TUASON V BOLANOS

As to the first assigned error, there is nothing to the contention that the present action is not brought by the real party in interest, that is, by J. M. Tuason and Co., Inc. What the Rules of Court require is that an action be broughtin the name of, but not necessarily by, the real party in interest. ( ection !, Rule !." In fact the practice is for an attorney#at#la$ to bring the action, that is to file the co%plaint, in the na%e of the plaintiff. That practice appears to ha&e been follo$ed in this case, since the co%plaint is signed by the la$ fir% of Araneta and Araneta, 'counsel for plaintiff' and co%%ences $ith the state%ent 'co%es no$ plaintiff, through its undersigned counsel.' It is true that the co%plaint also states that the plaintiff is 'represented herein by its Managing (artner )regorio Araneta, Inc.', another corporation, but there is nothing against one corporation being represented by another person, natural or *uridical, in a suit in court. The contention that )regorio Araneta, Inc. can not act as %anaging partner for plaintiff on the theory that it is illegal for t$o corporations to enter into a partnership is $ithout %erit, for the true rule is that 'though a corporation has no po$er to enter into a partnership, it %ay ne&ertheless enter into a *oint &enture $ith another $here the nature of that &enture is in line $ith the business authori+ed by its charter.' (Wyo%ing#Indiana ,il )as Co. vs. Weston, -. A. /. R., 0.12, citing ! 3letcher Cyc. of Corp., 0.-!." There is nothing in the record to indicate that the &enture in $hich plaintiff is represented by )regorio Araneta, Inc. as 'its %anaging partner' is not in line $ith the corporate business of either of the%. A)4I/A JR 5 CA ( 067-" Alfredo Aguila Jr.
Business Organization Partnership, Agency, Trust Identity Separate and Distinct In April 1991, the spouses Ruben and Felicidad Abro ar entered into a loan a ree!ent "ith a lendin #ir! called A$%$ A uila & Sons, %o$, a partnership$ The loan "as #or '())*$ To secure the loan, the spouses !ort a ed their house and lot located in a subdi+ision$ The ter!s o# the loan #urther stipulates that in case o# non,pa-!ent, the propert- shall be auto!aticallappropriated to the partnership and a deed o# sale be readil- e.ecuted in #a+or o# the partnership$ She does ha+e a 9) da- rede!ption period$ Ruben died, and Felicidad #ailed to !a*e pa-!ent$ She re#used to turn o+er the propert- and so the #ir! #iled an e/ect!ent case a ainst her 0"herein she lost1$ She also #ailed to redee! the propert- "ithin the period stipulated$ She then #iled a ci+il case a ainst Al#redo A uila, !ana er o# the #ir!, see*in #or the declaration o# nullit- o# the deed o# sale$ The RT% retained the +alidit- o# the deed o# sale$ The %ourt o# Appeals re+ersed the RT%$ The %A ruled that the sale is +oid #or it is a pactum commissorium sale "hich is prohibited under Art$ ()22 o# the %i+il %ode 0note the disparit- o# the purchase price, "hich is the loan a!ount, "ith the actual +alue o# the propert- "hich is a#ter all located in a subdi+ision1$ ISSU34 5hether or not the case #iled b- Felicidad shall prosper$ 63L74 No$ Un#ortunatel-, the ci+il case "as #iled not a ainst the real part- in interest$ As pointed out b- A uila, he is not the real part- in interest but rather it "as the partnership A$%$ A uila & Sons, %o$ The Rules o# %ourt pro+ide that 8e+er- action !ust be prosecuted and de#ended in the na!e o# the real part- in interest$9 A real part- in interest is one "ho

