PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM NAME “SYCIP, SALAZAR, FELICIANO, HERNANDEZ & CASTILLO.

” July 30, 1979

Facts: Petitions were filed by the surviving partners of Atty. Alexander Sycip, who died on May 5, 1975 and by the surviving partners of Atty. Herminio
Ozaeta, who died on February 14, 1976, praying that they be allowed to continue using, in the names of their firms, the names of partners who had passed
away. Petitioners contend that 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. They also contend that no local custom prohibits the continued use of a
deceased partner’s name in a professional firm’s name; there is no custom or usage in the Philippines, or at least in the Greater Manila Area, which
recognizes that the name of a law firm necessarily identifies the individual members of the firm.

Issue: WON the surviving partners may be allowed by the court to retain the name of the partners who already passed away in the name of the firm? NO

Held:* In the case of Register of Deeds of Manila vs. China Banking Corporation, the SC said: The Court believes that, in view of the personal and confidential
nature of the relations between attorney and client, and the high standards demanded in the canons of professional ethics, no practice should be allowed
which even in a remote degree could give rise to the possibility of deception. Said attorneys are accordingly advised to drop the names of the deceased
partners from their firm name.

The public relations value of the use of an old firm name can tend to create undue advantages and disadvantages in the practice of the profession. An able
lawyer without connections will have to make a name for himself starting from scratch. Another able lawyer, who can join an old firm, can initially ride on
that old firm’s reputation established by deceased partners. The court also made the difference from the law firms and business corporations:
A partnership for the practice of law is not a legal entity. It is a mere relationship or association for a particular purpose. … It is not a partnership formed for
the purpose of carrying on trade or business or of holding property.” 11 Thus, it has been stated that “the use of a nom de plume, assumed or trade name in
law practice is improper.

We find such proof of the existence of a local custom, and of the elements requisite to constitute the same, wanting herein. Merely because something is
done as a matter of practice does not mean that Courts can rely on the same for purposes of adjudication as a juridical custom. Petition suffers legal and
ethical impediment.

Facts: The case involves two petitions. The first was filed by the surviving partners of Atty. Alexander Sycip who died on May 5, 1975 and the other by the
surviving partners of Atty. Herminio Ozaeta who died on February 14, 1976 praying that they be allowed to continue using in the name of their firms the
names of their deceased partners who had passed away. The petitioner anchored their petitions on the following: 1)that under the law, a partnership is not
prohibited from continuing its business under a firm name which includes the name of a deceased partner; 2) that 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 name
of a deceased partner; 3)that the Canons of Professional Ethics are not transgressed by the continued use of the name of a deceased partner in the firm
name of a law partnership because Canon 33 of the Canons of Professional Ethics adopted by the American Bar Association declares that 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) that there is no possibility of imposition or deception because the deaths of their respective deceased partners were well-
publicized in all newspapers of general circulation for several days; the stationeries now being used by them carry new letterheads indicating the years when
their respective deceased partners were connected with the firm and; 5) that no local custom prohibits the continued use of a deceased partner's name in a
professional firm's name.

Issue: Whether or not the petitioners should be allowed to use in their firm names the names of their deceased partners
Held: The court ruled in the negative. The court cited the following reasons. First is that Article. 1815 of the Civil Code provides that “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” thus it is clearly tacit in the above provision that names in a firm name of a
partnership must either be those of living partners’ and. in the case of non-partners, should be living persons who can be subjected to liability. Second, the
courts said that a partnership for the practice of law cannot be likened to partnerships formed by other professionals or for business. For one thing, the law
on accountancy specifically allows the use of a trade name in connection with the practice of accountancy. A partnership for the practice of law is not a legal
entity. It is a mere relationship or association for a particular purpose. It is not a partnership formed for the purpose of carrying on trade or business or of
holding property. Thus, it has been stated that "the use of a nom de plume, assumed or trade name in law practice is improper. And lastly while the court
admits that it is true that Canon 33 does not consider as unethical the continued use of the name of a deceased or former partner in the firm name of a law
partnership when such a practice is permissible by local custom but the Canon warns that care should be taken that no imposition or deception is practiced
through this use. It must be conceded that in the Philippines, no local custom permits or allows the continued use of a deceased or former partner's name in
the firm names of law partnerships.

Nature: Petition for Authority to Continue Use of the Firm Name

 Petitioners prayed that they be allowed to continue using, in the names of their firms, the names of partners who had passed away Died: Atty.
Alexander Sycip of Sycip, Salazar, Feliciano,Hernandez, and Castillo Died: Atty. Herminio Ozaeta of Ozaeta, Romulo, de Leon, Mabanta and Reyes
Denied.
 1815: names in a firm name of a partnership must either be those of living partners and in case of non-partners, should be living persons who can
be subjected to liability
 1825: prohibits a 3rd person from including his name in the firm name under the pain of assuming liability of a partner
 a professional partnership depends on the personal qualifications of its members
  a partnership for the practice of law is not a legal entity but a mere relationship for a particular purpose
 no local custom in the Phils. Permits or allows the continued use of a deceased partner’s name: otherwise, there is the possibility of deception
Petition for Authority to Continue Use of the Firm Name “Sycip, Salazar, etc.” and In the Matter of the Petition for Authority to Continue Use of the Firm
Name “Ozaeta, Romulo, etc.”, petitioners [1979]
 Petitioners pray that they may be allowed to continue including the names of their deceased partners in their firm names. In the case of Sycip, Salazar,
they wish to continue using the name of deceased partner Atty. Alexander Sycip while on the part of Ozaeta, they wish to continue using the name of
Atty. Herminio Ozaeta.
 Bases of petitions:
1. CC Art. 1840: Using a deceased partner’s name as part of the partnership/business name shall not itself make the individual property of the
deceased partner liable for any debts contracted by such person or partnership.
2. Other professions allow such (accountancy & engineering). No fundamental policy that’s offended by doing so at least where firm name has
acquired the characteristics of a “trade name.”
3. Canons of Professional Ethics (adopted by the American Bar Association) are not transgressed, Canon 33 of w/c provides that such be allowed
“when permissible by local custom, is not unethical, but care should be taken that no imposition/deception is practiced through this use.”
4. No possibility of imposition/deception since the deaths of their deceased partners were well-publicized in all newspapers of general circulation for
several days. Their stationeries use new letterheads indicating the years when the deceased partners were connected w/the firm. Petitioners will
notify leading national & international law directories re: deaths of the deceased partners.
5. Such is not prohibited by local customs. No custom/usage recognizes that the name of a law firm identifies the individual members of the firm.
6. Such is allowed by US courts & accepted in most countries of the world.

