Aurelio Litonjua Jr vs Eduardo Litonjua Sr.
et al
Aurelio and Eduardo are brothers. In 1973, Aurelio alleged that  Eduardo
entered into a contract of partnership with him. Aurelio showed as evidence a
letter sent to him by Eduardo that the latter is allowing Aurelio to manage
their family business (if Eduardo’s away) and in exchange thereof he will be
giving Aurelio P1 million or 10% equity, whichever is higher. A
memorandum was subsequently made for the said partnership agreement.
The memorandum this time stated that in exchange of Aurelio, who just got
married, retaining his share in the family business (movie theatres, shipping
and land development) and some other immovable properties, he will be
given P1 Million or 10% equity in all these businesses and those to be
subsequently acquired by them whichever is greater.
In 1992 however, the relationship between the brothers went sour. And so
Aurelio demanded an accounting and the liquidation of his share in the
partnership. Eduardo did not heed and so Aurelio sued Eduardo.
ISSUE: Whether or not there exists a partnership.
HELD: No. The partnership is void and legally nonexistent. The
documentary evidence presented by Aurelio, i.e. the letter from Eduardo and
the Memorandum, did not prove partnership.
The 1973 letter from Eduardo on its face, contains typewritten entries,
personal in tone, but is unsigned and undated. As an unsigned document,
there can be no quibbling that said letter does not meet the public
instrumentation requirements exacted under Article 1771 (how partnership is
constituted) of the Civil Code. Moreover, being unsigned and doubtless
referring to a partnership involving more than P3,000.00 in money or
property, said letter cannot be presented for notarization, let alone registered
with the Securities and Exchange Commission (SEC), as called for under the
Article 1772 (capitalization of a partnership) of the Code. And inasmuch as
the inventory requirement under the succeeding Article 1773 goes into the
matter of validity when immovable property is contributed to the partnership,
the next logical point of inquiry turns on the nature of Aurelio’s contribution,
if any, to the supposed partnership.
The Memorandum is also not a proof of the partnership for the same is not a
public instrument and again, no inventory was made of the immovable
property and no inventory was attached to the Memorandum. Article 1773 of
the Civil Code requires that if immovable property is contributed to the
partnership an inventory shall be had and attached to the contract.
Marjorie Tacao and Wiliiam Velo vs CA & Nenita Anay
GR 127405 October 4, 2000
William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The
three agreed to form a joint venture for the sale of cooking wares. Belo was
to contribute P2.5 million; Tocao also contributed some cash and she shall
also act as president and general manager; and Anay shall be in charge of
marketing. Belo and Tocao specifically asked Anay because of her
experience and connections as a marketer. They agreed further that Anay
shall receive the following:
1. 10% share of annual net profits
2. 6% overriding commission for weekly sales
3. 30% of sales Anay will make herself
4. 2% share for her demo services
They operated under the name Geminesse Enterprise, this name was however
registered as a sole proprietorship with the Bureau of Domestic Trade under
Tocao. The joint venture agreement was not reduced to writing because Anay
trusted Belo’s assurances.
The venture succeeded under Anay’s marketing prowess.
But then the relationship between Anay and Tocao soured. One day, Tocao
advised one of the branch managers that Anay was no longer a part of the
company. Anay then demanded that the company be audited and her shares
be given to her.
ISSUE: Whether or not there is a partnership.
HELD: Yes, even though it was not reduced to writing, for a partnership can
be instituted in any form. The fact that it was registered as a sole
proprietorship is of no moment for such registration was only for  the
company’s trade name.
Anay was not even an employee because when they ventured into the
agreement, they explicitly agreed to profit sharing this is even though Anay
was receiving commissions because this is only incidental to her efforts as a
head marketer.
The Supreme Court also noted that a partner who is excluded wrongfully
from a partnership is an innocent partner. Hence, the guilty partner must give
him his due upon the dissolution of the partnership as well as damages or
share in the profits “realized from the appropriation of the partnership
business and goodwill.” An innocent partner thus possesses “pecuniary
interest in every existing contract that was incomplete and in the trade name
of the co-partnership and assets at the time he was wrongfully expelled.”
An unjustified dissolution by a partner can subject him to action for damages
because by the mutual agency that arises in a partnership, the doctrine
of delectus personae allows the partners to have the power, although not
necessarily the right to dissolve the partnership.