"ould be bene#ited or in/ured b- the /ud !ent, or "ho is entitled to the a+ails o# the suit$ An- decision rendered a ainst a person "ho is not a real part- in interest in the case cannot be e.ecuted$ 6ence, a co!plaint #iled a ainst such a person should be dis!issed #or #ailure to state a cause o# action, as in the case at bar$ Under Art$ 1:;2 o# the %i+il %ode, a partnership 8has a /uridical personalit- separate and distinct #ro! that o# each o# the partners$9 The partners cannot be held liable #or the obli ations o# the partnership unless it is sho"n that the le al #iction o# a di##erent /uridical personalit- is bein used #or #raudulent, un#air, or ille al purposes$ In this case, Felicidad has not sho"n that A$%$ A uila & Sons, %o$, as a separate /uridical entit-, is bein used #or #raudulent, un#air, or ille al purposes$ <oreo+er, the title to the sub/ect propert- is in the na!e o# A$%$ A uila & Sons, %o$ It is the partnership, not its o##icers or a ents, "hich should be i!pleaded in an- liti ation in+ol+in propert- re istered in its na!e$ A +iolation o# this rule "ill result in the dis!issal o# the co!plaint$

63IRS OF TAN= 3N= >33 V %A 01:;91

Business Organization Partnership, Agency, Trust Periodic Accounting Profit Sharing Ben uet Lu!ber has been around e+en be#ore 5orld 5ar II but durin "ere con#iscated b- the ?apanese$ A#ter the "ar, the brothers Tan 3n the "ar, its stoc*s >ee La- caused the >ee died$ La- and Tan 3n

pooled their resources in order to re+i+e the business$ In 1921, Tan 3n

con+ersion o# Ben uet Lu!ber into a corporation called Ben uet Lu!ber and 6ard"are %o!pan-, "ith hi! and his #a!il- as the incorporators$ In 192@, Tan 3n Therea#ter, the heirs o# Tan 3n partnership$ Tan 3n La- denied that there "as a partnership bet"een hi! and his brother$ 6e said that Tan 3n >ee "as !erel- an e!plo-ee o# Ben uet Lu!ber$ 6e sho"ed e+idence consistin o# Tan 3n >eeBs pa-rollC his SSS as an e!plo-ee and Ben uet Lu!ber bein the e!plo-ee$ As a result o# the presentation o# said e+idence, the heirs o# Tan 3n a ainst Tan 3n La- #or alle edl- #abricatin ho"e+er dis!issed #or lac* o# e+idence$ ISSU34 5hether or not Tan 3n >ee is a partner$ 63L74 No$ There "as no certi#icate o# partnership bet"een the brothers$ The heirs "ere not able to sho" "hat "as the a ree!ent bet"een the brothers as to the sharin o# pro#its$ All the- presented "ere circu!stantial e+idence 00" they conducted the affairs of the business >ee #iled a cri!inal case those e+idence$ Said cri!inal case "as >ee de!anded #or an accountin and the liAuidation o# the

during 8ee9s lifeti%e, *ointly, (!" they $ere the ones gi&ing orders to the e%ployees, (2" they $ere the ones preparing orders fro% the suppliers, (1" their fa%ilies stayed together at the :enguet /u%ber co%pound, and (;" all their children $ere e%ployed in the business in different capacities." , "hich in
no "a- pro+ed partnership$ It is ob+ious that there "as no partnership "hatsoe+er$ 3.cept #or a #ir! na!e, there "as no #ir! account, no #ir! letterheads sub!itted as e+idence, no certi#icate o# partnership, no a ree!ent as to pro#its and losses, and no ti!e #i.ed #or the duration o# the partnership$