Issue: WON petitioners should be allowed to continue using the names of their deceased partners in their firm names. – NO.
Ratio:
1. Deen Case: Cebu-based law firm was advised to desist from including in their firm designation the name of a partner who has long been dead.
2. Register of Deeds of Manila vs. China Banking Corp.: involved the law firm of Perkins & Ponce Enrile w/c continued using the name of Atty. Perkins who
was already deceased. Law firm raised arguments similar to those raised by petitioners in this case. Court upheld ruling in Deen case explaining that in
view of the personal & confidential nature of the relations between atty & client & high standards demanded in the canons of professional ethics,
practice of using deceased partner’s name in the firm name cannot be allowed since even in a remote degree it could give rise to the possibility of
deception.
3. Allowing such would go against CC Art. 1815 w/c provides that “Those who, not being members of the partnership, include their names in the firm
name, shall be subject to the liability of a partner.” Provision simply means that names in a firm name of a partnership must either be those of living
partners or in the case of non-partners, should be living persons who can be subjected to liability.
4. Canon 34, Canons of Professional Ethics prohibits an agreement wherein the widow & heirs of a deceased lawyer will receive a percentage, gross/net, of
fees received from future business of deceased lawyer’s former clients there being no lawyer & service involved. In the same manner, the widow/heirs
of a deceased lawyer can’t be held liable for the transactions entered into by deceased lawyer’s former partners.
5. It can create undue advantages & disadvantages. Unfair to new lawyers who are starting from scratch while advantageous for a lawyer who joins an old
firm & rides on firm’s reputation established by deceased partners.
6. CC Art. 1840 involves exemption from liability contemplating a hold-over situation in cases of dissolved partnerships or when one partner dies and the
other partners continue the business. It deals more w/commercial partnerships rather than a professional one. Commercial partnerships allow
succeeding partners to continue using the name of the deceased partner in the firm name since such name is a partnership asset inseparable from the
good will of the firm. Whereas in a professional partnership, the reputation of w/c depends on the individual skill of the members & it has no good will
to be distributed as a firm asset on its dissolution.
7. Partnership for the practice of law can’t be likened to partnerships formed by other professionals or for business. Law on accountancy specifically allows
use of a trade name in connection w/the practice of accountancy. Note that a partnership for law practice is not a legal entity nor a partnership formed
to carry on trade/business/hold property. It’s a mere relationship or association for a particular purpose. Remember law is profession, it’s different from
trade/business. Rt to practice law is not a natural/constitutional right but is in the nature of a privilege or franchise. It presupposes integrity, legal
standing, attainment, exercise of a special privilege, highly personal & partaking of the nature of a public trust in its possessor.
8. Cited Canon 33 only provides that it does not consider as unethical the continued use of the name of a deceased partner & allows such only when it’s
permissible by local custom. We don’t have a local custom allowing/permitting such. But remember that in our country, firm names identify the more
active and/or more senior members/partners of the law firm. Decision cited H.S. Drinker who said that use of deceased partner’s name is proper when
sustained by local custom & not where by custom this purports to identify the active members. And considering our idea of firm names in this country,
the use of a deceased partner’s name can lead to deception upon the public.
9. US Courts allow such because it’s sanctioned by their customs. Not so in our jurisdiction where there’s no local custom sanctioning the practice. Besides,
Courts take no judicial notice of custom, it must be proved as a fact, according to the rules of evidence. Juridical custom w/c can supplement statutory
law or be applied in the absence of such statute is different from social custom. Also, we have the Deen & Perkins cases. They’re part of our legal system
& no custom/practice to the contrary, even if proven, can prevail.
“The practice of law is not like an ordinary money-making trade. Being a profession, it’s practiced in a spirit of public service. A member of a profession
doesn’t regard himself as in competition w/his professional brethren. He’s not bartering his services. His service is often rendered for no equivalent/for a
trifling equivalent & it’s his pride to do what he does in a way worthy of his profession even if done w/no expectation of reward.”

Holding: Petitions denied. Petitioners advised to drop the names SYCIP and OZAETA from their respective firm names but names may be included in the
listing of individuals who have been partners in their firms indicating the years during w/c they served as such.
Fernando, Certification: Didn’t participate because he’s related by affinity to one of the senior partners of Sycip, Salzar. He wishes to invite attention to last
part of the dispositive portion. He believes it’s a happy compromise.
Aquino, dissenting: He believes that petitions should be granted on the condition that they indicate in their letterheads that the deceased partners are dead
or the period when they served as partners. It’s obvious that they want to do this to retain the clients who had customarily sought the legal services of
deceased partners & to benefit from the goodwill attached to these names. He believes that these are legitimate motivations. 
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 partner’s name in a professional firm’s name.

6. The continued use of the deceased partner’s 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)

CIR VS. SUTER

FACTS: A limited partnership named William J. Suter 'Morcoin' Co., Ltd was formed 30 September 1947 by William J. Suter as the general partner, and Julia
Spirig and Gustav Carlson. They contributed, respectively, P20,000.00, P18,000.00 and P2,000.00. it was also duly registered with the SEC. On 1948 Suter and
Spirig got married and in effect Carlson sold his share to the couple, the same was also registered with the SEC.

The limited partnership had been filing its income tax returns as a corporation, without objection by the herein petitioner, Commissioner of
Internal Revenue, until in 1959 when the latter, in an assessment, consolidated the income of the firm and the individual incomes of the partners-spouses
Suter and Spirig resulting in a determination of a deficiency income tax against respondent Suter in the amount of P2,678.06 for 1954 and P4,567.00 for
1955.

ISSUE: Whether or not the limited partnership has been dissolved after the marriage of Suter and Spirig and buying the interest of limited partner Carlson.

RULING: No, the limited partnership was not dissolved. “A husband and a wife may not enter into a contract of general copartnership, because under the
Civil Code, which applies in the absence of express provision in the Code of Commerce, persons prohibited from making donations to each other are
prohibited from entering into universal partnerships. (2 Echaverri 196) It follows that the marriage of partners necessarily brings about the dissolution of a
pre-existing partnership. “ What the law prohibits was when the spouses entered into a general partnership. In the case at bar, the partnership was limited.
Bache & Co. Inc. et al vs BIR Commissioner Vivencio Ruiz et al

16 11 2010 *

Search and Seizure – Personal Examination of the Judge

On 24 Feb 1970, Commissioner Vera of Internal Revenue, wrote a letter addressed to J Ruiz requesting the issuance of a search warrant against petitioners
for violation of Sec 46(a) of the NIRC, in relation to all other pertinent provisions thereof, particularly Sects 53, 72, 73, 208 and 209, and authorizing Revenue
Examiner de Leon make and file the application for search warrant which was attached to the letter. The next day, de Leon and his witnesses went to CFI
Rizal to obtain the search warrant. At that time J Ruiz was hearing a certain case; so, by means of a note, he instructed his Deputy Clerk of Court to take the
depositions of De Leon and Logronio. After the session had adjourned, J Ruiz was informed that the depositions had already been taken. The stenographer
read to him her stenographic notes; and thereafter, J Ruiz asked respondent Logronio to take the oath and warned him that if his deposition was found to be
false and without legal basis, he could be charged for perjury. J Ruiz signed de Leon’s application for search warrant and Logronio’s deposition. The search
was subsequently conducted.

ISSUE: Whether or not there had been a valid search warrant.

HELD: The SC ruled in favor of Bache on three grounds.

1. J Ruiz failed to personally examine the complainant and his witness.

Personal examination by the judge of the complainant and his witnesses is necessary to enable him to determine the existence or non-existence of a
probable cause.

2. The search warrant was issued for more than one specific offense.

The search warrant in question was issued for at least four distinct offenses under the Tax Code. As ruled in Stonehill “Such is the seriousness of the
irregularities committed in connection with the disputed search warrants, that this Court deemed it fit to amend Section 3 of Rule 122 of the former Rules of
Court that ‘a search warrant shall not issue but upon probable cause in connection with one specific offense.’ Not satisfied with this qualification, the Court
added thereto a paragraph, directing that ‘no search warrant shall issue for more than one specific offense.

3. The search warrant does not particularly describe the things to be seized.

The documents, papers and effects sought to be seized are described in the Search Warrant

“Unregistered and private books of accounts (ledgers, journals, columnars, receipts and disbursements books, customers ledgers); receipts for payments
received; certificates of stocks and securities; contracts, promissory notes and deeds of sale; telex and coded messages; business communications,
accounting and business records; checks and check stubs; records of bank deposits and withdrawals; and records of foreign remittances, covering the years
1966 to 1970.”