Tocao’s unilateral exclusion of Anay from the partnership is shown by her
memo to the Cubao office plainly stating that Anay was, as of October 9,
1987, no longer the vice-president for sales of Geminesse Enterprise. By that
memo, petitioner Tocao effected her own withdrawal from the partnership
and considered herself as having ceased to be associated with the partnership
in the carrying on of the business. Nevertheless, the partnership was not
terminated thereby; it continues until the winding up of the business.
 
 
G.R. No. 126881             October 3, 2000
HEIRS OF TAN ENG KEE, petitioners, vs. COURT OF APPEALS and
BENGUET LUMBER COMPANY, represented by its President TAN ENG
LAY,respondents.
Business Organization – Partnership, Agency, Trust – Periodic Accounting –
Profit Sharing 
Benguet Lumber has been around even before World War II but during the
war, its stocks were confiscated by the Japanese. After the war, the brothers
Tan Eng Lay and Tan Eng Kee pooled their resources in order to revive the
business. In 1981, Tan Eng Lay caused the conversion of Benguet Lumber
into a corporation called Benguet Lumber and Hardware Company, with him
and his family as the incorporators. In 1983, Tan Eng Kee died. Thereafter,
the heirs of Tan Eng Kee demanded for an accounting and the liquidation of
the partnership.
Tan Eng Lay denied that there was a partnership between him and his
brother. He said that Tan Eng Kee was merely an employee of Benguet
Lumber. He showed evidence consisting of Tan Eng Kee’s payroll; his SSS
as an employee and Benguet Lumber being the employee. As a result of the
presentation of said evidence, the heirs of Tan Eng Kee filed a criminal case
against Tan Eng Lay for allegedly fabricating those evidence. Said criminal
case was however dismissed for lack of evidence.
ISSUE: Whether or not Tan Eng Kee is a partner.
HELD: No. There was no certificate of partnership between the brothers.
The heirs were not able to show what was the agreement between the
brothers as to the sharing of profits. All they presented were circumstantial
evidence which in no way proved partnership.
It is obvious that there was no partnership whatsoever.  Except for a firm
name, there was no firm account, no firm letterheads submitted as evidence,
no certificate of partnership, no agreement as to profits and losses, and no
time fixed for the duration of the partnership.  There was even no attempt to
submit an accounting corresponding to the period after the war until Kee’s
death in 1984.  It had no business book, no written account nor any
memorandum for that matter and no license mentioning the existence of a
partnership.
In fact, Tan Eng Lay was able to show evidence that Benguet Lumber is a
sole proprietorship. He registered the same as such in 1954; that Kee was just
an employee based on the latter’s payroll and SSS coverage, and other
records indicating Tan Eng Lay as the proprietor.
Also, the business definitely amounted to more P3,000.00 hence if there was
a partnership, it should have been made in a public instrument.
But the business was started after the war (1945) prior to the publication of
the New Civil Code in 1950?
Even so, nothing prevented the parties from complying with this
requirement.
Also, the Supreme Court emphasized that for 40 years, Tan Eng Kee never
asked for an accounting. The essence of a partnership is that the partners
share in the profits and losses. Each has the right to demand an accounting as
long as the partnership exists. Even if it can be speculated that a scenario
wherein “if excellent relations exist among the partners at the start of the
business and all the partners are more interested in seeing the firm grow
rather than get immediate returns, a deferment of sharing in the profits is
perfectly plausible.” But in the situation in the case at bar, the deferment, if
any, had gone on too long to be plausible.  A person is presumed to take
ordinary care of his concerns. A demand for periodic accounting is evidence
of a partnership which Kee never did.
The Supreme Court also noted:
In determining whether a partnership exists, these rules shall apply:
(1) Except as provided by Article 1825, persons who are not partners as to
each other are not partners as to third persons;
(2) Co-ownership or co-possession does not of itself establish a partnership,
whether such co-owners or co-possessors do or do not share any profits made
by the use of the property;
(3) The sharing of gross returns does not of itself establish a partnership,
whether or not the persons sharing them have a joint or common right or
interest in any property which the returns are derived;
(4) The receipt by a person of a share of the profits of a business is prima
facie evidence that he is a partner in the business, but no such inference shall
be drawn if such profits were received in payment:
(a) As a debt by installment or otherwise;
(b) As wages of an employee or rent to a landlord;
(c) As an annuity to a widow or representative of a deceased partner;
(d) As interest on a loan, though the amount of payment vary with
the profits of the business;
(e) As the consideration for the sale of a goodwill of a business or
other property by installments or otherwise.