There "as e+en no atte!pt to sub!it an accountin "ar until >eeBs death in 192D$

correspondin

to the period a#ter the

It had no business boo*, no "ritten account nor an-

!e!orandu! #or that !atter and no license !entionin the e.istence o# a partnership$ In #act, Tan 3n La- "as able to sho" e+idence that Ben uet Lu!ber is a sole proprietorship$ 6e re istered the sa!e as such in 19EDC that >ee "as /ust an e!plo-ee based on the latterBs pa-roll and SSS co+era e, and other records indicatin Tan 3n La- as the proprietor$ Also, the business de#initel- a!ounted to !ore '@,)))$)) hence i# there "as a partnership, it should ha+e been !ade in a public instru!ent$ But the business was started after the war !"#$% prior to the pub&ication of the 'ew (i)i& (ode in !"$*+ 3+en so, nothin pre+ented the parties #ro! co!pl-in "ith this reAuire!ent$ Also, the Supre!e %ourt e!phasiFed that #or D) -ears, Tan 3n >ee ne+er as*ed #or an accountin $ The essence o# a partnership is that the partners share in the pro#its and losses$ 3ach has the ri ht to de!and an accountin as lon as the partnership e.ists$ 3+en i# it can be speculated that a scenario "herein 8i# e.cellent relations e.ist a!on the partners at the start o# the business and all the partners are !ore interested in seein than et i!!ediate returns, a de#er!ent o# sharin in the situation in the case at bar, the de#er!ent, i# an-, had accountin is e+idence o# a partnership "hich >ee ne+er did$ The Supre!e %ourt also noted4 In deter!inin "hether a partnership e.ists, these rules shall appl-4 011 3.cept as pro+ided b- Article 12(E, persons "ho are not partners as to each other are not partners as to third personsC 0(1 %o,o"nership or co,possession does not o# itsel# establish a partnership, "hether such co,o"ners or co,possessors do or do not share an- pro#its !ade b- the use o# the propert-C 0@1 The sharin o# ross returns does not o# itsel# establish a partnership, "hether or not the persons sharin the! ha+e a /oint or co!!on ri ht or interest in an- propert- "hich the returns are deri+edC 0D1 The receipt b- a person o# a share o# the pro#its o# a business is pri!a #acie e+idence that he is a partner in the business, but no such in#erence shall be dra"n i# such pro#its "ere recei+ed in pa-!ent4 0a1 As a debt b- install!ent or other"iseC 0b1 As "a es o# an e!plo-ee or rent to a landlordC 0c1 As an annuit- to a "ido" or representati+e o# a deceased partnerC 0d1 As interest on a loan, thou h the a!ount o# pa-!ent +ar- "ith the pro#its o# the businessC 0e1 As the consideration #or the sale o# a install!ents or other"ise$ ood"ill o# a business or other propert- bthe #ir! ro" rather to be in the pro#its is per#ectl- plausible$9 But one on too lon

plausible$ A person is presu!ed to ta*e ordinar- care o# his concerns$ A de!and #or periodic

,,,,
Thus, in order to constitute a partnership, it %ust be established that (0" t$o or %ore persons bound the%sel&es to contribute %oney, property, or industry to a co%%on fund, and (!" they intend to di&ide the profits a%ong the%sel&es.0; The agree%ent need not be for%ally reduced into $riting, since statute allo$s the oral constitution of a partnership, sa&e in t$o instances< (0" $hen i%%o&able property or real rights are contributed,07 and (!" $hen the partnership has a capital of three thousand pesos or %ore.06 In both cases, a public instru%ent is required.0- An in&entory to be signed by the parties and attached to the public instru%ent is also indispensable to the &alidity of the partnership $hene&er i%%o&able property is contributed to the partnership. 0

NO A%%OUNTIN= FOR D) G3ARS

The essence of a partnership is that the partners share in the profits and losses. != >ach has the right to de%and an accounting as long as the partnership e?ists. A de%and for periodic accounting is e&idence of a partnership

'AS%UAL V %IR 01:;:1

(etitioners bought t$o parcels of land and another 2 parcels the follo$ing year. The ! parcels $ere sold in 0=7- $hile the other 2 $ere sold in 0=6.. Reali+ing profits fro% the sale, petitioners filed capital gains ta?. @o$e&er, they $ere assessed $ith deficiency ta? for corporate inco%e ta?es. I 4>< Whether or not petitioners for%ed an unregistered partnership thereby assessed $ith corporate inco%e ta?. R4/IA)< :y the contract of partnership, t$o or %ore persons bind the%sel&es to contribute %oney, industry or property to a co%%on fund $ith the intention of di&iding profits a%ong the%sel&es. There is no e&idence though, that petitioners entered into an agree%ent to contribute M(I to a co%%on fund and that they intend to di&ide profits a%ong the%sel&es. The petitioners purchased parcels of land and beca%e co#o$ners thereof. Their transactions of selling the lots $ere isolated cases. The character of habituality peculiar to the business transactions for the purpose of gain $as not present. The sharing of returns foes not in itself establish a partnership $hether or not the persons sharing therein ha&e a *oint or co%%on right or interest in the property. There %ust be a clear intent to for% partnership, the e?istence of a *uridical personality different fro% the indi&idual partners, and the freedo% of each party to transfer or assign the $hole property.