The description does not meet the requirement in Art III, Sec. 1, of the Constitution, and of Sec. 3, Rule 126 of the Revised Rules of Court, that the warrant
should particularly describe the things to be seized.

A search warrant may be said to particularly describe the things to be seized when the description therein is as specific as the circumstances will ordinarily
allow or when the description expresses a conclusion of fact not of law by which the warrant officer may be guided in making the search and seizure or when
the things described are limited to those which bear direct relation to BACHE & CO. VS. RUIZGR 32409, FEB. 27, 1971JUSTICE VILLAMORFACTS:

-----

Commissioner of Internal Revenue Vera wrote a letter addressed to Judge Vivencio M. Ruiz requesting theissuance of a search warrant against Bache& Co.
(Phil.), Inc. and Frederick E. Seggerman for violation of theNational Internal Revenue Code (NIRC) and authorizing Revenue Examiner Rodolfo de Leon to
make and filethe application for search warrant which was attached to the letter.-In the afternoon of the following day, De Leon and his witness, Arturo
Logronio, went to the Court of FirstInstance (CFI) of Rizal. They brought with them the following papers: Vera s letter-request; an applicationfor search
warrant already filled up but still unsigned by De Leon; an affidavit of Logronio subscribed beforeDe Leon; a deposition in printed form of Logronio already
accomplished and signed by him but not yetsubscribed; and a search warrant already accomplished but still unsigned by Judge Ruiz.

At that time Judge Ruiz was hearing a certain case; so, by means of a note, he instructed his Deputy Clerkof Court to take the depositions of De Leon and
Logronio. After the session had adjourned, Judge Ruiz wasinformed that the depositions had already been taken. The stenographer read to him her
stenographicnotes; and thereafter, Judge Ruiz asked respondent Logronio to take the oath and warned him that if hisdeposition was found to be false and
without legal basis, he could be charged for perjury.-The Judge signed de Leon s application for search warrant and Logronio s deposition. Search Warrant
wasthen signed by the judge and accordingly issued. 3 days later (a Saturday), the BIR agents served thesearch warrant to the corporation and Seggerman at
the offices of the corporation.

ISSUE:

WON the search warrant is valid.

HELD: Search warrant is invalid.

RATIO:

There was no personal examination conducted by the Judge of the complainant (De Leon) and hiswitness (Logronio). The judge did not ask either of the two
any question the answer to which could possiblybe the basis for determining whether or not there was probable cause against Bache & Co. andSeggerman.
The participation of the judge in the proceedings which led to the issuance of the search was thus limited to listening to the stenographer s readings of her
notes,to a few words of warning against the commission of perjury, and to administering the oath to thecomplainant and his witness. This cannot be
considered a personal examination. Personal examination bythe judge of the complainant and his witnesses is necessary to enable him to determine the
existence ornon-existence of a probable cause.Next, the search warrant was issued for more than one specific offense. The search warrant wasissued for at
least 4 distinct offenses under the Tax Code. As ruled in

Stonehill

Such is the seriousness of the irregularities committed in connection with the disputed search warrants, that this Court deemed it fitto amend Section 3 of
Rule 122 of the former Rules of Court that a search warrant shall not issue but uponprobable cause in connection with one specific offense. Not satisfied
with this qualification, the Courtadded thereto a paragraph, directing that no search warrant shall issue for more than one specific offense.Lastly, the search
warrant does not particularly describe the things to be seized.

the offense for which the warrant is being issued.

BATAAN SHIPYARD & ENGINEERING CO INC (BASECO) v PCGG

150 SCRA 181 NARVASA; May 27, 1987

NATURE SPECIAL CIVIL ACTION for certiorari and prohibition to review the order of the Presidential Commission on Good Government

FACTS - Challenged in this special civil action of certiorari and prohibition by a private corporation known as the Bataan Shipyard and Engineering Co., Inc.
are:

(1) Executive Orders Numbered 1 and 2, promulgated by President Aquino on February 28, 1986 and March 12, 1986

(2) the sequestration, takeover, and other orders issued, and acts done, in accordance with said executive orders by the Presidential Commission on Good
Government and/or its Commissioners and agents, affecting said corporation.

- BASECO prays that this Court

1) declare unconstitutional and void Executive Orders Numbered 1 and 2;

2) annul the sequestration order dated April 14, 1986, and all other orders subsequently issued and acts done on the basis thereof, inclusive of the takeover
order of July 14, 1986 and the termination of the services of the BASECO executives.

ISSUES

1. WON Executive No s 1, 2 and 14 are unconstitutional

2. WON right against self-incrimination can be invoked by BASECO

HELD

1. NO

Executive Order No. 1

> stresses the "urgent need to recover all ill-gotten wealth," and postulates that "vast resources of the government have been amassed by former President
Ferdinand E. Marcos, his immediate family, relatives, and close associates both here and abroad." Upon these premises, the Presidential Commission on
Good Government was created, "charged with the task of assisting the President in regard to (certain specified) matters, - among which was precisely

> In relation to the takeover or sequestration that it was authorized to undertake in the fulfillment of its mission, the PCGG was granted "power and
authority" to do the following particular acts, to wit:

1. "To sequester or place or cause to be placed under its control or possession any building or office wherein any ill-gotten wealth or properties may be
found, and any records pertaining thereto, in order to prevent their destruction, concealment or disappearance which would frustrate or hamper the
investigation or otherwise prevent the Commission from accomplishing its task.

2. "To provisionally take over in the public interest or to prevent the disposal or dissipation, business enterprises and properties taken over by the
government of the Marcos Administration or by entities or persons close to former President Marcos, until the transactions leading to such acquisition by the
latter can be disposed of by the appropriate authorities."

3. "To enjoin or restrain any actual or threatened commission of acts by any person or entity that may render moot and academic, or frustrate or otherwise
make ineffectual the efforts of the Commission to carry out its task under this order. "

> So that it might ascertain the facts germane to its objectives, it was granted power to conduct investigations, require submission of evidence by subpoenae
ad testification and duces tecum; administer oaths; punish for contempt. It was given power also to promulgate such rules and regulations as may be
necessary to carry out the purposes of (its creation). "

Executive Order No. 2

> gives additional and more specific data and directions respecting "the recovery of ill-gotten properties amassed by the leaders and supporters of the
previous regime." It declares that:

1) "* * the Government of the Philippines is in possession of evidence showing that there are assets and properties purportedly pertaining to former
Ferdinand E. Marcos, and/or his wife Mrs. Imelda Romualdez Marcos, their close relatives, subordinates, business associates, dummies, agents or nominees
which had been or were acquired by them directly or indirectly, through or as a result of the improper or illegal use of funds or properties owned by the
government of the Philippines or any of its branches, instrumentalities, enterprises, banks or financial institutions, or by taking undue advantage of their
office, authority, influence, connections or relationship, resulting in their unjust enrichment and causing grave damage and prejudice to the Filipino people
and the Republic of the Philippines; and

2) " * said assets and properties are in the form of bank accounts, deposits, trust accounts, shares of stocks, buildings, shopping centers, condominiums,
mansions, residences, estates, and other kinds of real and personal properties in the Philippines and in various countries of the world."