VICENTE SY, TRINIDAD PAULINO, 6B’S TRUCKING
CORPORATION, and SBT TRUCKING CORPORATION, petitioners,
vs. HON. COURT OF APPEALS and JAIME SAHOT, respondents.
[G.R. No. 142293. February 27, 2003]
FACTS: Sometime in 1958, private respondent Jaime Sahot[5] started
working as a truck helper for petitioners’ family-owned trucking business
named Vicente Sy Trucking. In 1965, he became a truck driver of the same
family business, renamed T. Paulino Trucking Service, later 6B’s Trucking
Corporation in 1985, and thereafter known as SBT Trucking Corporation
since 1994. Throughout all these changes in names and for 36 years, private
respondent continuously served the trucking business of petitioners. When
Sahot was 59 years old, he incurred several absences due to various ailments.
Particularly causing him pain was his left thigh, which greatly affected the
performance of his task as a driver. He inquired about his medical and
retirement benefits with the Social Security System (SSS) on April 25, 1994,
but discovered that his premium payments had not been remitted by his
employer.Sahot filed a week-long leave to get medical attention. He was
treated for EOR, presleyopia, hypertensive retinopathy G II and heart
enlargement. Because of such, Belen Paulino of the SBT Trucking Service
management told him to file a formal request for extension of his leave.
When Sahot applied for an extended leave, he was threatened of termination
of employment should he refuse to go back to work. Eventually, Sahot was
dismissed from employment which prompted the latter to file an illegal
dismissal case with the NLRC. For their part, petitioners admitted they had a
trucking business in the 1950s but denied employing helpers and drivers.
They contend that private respondent was not illegally dismissed as a driver
because he was in fact petitioner’s industrial partner. They add that it was not
until the year 1994, when SBT Trucking Corporation was established, and
only then did respondent Sahot become an employee of the company, with a
monthly salary that reached P4,160.00 at the time of his separation. The
NLRC and the CA ruled that Sahot was an employee of the petitioner.
ISSUE: Whether Sahot is an industrial partner
RULING:
No. Article 1767 of the Civil Code states that in a contract of partnership two
or more persons bind themselves to contribute money, property or industry to
a common fund, with the intention of dividing the profits among themselves.
Not one of these circumstances is present in this case. No written agreement
exists to prove the partnership between the parties. Private respondent did not
contribute money, property or industry for the purpose of engaging in the
supposed business. There is no proof that he was receiving a share in the
profits as a matter of course, during the period when the trucking business
was under operation. Neither is there any proof that he had actively
participated in the management, administration and adoption of policies of
the business. Thus, the NLRC and the CA did not err in reversing the finding
of the Labor Arbiter that private respondent was an industrial partner from
1958 to 1994. On this point, the Court affirmed the findings of the appellate
court and the NLRC. Private respondent Jaime Sahot was not an industrial
partner but an employee of petitioners from 1958 to 1994. The existence of
an employer-employee relationship is ultimately a question of fact and the
findings thereon by the NLRC, as affirmed by the Court of Appeals, deserve
not only respect but finality when supported by substantial evidence.
Substantial evidence is such amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion.
Guy v. Court of Appeals
G.R. No. 163707, September 15, 2006
On June 13, 1997, private respondent-minors Karen Oanes Wei and
Kamille Oanes Wei, represented by their mother Remedios Oanes,
filed a petition for letters of administration before the Regional Trial
Court of Makati City, Branch 138.
Private respondents alleged that they are the duly acknowledged
illegitimate children of Sima Wei, who died intestate in Makati City on
October 29, 1992, leaving an estate valued at P10,000,000.00
consisting of real and personal properties. His known heirs are his
surviving spouse Shirley Guy and children, Emy, Jeanne, Cristina,
George and Michael, all surnamed Guy. Private respondents prayed
for the appointment of a regular administrator for the orderly
settlement of Sima Wei’s estate. They likewise prayed that, in the
meantime, petitioner Michael C. Guy, son of the decedent, be
appointed as Special Administrator of the estate. Attached to private
respondents’ petition was a Certification Against Forum Shopping
signed by their counsel, Atty. Sedfrey A. Ordoñez.