,,,
There is no evidence that petitioners entered into an agreement to contribute money, property, or industry to a common fund, and that they intended to divide the profits among themselves. Respondent commissioner and/or his representative 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. In Evangelista, there was a series of transactions where petitioners purchased 2 lots showing that the purpose was not limited to the conservation or preservation of the common funds or even the properties ac!uired by them. The character of habituality peculiar to business transactions engaged in for the purpose of gain was present here. The sharing of returns does not of 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 e"istence of a juridical personality different from the individual partners, and the freedom of each party to transfer or assign the whole property. In the present case, there is clear evidence of co-ownership between the petitioners. There is no ade!uate basis to support the proposition that they thereby formed a unregistered partnership. The two isolated transactions whereby they purchased properties and sold the same a few years thereafter did not thereby ma#e them partners. They shared in the gross profits as co-owners and paid their capital gains ta"es on their net profits and availed of the ta" amnesty thereby. $nder the circumstances, they cannot be considered to have formed an unregistered partnership which is thereby liable for corporate income ta", as the respondent commissioner proposes. --

Article 0676 of the Ci&il Code of the (hilippines pro&ides< :y the contract of partnership t$o or %ore persons bind the%sel&es to contribute %oney, property, or industry to a co%%on fund, $ith the intention of di&iding the profits a%ong the%sel&es. (ursuant to this article, the essential elements of a partnership are two, namely: (a) an agreement to contribute money, property or industry to a common fund; and (b) intent to divide the profits among the contracting parties. The first ele%ent is undoubtedly present in the case at bar, for, ad%ittedly, petitioners ha&e agreed to, and did, contribute %oney and property to a co%%on fund. Hence, the issue narrows down to their intent in acting as they did. ONA V %IR 1:;9 0@1 Facts: Julia Buales died leaving as heirs her surviving spouse, Lorenzo Oa and her five children. A civil case was instituted for the settlement of her state, in which Oa was appointed administrator and later on the guardian of the three heirs who were still minors when the pro ect for partition was approved. !his shows that the heirs have undivided " interest in #$ parcels of land, % houses and mone& from the 'ar (amage )ommission. Although the pro ect of partition was approved *& the )ourt, no attempt was made to divide the properties and the& remained under the management of Oa who used said properties in *usiness *& leasing or selling them and investing the income derived therefrom and the proceeds from the sales thereof in real properties and securities. As a result, petitioners+ properties and investments graduall& increased. ,etitioners returned for income ta- purposes their shares in the net income *ut the& did not actuall& receive their shares *ecause this left with Oa who invested them. Based on these facts, )./ decided that petitioners formed an unregistered partnership and therefore, su* ect to the corporate income ta-, particularl& for &ears #011 and #01%. ,etitioners as2ed for reconsideration, which was denied hence this petition for review from )!A+s decision. .ssue: '34 there was a co5ownership or an unregistered partnership '34 the petitioners are lia*le for the deficienc& corporate income ta6eld:

7nregistered partnership. !he !a- )ourt found that instead of actuall& distri*uting the estate of the deceased among themselves pursuant to the pro ect of partition, the heirs allowed their properties to remain under the management of Oa and let him use their shares as part of the common fund for their ventures, even as the& paid corresponding income ta-es on their respective shares. 8es. For ta- purposes, the co5ownership of inherited properties is automaticall& converted into an unregistered partnership the moment the said common properties and3or the incomes derived therefrom are used as a common fund with intent to produce profits for the heirs in proportion to their respective shares in the inheritance as determined in a pro ect partition either dul& e-ecuted in an e-tra udicial settlement or approved *& the court in the corresponding testate or intestate proceeding. !he reason is simple. From the moment of such partition, the heirs are entitled alread& to their respective definite shares of the estate and the incomes thereof, for each of them to manage and dispose of as e-clusivel& his own without the intervention of the other heirs, and, accordingl&, he *ecomes lia*le individuall& for all ta-es in connection therewith. .f after such partition, he allows his share to *e held in common with his co5heirs under a single management to *e used with the intent of ma2ing profit there*& in proportion to his share, there can *e no dou*t that, even if no document or instrument were e-ecuted, for the purpose, for ta- purposes, at least, an unregistered partnership is formed. For purposes of the ta- on corporations, our 4ational .nternal /evenue )ode includes these partnerships 9