Upon these premises, the President

1) froze "all assets and properties in the Philippines in which former President Marcos and/or his wife, Mrs. Imelda Romualdez Marcos, their close relatives,
subordinates, business associates, dummies, agents, or nominees have any interest or participation"

2) prohibited former President Ferdinand Marcos and/or his wife * *, their close relatives, subordinates, business associates, dummies, agents, or nominees
from transferring, conveying, encumbering, concealing or dissipating said assets or properties in the Philippines and abroad

3) prohibited "any person from transferring conveying, encumbering or otherwise depleting or concealing such assets and properties or from assisting or
taking part in their transfer, encumbrance. concealment or dissipation under pain of such penalties as are prescribed by law;" and

4) required "all persons in the Philippines holding such assets or properties, whether located in the Philippines or abroad, in their names as nominees, agents
or trustees, to make full disclosure of the same to the Commission on Good Government within thirty (30) days from publication of * (the) Executive Order, "

Executive Order No. 14

> PCGG is empowered, "with the assistance of the Office of the Solicitor General and other government agencies, * * to file and prosecute all cases
investigated by it * * as may be warranted by its findings.'"34 All such cases, whether civil or criminal, are to be filed "with the Sandiganbayan, which shall
have exclusive and original jurisdiction thereof."

> "(c)ivil suits for restitution, reparation of damages, or indemnification for consequential damages, forfeiture proceedings provided for under Republic Act
No. 1379, or any other civil actions under the Civil Code or other existing laws, in connection with * * (said Executive Orders Numbered I and 2) may be filed
separately from and proceed independently of any criminal proceedings and may be proved by a preponderance of evidence;" and that, moreover, the
"technical rules of procedure and evidence shall not be strictly applied to* *(said) civil cases."

2. NO, there is No Violation of Right against Self-Incrimination

Ratio It is elementary that the right against self-incrimination has no application to juridical persons.

Reasoning

- BASECO contends that its right against self-incrimination and unreasonable searches and seizures had been transgressed by the Order of April 18, 1986
which required it "to produce corporate records from 1973 to 1986 under pain of contempt of the Commission if it fails to do so." The order was issued upon
the authority of Section 3 (e) of Executive Order No. 1, treating of the PCGG's power to "issue subpoenas requiring the production of such books,
papers,contracts, records, statements of accounts and other documents as may be material to the investigation conducted by the Commission," and
paragraph (3), Executive Order No. 2 dealing with its power to "(r)equire all persons in the Philippines holding * *(alleged "ill-gotten") assets or properties,
whether located in the Philippines or abroad, in their names as nominees, agents or trustees, to make full disclosure of the same **. "

- While an individual may lawfully refuse to answer incriminating questions unless protected by an immunity statute, it does not follow that a corporation,
vested with special privileges and franchises, may refuse to show its hand when charged with an abuse of such privileges

- Oklahoma Press Publishing Co. v. Walling

> corporations are not entitled to all of the constitutional protections which private individuals have. They are not at all within the privilege against self-
incriminatior, although this court more than once has said that the privilege runs very closely with the 4th Amendment's Search and Seizure provisions. It is
also settled that an officer of the company cannot refuse to produce its records in its possession, upon the plea that they will either incriminate him or may
incriminate it.

- Wilson v. United States

> The corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public. It received certain special privileges and
franchises, and holds them subject to the laws of the state and the limitations of its charter. Its powers are limited by law. It can make no contract not
authorized by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation. There is a reserve right in the
legislature to investigate its contracts and find out whether it has exceeded its powers. It would be a strange anomaly to hold that a state, having chartered a
corporation to make use of certain franchises, could not, in the exercise of sovereignty, inquire how these franchises had been employed, and whether they
had been abused, and demand the production of the corporate books and papers for that purpose. The defense amounts to this, that an officer of the
corporation which is charged with a criminal violation of the statute may plead the criminality of such corporation as a refusal to produce its books. To state
this proposition is to answer it. While an individual may lawfully refuse to answer incriminating questions unless protected by an immunity statute, it does
not follow that a corporation, vested with special privileges and franchises may refuse to show its hand when charged with an abuse of such privileges.

- At any rate, Executive Order No. 14-A, amending Section 4 of Executive Order No. 14 assures protection to individuals required to produce evidence before
the PCGG against any possible violation of his right against self-incrimination. It gives them immunity from prosecution on the basis of testimony or
information he is compelled to present. As amended, said Section 4 now provides that

"The witness may not refuse to comply with the order on the basis of his privilege against self-incrimination; but no testimony or other information
compelled under the order (or any information directly or indirectly derived from such testimony, or other information) may be used against the witness in
any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order."

-CASE DIGEST: BASECO VS. PCGG, GR NO. 75885, MAY 27, 1987

Facts:
(BASECO describes itself in its petition as “a shiprepair and shipbuilding company * * incorporated as a domestic private corporation * * (on Aug. 30, 1972)
by a consortium of Filipino shipowners and shipping executives. Its main office is at Engineer Island, Port Area, Manila, where its Engineer Island Shipyard is
housed, and its main shipyard is located at Mariveles Bataan.” 73 Its Articles of Incorporation disclose that its authorized capital stock is P60,000,000.00
divided into 60,000 shares, of which 12,000 shares with a value of P12,000,000.00 have been subscribed, and on said subscription, the aggregate sum of
P3,035,000.00 has been paid by the incorporators. 74 The same articles Identify the incorporators, numbering fifteen (15). By 1986, however, of these fifteen
(15) incorporators, six (6) had ceased to be stockholders. As of 1986, there were twenty (20) stockholders listed in BASECO’s Stock and Transfer Book.) When
EO 1 & 2 was promulgated by Pres. Corazon Aquino and respectively the sequestration, takeover and other orders in relation to the EO done by the PCGG to
the alleged Marcos controlled corporation which is BASECO. The problem arose when the sequestration order was initiated. The sequestration order was
directed to 3 commissioners of the PCGG directing them to sequester the following 1. Bataan Shipyard and Engineering Co., Inc. (Engineering Island Shipyard
and Mariveles Shipyard)

2. Baseco Quarry
3. Philippine Jai-Alai Corporation
4. Fidelity Management Co., Inc.
5. Romson Realty, Inc.
6. Trident Management Co.
7. New Trident Management
8. Bay Transport
9. And all affiliate companies of Alfredo “Bejo” Romualdez And were ordered to do the following:

1. To implement this sequestration order with a minimum disruption of these companies’ business activities.

2. To ensure the continuity of these companies as going concerns, the care and maintenance of these assets until such time that the Office of the President
through the Commission on Good Government should decide otherwise. 3. To report to the Commission on Good Government periodically. Further, you are
authorized to request for Military/Security Support from the Military/Police authorities, and such other acts essential to the achievement of this
sequestration order.

Thereafter, the corporation was ordered by the PCGG to produce certain documents such as:

1. Stock Transfer Book

2. Legal documents, such as:

2.1. Articles of Incorporation

2.2. By-Laws
2.3. Minutes of the Annual Stockholders Meeting from 1973 to 1986
2.4. Minutes of the Regular and Special Meetings of the Board of Directors from

1973 to 1986

2.5. Minutes of the Executive Committee Meetings from 1973 to 1986

2.6. Existing contracts with suppliers/contractors/others.

3. Yearly list of stockholders with their corresponding share/stockholdings from 1973 to

1986 duly certified by the Corporate Secretary.

4. Audited Financial Statements such as Balance Sheet, Profit & Loss and others from

1973 to December 31, 1985.

5. Monthly Financial Statements for the current year up to March 31, 1986.
6. Consolidated Cash Position Reports from January to April 15, 1986.
7. Inventory listings of assets up dated up to March 31, 1986.
8. Updated schedule of Accounts Receivable and Accounts Payable.
9. Complete list of depository banks for all funds with the authorized signatories for withdrawals thereof.
10. Schedule of company investments and placements.

