. While there may have been co-ownership or co-possession
of some items and/or any sharing of proceeds by way of advances received by both plaintiff and
the defendant, these are not indicative and supportive of the existence of any partnership between
them. Art. 1769 par. 2 provides: Co-ownership or co-possession does not of itself establish a
partnership, whether such co-owners or co-possessors do or do not share any profits made by the
use of the property” Besides, the alleged profit was a difference found after valuating the assets
and not arising from the real operation of the business. In accounting procedures, strictly, this
could not be profit but a net worth.
3. Villareal vs Ramirez
Facts:
In 1984, Villareal, Carmelito Jose and Jesus Jose formed a partnership with a capital of
P750,000for the operation of a restaurant and catering business. Respondent Ramirez joined as a
partner in the business with the capital contribution of P250,000. In 1987, Jesus Jose withdrew
from the partnership and within the same time, Villareal and Carmelito Jose, petitioners closed the
business without prior knowledge of respondents In March 1987, respondents wrote a letter to
petitioners stating that they were no longer interested in continuing the partnership and that they
were accepting the latter’s offer to return their capital contribution. This was left unheeded by the
petitioners, and by reason of which respondents filed a complaint in the RTC.RTC ruled that the
parties had voluntarily entered into a partnership, which could be dissolved at any time, and this
dissolution was showed by the fact that petitioners stopped operating the restaurant. On appeal,
CA upheld RTC’s decision that the partnership was dissolved and it added that respondents had
no right to demand the return of their capital contribution. However since petitioners did not give
the proper accounting for the liquidation of the partnership, the CA took it upon itself to compute
their liabilities and the amount that is proper to the respondent. The computation of which
was:(capital of the partnership – outstanding obligation) / remaining partners =amount due to
private respondent

Issue: W/N petitioners are liable to respondents for the latter’s share in the partnership?

Ruling:

No. Respondents have no right to demand from petitioner the return of their equity share. As found
by the court petitioners did not personally hold its equity or assets. “The partnership has a juridical
personality separate and distinct from that of each of the partners.” Since the capital was
contributed to the partnership, not to petitioners, it is the partnership that must refund the equity
of the retiring partners. However, before the partners can be paid their shares, the creditors of the
partnership must first be compensated. Therefore, the exact amount of refund equivalent to
respondents’ one-third share in the partnership cannot be determined until all the partnership assets
will have been liquidated and all partnership creditors have been paid. CA’s computation of the
amount to be refunded to respondents as their share was thus erroneous.