The term partnership includes a syndicate, group, pool, joint venture or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on (8 erten!s "aw of #ederal $ncome Ta%ation, p& '() *ote (+, emphasis ours&with the e-ception onl& of dul& registered general copartnerships 9 within the purview of the term :corporation.; .t is, therefore, clear to our mind that petitioners herein constitute a partnership, insofar as said )ode is concerned, and are su* ect to the income ta- for corporations. Judgment affirmed. =AT%6ALIAN V %IR

Facts: (laintiffs purchased, in the ordinary course of business, fro% one of the duly authori+ed agents of the Aational Charity $eepstaBes ,ffice one ticBet for the su% of t$o pesos ((!", said ticBet $as registered in the na%e of Jose )atchalian and Co%pany. The ticBet $on one of the third#pri+es in the a%ount of (;.,.... Jose )atchalian $as required to file the corresponding inco%e ta? return co&ering the pri+e $on. Cefendant#

Collector %ade an assess%ent against Jose )atchalian and Co. requesting the pay%ent of the su% of (0,1==.=1 to the deputy pro&incial treasurer of (ulilan, :ulacan. (laintiffs, ho$e&er through counsel %ade a request for e?e%ption. It $as denied. (laintiffs failed to pay the a%ount due, hence a $arrant of distraint and le&y $as issued. (laintiffs paid under protest a part of the ta? and penalties to a&oid the effects of the $arrant. A request that the balance be paid by plaintiffs in install%ents $as %ade. This $as granted on the condition that a bond be filed. (laintiffs failed in their install%ent pay%ents. @ence a request for e?ecution of the $arrant of distraint and le&y $as %ade. (laintiffs paid under protest to a&oid the e?ecution. A clai% for refund $as %ade by the plaintiffs, $hich $as dis%issed, hence the appeal. Issue: Whether the plaintiffs for%ed a partnership hence liable for inco%e ta?. Held: Des. According to the stipulation facts the plaintiffs organi+ed a partnership of a ci&il nature because each of the% put up %oney to buy a s$eepstaBes ticBet for the sole purpose of di&iding equally the pri+e $hich they %ay $in, as they did in fact in the a%ount of (;.,.... The partnership $as not only for%ed, but upon the organi+ation thereof and the $inning of the pri+e, Jose )atchalian personally appeared in the office of the