Petitioner now prays to the Court to:

1) declare unconstitutional and void Executive Orders Numbered 1 and 2;
2) annul the sequestration order dated April- 14, 1986, and all other orders subsequently issued and acts done on the basis thereof, inclusive of the
takeover order of July 14, 1986 and the termination of the services of the BASECO executives.
3) the production of certain document infringed the right against self-incrimination
4) and that PCGG unduly interfered with its management and affairs and right of dominion.

Argument of BASECO: First, no notice and hearing was accorded * * (it) before its properties and business were taken over; Second, the PCGG is not a court,
but a purely investigative agency and therefore not competent to act as prosecutor and judge in the same cause; Third, there is nothing in the issuances
which envisions any proceeding, process or remedy by which petitioner may expeditiously challenge the validity of the takeover after the same has been
effected; and Fourthly, being directed against specified persons, and in disregard of the constitutional presumption of innocence and general rules and
procedures, they constitute a Bill of Attainder.”

Issues: 1. Whether or not the order of production of documents would be self3 incriminating to BASECO

2. Whether or not a corporation can avail the right against self-incrimination

3. Whether or not EO 1, 2 and 14 are constitutional
4. Whether or not PCGG had unduly interfered with its right of dominion and management of its business affairs by:

1) terminating its contract for security services with Fairways & Anchor, without the consent and against the will of the contracting parties; and
amending the mode of payment of entry fees stipulated in its Lease Contract with National Stevedoring & Lighterage Corporation, these acts being
in violation of the non-impairment clause of the constitution;
2) allowing PCGG Agent Silverio Berenguer to enter into an “anomalous contract” with Deltamarine Integrated Port Services, Inc., giving the latter free
use of BASECO premises;
3) authorizing PCGG Agent, Mayor Melba Buenaventura, to manage and operate its rock quarry at Sesiman, Mariveles;
 4) authorizing the same mayor to sell or dispose of its metal scrap, equipment, machinery and other materials;
5) authorizing the takeover of BASECO, Philippine Dockyard Corporation, and all their affiliated companies;
6) terminating the services of BASECO executives: President Hilario M. Ruiz; EVP Manuel S. Mendoza; GM Moises M. Valdez; Finance Mgr. Gilberto
Pasimanero; Legal Dept. Mgr. Benito R. Cuesta I;
7) planning to elect its own Board of Directors;
8) allowing willingly or unwillingly its personnel to take, steal, carry away from petitioner’s premises at Mariveles * * rolls of cable wires, worth
P600,000.00 on May 11, 1986;
9) allowing “indiscriminate diggings” at Engineer Island to retrieve gold bars supposed to have been buried therein.

Held:
ISSUES 1 & 2: The Court held that the right against self-incrimination has no application to corporations, extensively quoted in Bataan Shipyard from Wilson
v. United States, (55 4 L.Ed. 771, 780) thus: * * * The corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public. It
receives certain special privileges and franchises, and holds them subject to the laws of the state and the limitations of its charter. Its power are limited by
law. It can make no contract not authorized by its charter. Its right to act as a corporation are only preserved to it so long as it obeys the laws of its creation.
There is a reserve right in the legislature to investigate its contracts and find out whether it has exceeded its powers. It would be a strange anomaly to hold
that a state, having chartered a corporation to make use of certain franchises, could not, in the exercise of sovereignty, inquire how these franchises had
been employed, and whether they had been abused, and demand the production of the corporate books and papers for that purpose. The defense amounts
to this, that an officer of the corporation which is charged with a criminal violation of the statute may plead the criminality of such corporation as a refusal to
produce its books. To state this proposition is to answer it. While an individual may lawfully refuse to answer incriminating questions unless protected by an
immunity statute, it does not follow that a corporation, vested with special privileges, and franchise may refuse to show its hand when charged with an
abuse of such privileges. . . (150 SCRA 181, 234-235, quoting from Wilson v. United States, 55 Law Ed. 771, 780.) Every corporation is a direct creature of the
law and receives an individual franchise from the State. But a partnership, although is deemed to be a juridical person by grant of the State, becomes a
juridical person through a private contract of partnership between and among the partners, without needing to register its existence with the State or any of
its organs. More importantly, the partnership “person” is a fiction of law given more for the convenience of the partners, and thus can be dissolved by the
will of the partners or by the happening of an event that would constitute the termination of the contractual relationship, whereas, no corporation can be
dissolved without the consent of the State, and only after due notice and hearing. Likewise, the other features of the partnership, mainly mutual agency,
delectus personae and unlimited liability on the part of the partners, that places a close identity between the persons of the partners and that of the
partnership. This is unlike in corporate setting, where the stockholders do not own corporate properties, have no participation in management of corporate
affairs, and 5 enjoy personal immunity from the debts and liabilities of the corporation, and where basically the corporation “is its own person,” and acts
through a professional group of managers and agents called the Board of Directors.

While therefore it is understandable that a corporation, that has no heart, feels pain, and has no soul that can be damned, cannot be expected to be entitled
to the constitutional right against self-incrimination, it is quite different in the case of the partnership, since its person is merely an extension of the group of
partners, who having come together in business, and acting still for such business enterprise, could not be presumed to have waived their individual rights
against self-incrimination.

ISSUE 4: Scope and Extent of Powers of the PCGG

One other question remains to be disposed of, that respecting the scope and extent of the powers that may be wielded by the PCGG with regard to the
properties or businesses placed under sequestration or provisionally taken over. Obviously, it is not a question to which an answer can be easily given, much
less one which will suffice for every conceivable situation.

a. PCGG May Not Exercise Acts of Ownership

One thing is certain, and should be stated at the outset: the PCGG cannot exercise acts of dominion over property sequestered, frozen or provisionally taken
over. AS already earlier stressed with no little insistence, the act of sequestration; freezing or provisional takeover of property does not import or bring about
a divestment of title over said property; does not make the PCGG the owner thereof. In relation to the property sequestered, frozen or provisionally taken
over, the PCGG is a conservator, not an owner. Therefore, it can not perform acts of strict ownership; and this is specially true in the situations contemplated
by the sequestration rules where, unlike cases of receivership, for example, no court exercises effective supervision or can upon due application and hearing,
grant authority for the performance of acts of dominion. Equally evident is that the resort to the provisional remedies in question should entail the least
possible interference with business operations or activities so that, in the event that the accusation of the business enterprise being “ill gotten” be not
proven, it may be returned to its rightful owner as far as possible in the same condition as it was at the time of sequestration.

b. PCGG Has Only Powers of Administration

The PCGG may thus exercise only powers of administration over the property or business sequestered or provisionally taken over, much like a court-
appointed receiver, 115 such as to bring and defend actions in its own name; receive rents; collect debts due; pay outstanding debts; and generally do such
other acts and things as may be necessary to fulfill its mission as conservator and administrator. In this context, it may in addition enjoin or restrain any
actual or threatened commission of acts by any person or 6 entity that may render moot and academic, or frustrate or otherwise make ineffectual its efforts
to carry out its task; punish for direct or indirect contempt in accordance with the Rules of Court; and seek and secure the assistance of any office, agency or
instrumentality of the government. 116 In the case of sequestered businesses generally (i.e., going concerns, businesses in current operation), as in the case
of sequestered objects, its essential role, as already discussed, is that of conservator, caretaker, “watchdog” or overseer. It is not that of manager, or
innovator, much less an owner.
c. Powers over Business Enterprises Taken Over by Marcos or Entities or Persons
Close to him; Limitations Thereon