In his Comment/Opposition, petitioner prayed for the dismissal of the
petition. He asserted that his deceased father left no debts and that his
estate can be settled without securing letters of administration pursuant
to Section 1, Rule 74 of the Rules of Court. He further argued that
private respondents should have established their status as
illegitimate children during the lifetime of Sima Wei pursuant
to Article 175 of the Family Code.
In a Manifestation/Motion as Supplement to the Joint Motion to
Dismiss, petitioner and his co-heirs alleged that private
respondents’ claim had been paid, waived, abandoned or otherwise
extinguished by reason of Remedios’ June 7, 1993 Release and Waiver
of Claim stating that in exchange for the financial and educational
assistance received from petitioner, Remedios and her minor of Sima Wei, it cannot be construed as a waiver of
children discharge the estate of Sima Wei from any and all liabilities. successional rights.

ISSUE: Whether or not the private respondents are barred by
prescription from proving their filiation
HELD: No. In the present case, private respondents could not have
possibly waived their successional rights because they are yet to prove
their status as acknowledged illegitimate children of the deceased.
Petitioner himself has consistently denied that private respondents are
his co-heirs. It would thus be inconsistent to rule that they
waived their hereditary rights when petitioner claims that they do not
have such right. Hence, petitioner’s invocation of waiver on the part of
private respondents must fail.
Moreover, even assuming that Remedios truly waived the hereditary
rights of private respondents, such waiver will not bar the
latter’s claim. Article 1044 of the Civil Code, provides:
ART. 1044. Any person having the free disposal of his property may
accept or repudiate an inheritance.
Any inheritance left to minors or incapacitated persons may be
accepted by their parents or guardians. Parents or guardians may
repudiate the inheritance left to their wards only by
judicial authorization.

Anent the issue on private respondents’ filiation, the Court agree with
the Court of Appeals that a ruling on the same would be premature
considering that private respondents have yet to present evidence. As
regards Remedios’ Release and Waiver of Claim, the same does not
bar private respondents from claiming successional rights. To be valid
and effective, a waiver must be couched in clear and unequivocal
terms which leave no doubt as to the intention of a party to give up a
right or benefit which legally pertains to him. A waiver may not be
attributed to a person when its terms do not explicitly and clearly
evince an intent to abandon a right.

In this case, the Supreme Court find that there was no waiver of
hereditary rights. The Release and Waiver of Claim does not state with
clarity the purpose of its execution. It merely states that Remedios
received P300,000.00 and an educational plan for her
minor daughters “by way of financial assistance and in full settlement
of any and all claims of whatsoever nature and kind against the estate
of the late Rufino Guy Susim.” Considering that the document did not
specifically mention private respondents’ hereditary share in the estate
G.R. No. 143340       August 15, 2001
LILIBETH SUNGA-CHAN and CECILIA SUNGA, petitioners,  vs.
LAMBERTO T. CHUA, respondent.
Business  Organization – Partnership, Agency, Trust – Prescription –
Demand for an accounting – Oral Partnership  FACTS: Lim Tong Lim requested Peter Yao and Antonio Chuato
In 1977, Chua and Jacinto Sunga verbally agreed to form a partnership
for the sale and distribution of Shellane LPGs. Their business was very
profitable but in 1989 Jacinto died. Upon Jacinto’s death, his daughter
Lilibeth took over the business as well as the business assets. Chua
then demanded for an accounting but Lilibeth kept on evading him. In
1992 however, Lilibeth gave Chua P200k. She said that the same
represents a partial payment; that the rest will come after she finally
made an accounting. She never made an accounting so in 1992, Chua
filed a complaint for “Winding Up of Partnership Affairs, Accounting,
Appraisal and Recovery of Shares and Damages with Writ of
Preliminary Attachment” against Lilibeth.
Lilibeth in her defense argued among others that Chua’s action has
prescribed.
ISSUE: Whether or not Chua’s claim is barred by prescription.
[G.R. No. 136448. November 3, 1999]
LIM TONG LIM, petitioner, vs. PHILIPPINE FISHING GEAR
INDUSTRIES, INC., respondent.
engage in commercial fishing with him. The three agreed to purchase
two fishing boats but since they do not have the money they borrowed
from one Jesus Lim the brother of Lim Tong Lim. Subsequently, they
again borrowed money for the purchase of fishing nets and other
fishing equipments. Yao and Chua represented themselves as acting in
behalf of “Ocean Quest Fishing Corporation” (OQFC) and they
contracted with Philippine Fishing Gear Industries (PFGI) for the
purchase of fishing nets amounting to more than P500k. However,
they were unable to pay PFGI and hence were sued in their own names
as Ocean Quest Fishing Corporation is a non-existent corporation.