(hilippines Charity $eepstaBes, in his capacity as co# partner, as such collection the pri+e, the office issued the checB for (;.,... in fa&or of Jose )atchalian and co%pany, and the said partner, in the sa%e capacity, collected the said checB. All these circu%stances repel the idea that the plaintiffs organi+ed and for%ed a co%%unity of property only.
,,,
The legal questions raised in plaintiffs#appellants9 fi&e assigned errors %ay properly be reduced to the t$o follo$ing< (0" Whether the plaintiffs for%ed a partnership, or %erely a co%%unity of property $ithout a personality of its o$nE in the first case it is ad%itted that the partnership thus for%ed is liable for the pay%ent of inco%e ta?, $hereas if there $as %erely a co%%unity of property, they are e?e%pt fro% such pay%entE and (!" $hether they should pay the ta? collecti&ely or $hether the latter should be prorated a%ong the% and paid indi&idually. There is no doubt that if the plaintiffs %erely for%ed a co%%unity of property the latter is e?e%pt fro% the pay%ent of inco%e ta? under the la$. :ut according to the stipulation facts the plaintiffs organi+ed a partnership of a ci&il nature because each of the% put up %oney to buy a s$eepstaBes ticBet for the sole purpose of di&iding equally the pri+e $hich they %ay $in, as they did in fact in the a%ount of (;.,... (article 077;, Ci&il Code". The partnership $as not only for%ed, but upon the organi+ation thereof and the $inning of the pri+e, Jose )atchalian personally appeared in the office of the (hilippines Charity $eepstaBes, in his capacity as co#partner, as such collection the pri+e, the office issued the checB for (;.,... in fa&or of Jose )atchalian and co%pany, and the said partner, in the sa%e capacity, collected the said checB. All these circu%stances repel the idea that the plaintiffs organi+ed and for%ed a co%%unity of property only.
,:I//, 5 CIR 3ACT < (etitioners sold the lots they inherited fro% their father and deri&ed a total profit of (22,;-1 for each of the%. They treated the profit as capital gain and paid an inco%e ta? thereof. The CIR required petitioners to pay corporate inco%e ta? on their shares, .!.F ta? fraud surcharge and 1!F accu%ulated interest. Ceficiency ta? $as assessed on the theory that they had for%ed an unregistered partnership or *oint &enture. I 4>< Whether or not partnership $as for%ed by the siblings thus be assessed of the corporate ta?. R4/IA)< (etitioners $ere co#o$ners and to consider the% partners $ould obliterate the distinction bet$een co#o$nership and partnership. The petitioners $ere not engaged in any *oint &enture by reason of that isolated transaction. Art 067=G the sharing of gross returns does not of itself establish a partnership, $hether or not the persons sharing the% ha&e a *oint or co%%on right or interest in any property fro% $hich the returns are deri&ed. There %ust be an un%istaBable intention to for% partnership or *oint &enture.

The %ommissioner acted on the theory that the petitioners had formed an unregistered partnership or joint venture within the meaning of &ections 2 'a( and ) 'b( of the Ta" %ode. *e hold that it is error to consider the petitioners as having formed a partnership under +rticle ,-.- of the %ivil %ode simply because they allegedly contributed money to buy 2 lots, resold the same and divided the profit among themselves. To regard petitioners as having formed a ta"able unregistered partnership would result in oppressive ta"ation and confirm the dictum that the power to ta" involves the power to destroy. That eventuality should be obviated. They were co-owners pure and simple. To consider them as partners would obliterate the distinction between co-ownership and partnership. The petitioners were not engaged in any joint venture by reason of that isolated transaction. +rticle ,-./'0( of the %ivil %ode provides that 1the 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 a unmista#able intention to form a partnership or joint venture. &uch intent was present in 2atchalian v. %ollector of Internal Revenue, .- 3hil. ..., where ,4 persons contributed small amounts to purchase a 2-peso sweepsta#es tic#et with the agreement that they would divide the pri5e. The tic#et won the 0rd pri5e of 346,666. The ,4 persons were held liable for income ta" as an unregistered partnership. --

Their original purpose $as to di&ide the lots for residential purposes. If later on they found it not feasible to build their residences on the lots because of the high cost of construction, then they had no choice but to resell the sa%e to dissol&e the co#o$nership. The di&ision of the profit $as %erely incidental to the dissolution of the co#o$nership $hich $as in the nature of things a te%porary state. It had to be ter%inated sooner or later. Re&ersed CTAHs decision >5AA)>/I TA 5 CIR

Facts: @erein petitioners seeB a re&ie$ of CTAHs decision holding the% liable for inco%e ta?, real estate dealerHs ta? and residence ta?. As stipulated, petitioners borro$ed fro% their father a certain su% for the purpose of buying real properties. Within 3ebruary 0=12 to April 0==1, they ha&e bought parcels of land fro% different persons, the %anage%ent of said properties $as charged to their brother i%eon e&idenced by a docu%ent. These properties $ere then leased or rented to &arious tenants.