Now, in the special instance of a business enterprise shown by evidence to have been “taken over by the government of the Marcos Administration or by
entities or persons close to former President Marcos,” 117 the PCGG is given power and authority, as already adverted to, to “provisionally take (it) over in
the public interest or to prevent * * (its) disposal or dissipation;” and since the term is obviously employed in reference to going concerns, or business
enterprises in operation, something more than mere physical custody is connoted; the PCGG may in this case exercise some measure of control in the
operation, running, or management of the business itself. But even in this special situation, the intrusion into management should be restricted to the
minimum degree necessary to accomplish the legislative will, which is “to prevent the disposal or dissipation” of the business enterprise. There should be no
hasty, indiscriminate, unreasoned replacement or substitution of management officials or change of policies, particularly in respect of viable establishments.
In fact, such a replacement or substitution should be avoided if at all possible, and undertaken only when justified by demonstrably tenable grounds and in
line with the stated objectives of the PCGG. And it goes without saying that where replacement of management officers may be called for, the greatest
prudence, circumspection, care and attention - should accompany that undertaking to the end that truly competent, experienced and honest managers may
be recruited. There should be no role to be played in this area by rank amateurs, no matter how wen meaning. The road to hell, it has been said, is paved
with good intentions. The business is not to be experimented or played around with, not run into the ground, not driven to bankruptcy, not fleeced, not
ruined. Sight should never be lost sight of the ultimate objective of the whole exercise, which is to turn over the business to the Republic, once judicially
established to be “ill-gotten.” Reason dictates that it is only under these conditions and circumstances that the supervision, administration and control of
business enterprises provisionally taken over may legitimately be exercised.

d. Voting of Sequestered Stock; Conditions Therefor

So, too, it is within the parameters of these conditions and circumstances that the PCGG may properly exercise the prerogative to vote sequestered stock of
corporations, granted to it by the President of the Philippines through a Memorandum dated June 26, 1986. That Memorandum authorizes the PCGG,
“pending the outcome of proceedings to determine the ownership of * * (sequestered) shares of stock,” “to vote such shares of stock as it may have
sequestered in corporations at all stockholders’ meetings called for the election of directors, declaration of dividends, amendment of the Articles of 7
Incorporation, etc.” The Memorandum should be construed in such a manner as to be consistent with, and not contradictory of the Executive Orders earlier
promulgated on the same matter. There should be no exercise of the right to vote simply because the right exists, or because the stocks sequestered
constitute the controlling or a substantial part of the corporate voting power. The stock is not to be voted to replace directors, or revise the articles or by-
laws, or otherwise bring about substantial changes in policy, program or practice of the corporation except for demonstrably weighty and defensible
grounds, and always in the context of the stated purposes of sequestration or provisional takeover, i.e., to prevent the dispersion or undue disposal of the
corporate assets. Directors are not to be voted out simply because the power to do so exists. Substitution of directors is not to be done without reason or
rhyme, should indeed be shunned if at an possible, and undertaken only when essential to prevent disappearance or wastage of corporate property, and
always under such circumstances as assure that the replacements are truly possessed of competence, experience and probity. In the case at bar, there was
adequate justification to vote the incumbent directors out of office and elect others in their stead because the evidence showed prima facie that the former
were just tools of President Marcos and were no longer owners of any stock in the firm, if they ever were at all. This is why, in its Resolution of October 28,
1986; this Court declared that —

Petitioner has failed to make out a case of grave abuse or excess of jurisdiction in respondents’ calling and holding of a stockholders’ meeting for the election
of directors as authorized by the Memorandum of the President * * (to the PCGG) dated June 26, 1986, particularly, where as in this case, the government
can, through its designated directors, properly exercise control and management over what appear to be properties and assets owned and belonging to the
government itself and over which the persons who appear in this case on behalf of BASECO have failed to show any right or even any shareholding in said
corporation.

It must however be emphasized that the conduct of the PCGG nominees in the BASECO Board in the management of the company’s affairs should henceforth
be guided and governed by the norms herein laid down. They should never for a moment allow themselves to forget that they are conservators, not owners
of the business; they are fiduciaries, trustees, of whom the highest degree of diligence and rectitude is, in the premises, required.

25. No Sufficient Showing of Other Irregularities

As to the other irregularities complained of by BASECO, i.e., the cancellation or revision, and the execution of certain contracts, inclusive of the termination
of the employment of some of its executives, 119 this Court cannot, in the present state of the evidence on record, pass upon them. It is not necessary to do
so. The issues arising therefrom may and will be left for initial determination in the appropriate action. But the Court will state that absent any showing of
any important cause therefor, it will not normally substitute its judgment for that of the PCGG in these individual transactions. It is clear however, that as
things now stand, the petitioner cannot be said to have established the 8 correctness of its submission that the acts of the PCGG in question were done
without or in excess of its powers, or with grave abuse of discretion.

ISSUE 3: The impugned executive orders are avowedly meant to carry out the explicit command of the Provisional Constitution, ordained by Proclamation
No. 3, 23 that the President-in the exercise of legislative power which she was authorized to continue to wield “(until a legislature is elected and convened
under a new Constitution” — “shall give priority to measures to achieve the mandate of the people,” among others to recover ill-gotten properties amassed
by the leaders and supporters of the previous regime and protect the interest of the people through orders of sequestration or freezing of assets or accounts.”

Executive Order No. 1 stresses the “urgent need to recover all ill-gotten wealth,” and postulates that “vast resources of the government have been amassed
by former President Ferdinand E. Marcos, his immediate family, relatives, and close associates both here and abroad.”
Executive Order No. 2 gives additional and more specific data and directions respecting “the recovery of ill-gotten properties amassed by the leaders and
supporters of the previous regime.”

A third executive order is relevant: Executive Order No. 14, 33 by which the PCGG is empowered, “with the assistance of the Office of the Solicitor General
and other government agencies, * * to file and prosecute all cases investigated by it * * as may be warranted by its findings.”

LUZVIMINDA J. VILLAREAL, DIOGENES VILLAREAL and CARMELITO JOSE, petitioners,

vs.
DONALDO EFREN C. RAMIREZ and Spouses CESAR G. RAMIREZ JR. and CARMELITA C. RAMIREZ,respondents.

G.R. No. 144214 July 14, 2003

Subject: BusOrg 1

A share in a partnership can be returned only after the completion of the latter’s dissolution, liquidation and winding up of the business.

Facts:

Luzviminda J. Villareal, Carmelito Jose and Jesus Jose formed a partnership with a capital of P750,000 for the operation of a restaurant and catering business
under the name “Aquarius Food House and Catering Services.” Villareal was appointed general manager and Carmelito Jose, operations manager.
Respondent Donaldo Ramirez joined as a partner on September 5, 1984 with a capital contribution of P250,000 which was paid by his parents, Respondents
Cesar and Carmelita Ramirez. Jesus Jose withdrew from the partnership and his capital contribution of P250,000 was refunded to him in cash by agreement
of the partners.

In the same month, without prior knowledge of respondents, petitioners closed down the restaurant, allegedly because of increased rental. The restaurant
furniture and equipment were deposited in the respondents’ house for storage. On March 1, 1987, respondent spouses wrote petitioners, saying that they
were no longer interested in continuing their partnership or in reopening the restaurant, and that they were accepting the latter’s offer to return their capital
contribution. Respondent wrote another letter informing petitioners of the deterioration of the restaurant furniture and equipment stored in their house.
She also reiterated the request for the return of their one-third share in the equity of the partnership. The repeated oral and written requests were,
however, left unheeded.

Respondents filed before the RTC for the collection of a sum of money from petitioners. Petitioners contended that respondents had expressed a desire to
withdraw from the partnership and had called for its dissolution under Articles 1830 and 1831; that respondents had been paid, upon the turnover to them
of furniture and equipment worth over P400,000; and that the latter had no right to demand a return of their equity because their share, together with the
rest of the capital of the partnership, had been spent as a result of irreversible business losses.

In their Reply, respondents alleged that had not received any regular report or accounting from the latter, who had solely managed the business.
Respondents also alleged that they expected the equipment and the furniture stored in their house to be removed by petitioners as soon as the latter found
a better location for the restaurant. RTC 17 ruled that the parties had voluntarily entered into a partnership, which could be dissolved at any time. Petitioners
clearly intended to dissolve it when they stopped operating the restaurant. Hence, the trial court rendered a judgment in favor of respondents and ordering
the petitioners to pay jointly and severally.

Issue: WON petitioners are liable to respondents for the latter’s share in the partnership

Held:

The Petition has merit. Both the trial and the appellate courts found that a partnership had indeed existed, and that it was dissolved on March 1, 1987. They
found that the dissolution took place when respondents informed petitioners of the intention to discontinue. Respondents consequently demanded from
petitioners the return of their one-third equity in the partnership. We hold that respondents have no right to demand from petitioners the return of their
equity share. Except as managers of the partnership, 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.

The amount to be refunded is necessarily limited to its total resources. In other words, it can only pay out what it has in its coffers, which consists of all its
assets. However, before the partners can be paid their shares, the creditors of the partnership must first be compensated. After all the creditors have been
paid, whatever is left of the partnership assets becomes available for the payment of the partners’ shares.

Evidently, in the present case, 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.

LUZVIMINDA J. VILLAREAL, DIOGENES VILLAREAL and CARMELITO JOSE, petitioners, vs. DONALDO EFREN C. RAMIREZ and Spouses CESAR G. RAMIREZ JR.
and CARMELITA C. RAMIREZ, respondents. [G.R. No. 144214. July 14, 2003]

A share in a partnership can be returned only after the completion of the latter’s dissolution, liquidation and winding up of the business.

Facts: On July 25, 1984Luzviminda J. Villareal, Carmelito Jose and Jesus Jose formed a partnership with a capital of P750,000 for the operation of a restaurant
and catering business. Villareal was appointed general manager and Carmelito Jose, operations manager. Respondent Donaldo Efren C. Ramirez
subsequently joined as a partner in the business.
Jesus Jose withdrew from the partnership in January 1987, his capital contribution of was refunded to him in cash. In the same month, without prior
knowledge of respondents, petitioners closed down the restaurant, allegedly because of increased rental. The restaurant furniture and equipment were
deposited in the respondents’ house for storage.

Respondents informed petitioners of the intention to discontinue it because of the former’s dissatisfaction with, and loss of trust in, the latter’s management
of the partnership affairs. Respondents consequently demanded from petitioners the return of their one-third equity in the partnership.

The RTC ruled that the parties had voluntarily entered into a partnership, which could be dissolved at any time. The CA held that, although respondents had
no right to demand the return of their capital contribution, the partnership was nonetheless dissolved when petitioners lost interest in continuing the
restaurant business with them.

Issue: Whether or not petitioners are liable to respondents for the latter’s share in the partnership.

Held: NO. We hold that respondents have no right to demand from petitioners the return of their equity share. Except as managers of the partnership,
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.

Since it is the partnership, as a separate and distinct entity, that must refund the shares of the partners, the amount to be refunded is necessarily limited to
its total resources. In other words, it can only pay out what it has in its coffers, which consists of all its assets. However, before the partners can be paid
their shares, the creditors of the partnership must first be compensated. After all the creditors have been paid, whatever is left of the partnership assets
becomes available for the payment of the partners’ shares.

Petitioners argue that respondents acted negligently by permitting the partnership assets in their custody to deteriorate to the point of being almost
worthless. The delivery of the store furniture and equipment to private respondents was for the purpose of storage. They were unaware that the restaurant
would no longer be reopened by petitioners. Hence, the former cannot be faulted for not disposing of the stored items to recover their capital investment.

TAI TONG CHUACHE & CO v. INSURANCE COMMISSION and TRAVELLERS MULTI-INDEMNITY CORPORATION
158 SCRA 366
GANCAYCO; February 29, 1988

NATURE
Petition for review on certiorari of the decision of the Insurance Commission

FACTS
- Complainants Palomo acquired a parcel of land and a building located in Davao City. They assumed the mortgage of the building in favor of SSS, which
building was insured with respondent SSS Accredited Group of Insurers for P25K.
- On April 19, 1975, Azucena Palomo obtained a P100K loan from Tai Tong Chuache Inc. (TTCC) and executed a mortgage over the land and the building in
favor of Tai Tong Chuache & Co. as security of payment .On April 25, 1975, Arsenio Chua, representative of TTCC insured the latter's interest with Travellers
Multi-Indemnity Corporation (Travellers) for P100K (P70K for bldg and P30K for the contents thereof)
- On June 11, 1975, Pedro Palomo secured a Fire Insurance Policy, covering the building for P50K with respondent Zenith Insurance Corporation (ZIC).
Another Fire Insurance Policy was later procured from respondent Philippine British Assurance Company (PBAC), covering the same building for P50K and
contents thereof for P70K. On July 31, 1975, the building and the contents were totally razed by fire.
- Based on the computation of the loss, including the Travellers, respondents, ZIC, PBAC, and SSS paid their corresponding shares of the loss. Complainants
were paid the following: P41,546.79 by PBAC, P11,877.14 by ZIC, and P5,936.57 by SSS. Demand was made from respondent Travellers for its share in the
loss but was refused. Hence, complainants demanded from the other 3 respondents the balance of each share in the loss based on the computation
excluding Travellers Multi-Indemnity in the amount of P30,894.31 (P5,732.79-ZIC: P22,294.62, PBAC: and P2,866.90, SSS) but was refused, hence, this action.