,n epte%ber 0=;1, CIR de%anded the pay%ent of inco%e ta? on corporations, real estate dealerHs fi?ed ta?, and corporation residence ta? to $hich the petitioners seeB to be absol&ed fro% such pay%ent. Issue: Whether petitioners are sub*ect to the ta? on corporations. Ruling: The Court ruled that $ith respect to the ta? on corporations, the issue hinges on the %eaning of the ter%s IcorporationJ and IpartnershipJ as used in ection !1 (pro&ides that a ta? shall be le&ied on e&ery corporation no %atter ho$ created or organi+ed e?cept general co#partnerships" and -1 (pro&ides that the ter% corporation includes a%ong others, partnership" of the AIRC. (ursuant to Article 0676, ACC (pro&ides for the concept of partnership", its essential ele%ents are< (a" an agree%ent to contribute %oney, property or industry to a co%%on fundE and (b" intent to di&ide the profits a%ong the contracting parties. It is of the opinion of the Court that the first ele%ent is undoubtedly present for petitioners ha&e agreed to, and did, contribute %oney and property to a co%%on fund. As to the second ele%ent, the Court fully satisfied that their purpose $as to engage in real estate transactions for %onetary gain and then di&ide the sa%e a%ong the%sel&es as indicated by the follo$ing circu%stances< 0. The co%%on fund $as not so%ething they found already in e?istence nor a property inherited by the% pro indi&iso. It $as created purposely, *ointly borro$ing a substantial portion thereof in order to establish said co%%on fundE !. They in&ested the sa%e not %erely in one transaction, but in a series of transactions. The nu%ber of lots acquired and transactions undertaBe is strongly indicati&e of a pattern or co%%on design that $as not li%ited to the conser&ation and preser&ation of the afore%entioned co%%on fund or e&en of the property acquired. In other $ords, one cannot but percei&e a character of habitually peculiar to business transactions engaged in the purpose of gainE 2. aid properties $ere not de&oted to residential purposes, or to other personal uses, of petitioners but $ere leased separately to se&eral personsE 1. They $ere under the %anage%ent of one person $here the affairs relati&e to said properties ha&e been handled as if the sa%e belonged to a corporation or business and enterprise operated for profitE ;. >?isted for %ore than ten years, or, to be e?act, o&er fifteen years, since the first property $as acquired, and o&er t$el&e years, since i%eon >&angelista beca%e the %anagerE 7. (etitioners ha&e not testified or introduced any e&idence, either on their purpose in creating the set up already ad&erted to, or on the causes for its continued e?istence. The collecti&e effect of these circu%stances is such as to lea&e no roo% for doubt on the e?istence of said intent in petitioners herein. Also, petitionersH argu%ent that their being %ere co#o$ners did not create a separate legal entity $as re*ected because, according to the Court, the ta? in question is one i%posed upon 'corporations', $hich, strictly speaBing, are distinct and different fro% 'partnerships'. When the AIRC includes 'partnerships' a%ong the entities sub*ect to the ta? on 'corporations', said Code %ust allude, therefore, to organi+ations $hich are not necessarily 'partnerships', in the technical sense of the ter%. The qualifying e?pression found in ection !1 and -1(b" clearly indicates that a *oint &enture need not be undertaBen

in any of the standard for%s, or in confor%ity $ith the usual require%ents of the la$ on partnerships, in order that one could be dee%ed constituted for purposes of the ta? on corporations. Accordingly, the la$%aBer could not ha&e regarded that personality as a condition essential to the e?istence of the partnerships therein referred to. 3or purposes of the ta? on corporations, AIRC includes these partnerships # $ith the e?ception only of duly registered general co partnerships # $ithin the pur&ie$ of the ter% 'corporation.' It is, therefore, clear that petitioners herein constitute a partnership, insofar as said Code is concerned and are sub*ect to the inco%e ta? for corporations. As regards the residence of ta? for corporations ( ection ! of CA Ao. 17;", it is analogous to that of section !1 and -1 (b" of the AIRC. It is apparent that the ter%s 'corporation' and 'partnership' are used in both statutes $ith substantially the sa%e %eaning. Consequently, petitioners are sub*ect, also, to the residence ta? for corporations. 3inally, on the issues of being liable for real estate dealerHs ta?, they are also liable for the sa%e because the records sho$ that they ha&e habitually engaged in leasing said properties $hose yearly gross rentals e?ceeds (2,...... a year.