ISSUE
WON petitioner Tai Tong has insurable interest in the said policy

HELD
YES
- First, respondent insurance commission based its findings on mere inference. Respondent Insurance Commission absolved respondent insurance company
from liability on the basis of the certification issued by the then CFI, that in a certain civil action against the Palomos, Arsenio Lopez Chua stands as the
complainant and not Tai Tong Chuache. From said evidence respondent commission inferred that the credit extended by herein petitioner to the Palomos
secured by the insured property must have been paid. Such is a glaring error which this Court cannot sanction.
- Second, it has been held in a long line of cases that when the creditor is in possession of the document of credit, he need not prove non-payment for it is
presumed. The validity of the insurance policy taken b petitioner was not assailed by private respondent. Moreover, petitioner's claim that the loan extended
to the Palomos has not yet been paid was corroborated by Azucena Palomo who testified that they are still indebted to herein petitioner. So at the time of
the fire, petitioner as mortgagee still had insurable interest therein.
- And third, petitioner's declaration that Arsenio Lopez Chua acts as the managing partner of the partnership was corroborated by respondent insurance
company. Thus Chua as the managing partner of the partnership may execute all acts of administration including the right to sue debtors of the partnership
in case of their failure to pay their obligations when it became due and demandable. Or at the least, Chua being a partner of petitioner Tai Tong Chuache &
Company is an agent of the partnership. Being an agent, it is understood that he acted for and in behalf of the firm.
Disposition Appealed decision SET ASIDE and ANOTHER judgment is rendered order private respondent Travellers to pay petitioner the face value of Fire
Insurance Policy in the amount of P100K. Costs against said private respondent.
G.R. No. 127347 November 25, 1999
ALFREDO N. AGUILA, JR., vs. HONORABLE COURT OF APPEALS and FELICIDAD S. VDA. DE ABROGAR
Facts:
Petitioner is the manager of A.C. Aguila & Sons, Co., a partnership engaged in lending activities. Private respondent and her late husband, Ruben M. Abrogar,
were the registered owners of a house and lot, covered by Transfer Certificate of Title No. 195101, in Marikina, Metro Manila. On April 18, 1991, private
respondent, with the consent of her late husband, and A.C. Aguila & Sons, Co., represented by petitioner, entered into a Memorandum of Agreement.
On the same day, April 18, 1991, the parties likewise executed a deed of absolute sale, 3 dated June 11, 1991, wherein private respondent, with the consent
of her late husband, sold the subject property to A.C. Aguila & Sons, Co., represented by petitioner, for P200,000,00. In a special power of attorney dated the
same day, April 18, 1991, private respondent authorized petitioner to cause the cancellation of TCT No. 195101 and the issuance of a new certificate of title
in the name of A.C. Aguila and Sons, Co., in the event she failed to redeem the subject property as provided in the Memorandum of Agreement. 4
Private respondent failed to redeem the property within the 90-day period as provided in the Memorandum of Agreement. Hence, pursuant to the special
power of attorney mentioned above, petitioner caused the cancellation of TCT No. 195101 and the issuance of a new certificate of title in the name of A.C.
Aguila and Sons, Co. 5
Private respondent then received a letter dated August 10, 1991 from Atty. Lamberto C. Nanquil, counsel for A.C. Aguila & Sons, Co., demanding that she
vacate the premises within 15 days after receipt of the letter and surrender its possession peacefully to A.C. Aguila & Sons, Co. Otherwise, the latter would
bring the appropriate action in court. 6
Upon the refusal of private respondent to vacate the subject premises, A.C. Aguila & Sons, Co. filed an ejectment case against her in the Metropolitan Trial
Court, Branch 76, Marikina, Metro Manila. In a decision, dated April 3, 1992, the Metropolitan Trial Court ruled in favor of A.C. Aguila & Sons, Co. on the
ground that private respondent did not redeem the subject property before the expiration of the 90-day period provided in the Memorandum of Agreement.
Private respondent appealed first to the Regional Trial Court, Branch 163, Pasig, Metro Manila, then to the Court of Appeals, and later to this Court, but she
lost in all the cases.
Private respondent then filed a petition for declaration of nullity of a deed of sale with the Regional Trial Court, Branch 273, Marikina, Metro Manila on
December 4, 1993. She alleged that the signature of her husband on the deed of sale was a forgery because he was already dead when the deed was
supposed to have been executed on June 11, 1991.
It appears, however, that private respondent had filed a criminal complaint for falsification against petitioner with the Office of the Prosecutor of Quezon
City which was dismissed in a resolution, dated February 14, 1994.
ISSUE: WON petitioner is a real party in interest but A.C. Aguila & Co., against which this case should have been brought.
HELD: No.
Under Art. 1768 of the Civil Code, a partnership "has a juridical personality separate and distinct from that of each of the partners." 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. 10 In this case, private respondent has not shown that A.C. Aguila & Sons, Co., as a separate juridical entity, is being used for fraudulent,
unfair, or illegal purposes. Moreover, the title to the subject property is in the name of A.C. Aguila & Sons, Co. and the Memorandum of Agreement was
executed between private respondent, with the consent of her late husband, and 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. A violation of this rule will result
in the dismissal of the complaint. 11 We cannot understand why both the Regional Trial Court and the Court of Appeals sidestepped this issue when it was
squarely raised before them by petitioner.

SMITH, BELL & CO. vs NATIVIDAD (Malcolm, J.)

40 Phil 136, 144-145 (1919)

Facts:
-Smith, Bell & Co. is a corporation organized and existing under the laws of the Philippine Islands; majority of the stockholders are British; owner of a motor
vessel known as the Bato—brought to Cebu for the purpose of transporting Smith, Bell & Co.’s merchandise between ports in the islands.
-application for registration was made at Cebu at the Collector of Customs---denied. Because they were not citizens of the US/Phils.
-Act 2671, Sec. 1172. Certificate ofPhilippine Register.—upon registration of a vessel of domestic ownership, and of more than 15 tons gross, a certificate of
Philippine register shall be issued for it. If the vessel is of domestic ownership and of 15 tons gross or less, the taking of the certificate of Philippine register
shall be optional with the owner.
-domestic ownership, as used in this section, means ownership vested in the (a) citizens or native inhabitants of the Phil Islands; (b) citizens of the US residing
in the Phil. Islands; (c) any corporation or company composed wholly of citizen of Phils./US or both
-plaintiff’s contention: Act No. 2671 deprives the corp. of its property without due process of law because by the passage of the law, the company was
automatically deprived of every beneficial attribute of ownership of the Bato and that they are left with a naked title they could not use.
Issue: WON Smith, Bell & Co. were denied of the due process of law by the Phil. Legislature in its enactment of Act 2761.
Ruling: No. (judgment affirmed—plaintiff can’t be granted registry.)
RD: Act No. 2761, in denying to corporations such as Smith, Bell & Co. Ltd., the right to register vessels in the Phils. Coastwide trade, falls within the
authorized exceptions. Specifically within the purview of the police power. Literally and absolutely, steamship lines are the arteries of the commerce in the
Phils. If one be severed, the lifeblood of the nation is lost. If these are protected, security of the country and general welfare is sustained.

G.R. No. L-55397 February 29, 1988

Lessons Applicable: When Insurable Interest Must Exist (Insurance)

Laws Applicable:

FACTS:

 Azucena Palomo bought a parcel of land and building from Rolando Gonzales and assumed a mortgage of the building in favor of S.S.S. which was
insured with S.S.S. Accredited Group of Insurers
  April 19, 1975: Azucena Palomo obtained a loan from Tai Tong Chuache Inc. in the amount of P100,000 and to secure it, the land and building was
mortgaged
 June 11, 1975: Pedro Palomo secured a Fire Insurance Policy covering the building for P50,000 with Zenith Insurance Corporation
 July 16, 1975: another Fire Insurance policy was procured from Philippine British Assurance Company, covering the same building for P50,000 and
the contents thereof for P70,000
 Before the occurrence of the peril insured against the Palomos had already paid their credit due the
 July 31, 1975: building and the contents were totally razed by fire
 Palomo was able to claim P41,546.79 from Philippine British Assurance Co., P11,877.14 from Zenith Insurance Corporation and P5,936.57 from
S.S.S. Group of Accredited Insurers but Travellers Multi-Indemnity refused so it demanded the balance from the other three but they refused so
they filed against them
 Insurance Commission, CFI: absolved Travellers on the basis that Arsenio Cua was claiming and NOT Tai Tong Chuache
 Palomo Appealed
o Travellers reasoned that the policy is endorsed to Arsenio Chua, mortgage creditor
o Tai Tong Chuache & Co. filed a complaint in intervention claiming the proceeds of the fire Insurance Policy issued by travellers
o affirmative defense of lack of insurable interest that before the occurrence of the peril insured against the Palomos had already paid their
credit due the petitioner

ISSUE: W/N Tai Tong Chuache & Co. has insurable interest

HELD: YES. Travellers Multi-Indemnity Corporation to pay Tai Tong Chuache & Co.

 when the creditor is in possession of the document of credit, he need not prove non-payment for it is presumed
o The validity of the insurance policy taken b petitioner was not assailed by private respondent. Moreover, petitioner's claim that the loan
extended to the Palomos has not yet been paid was corroborated by Azucena Palomo who testified that they are still indebted to herein
petitioner
 Chua being a partner of petitioner Tai Tong Chuache & Company is an agent of the partnership. Being an agent, it is understood that he acted for
and in behalf of the firm
 Upon its failure to prove the allegation of lack of insurable interest on the part of the petitioner, Travellers must be held liable