Chua admitted his liability while Lim Tong Lim refused such liability
alleging that Chua and Yao acted without his knowledge and consent
in representing themselves as a corporation.

HELD: No. The action for accounting filed by Chua three (3) years ISSUE: Whether Lim Tong Lim is liable as a partner 
after Jacinto’s death was well within the prescribed period.   The Civil
Code provides that an action to enforce an oral contract prescribes in
six (6) years while the right to demand an accounting for a partner’s
HELD: Yes. It is apparent from the factual milieu that the three
interest as against the person continuing the business accrues at the
decided to engage in a fishing business. Moreover, their Compromise
date of dissolution, in the absence of any contrary agreement.
Agreement had revealed their intention to pay the loan with the
Considering that the death of a partner results in the dissolution of the
proceeds of the sale and to divide equally among them the excess or
partnership, in this case, it was after Jacinto’s death that Chua as the
loss. The boats and equipment used for their business entails their
surviving partner had the right to an account of his interest as against
common fund. The contribution to such fund need not be cash or fixed
Lilibeth.  It bears stressing that while Jacinto’s death dissolved the
assets; it could be an intangible like credit or industry. That the parties
partnership, the dissolution did not immediately terminate the
agreed that any loss or profit from the sale and operation of the boats
partnership.  The Civil Code expressly provides that upon dissolution,
would be divided equally among them also shows that they had indeed
the partnership continues and its legal personality is retained until the
formed a partnership. The principle of corporation by estoppel cannot
complete winding up of its business, culminating in its termination.
apply in the case as Lim Tong Lim also benefited from the use of the
nets in the boat, which was an asset of the partnership. Under the law
on estoppel, those acting in behalf of a corporation and those benefited
by it, knowing it to be without valid existence are held liable as
general partners. Hence, the question as to whether such was legally
formed for unknown reasons is immaterial to the case.
G.R. No. 144214             July 14, 2003
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.
Business Organization – Partnership, Agency, Trust – Dissolution and
Winding Up – Need for Accounting Proceedings to Determine
Partner’s Share
In 1984, Villareal, Carmelito Jose and Jesus Jose, formed a partnership
for the purpose of operating a restaurant. Each contributed
P250,000.00. In 1984, Ramirez was added as a partner after he
contributed P250,000.00. In 1987, Jesus withdrew from the partnership
and his capital share of P250k was returned to him as agreed upon by
the other partners.
Thereafter, the restaurant suffered losses. Without informing Ramirez,
Villareal and Carmelito shut down the restaurant. They then turned
over the restaurant equipments to Ramirez.
Later, Ramirez sent a letter to Villareal and Carmelito telling them
he’s no longer interested in being a partner and that he’s demanding
his shares in the partnership. Villareal and Carmelito ignored the
request of Ramirez hence the latter sued them.
In their defense, Villareal and Carmelito said that the restaurant
equipments served as payment to Ramirez when they were delivered to
them; that Ramirez cannot ask for share in equity because the
restaurant incurred debts (P240,658.00) and irreversible business
losses. Ramirez argued by saying that the equipments were merely
placed in their house for storage as the two partners allegedly searched
for a better restaurant location; that he was not aware of any losses or
any indebtedness because he never took part in the management of the
restaurant.
The trial court ruled in favor of Ramirez. The Court of Appeals
affirmed the trial court and it further ordered Villareal and Carmelito
to pay Ramirez P253,114.00. The computation was done as follows:
(Original Partnership Capital – Partnership Debt = Partnership Asset)
÷ Number of partners; hence: (P1,000,000.00 – P240,658.00 =
P759,342.00) ÷ 3 = P253,114.00.
Issues
On closer scrutiny, the issues are as follows: (1) whether petitioners
are liable to respondents for the latter’s share in the partnership; (2)
whether the CA’s computation of P253,114 as respondents’ share is
correct; and (3) whether the CA was likewise correct in not assessing
costs.
This Court’s Ruling
The Petition has merit.
Share in Partnership
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 it because of the former’s
dissatisfaction with, and loss of trust in, the latter’s management of the
partnership affairs. These findings were amply supported by the
evidence on record. 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.”[23] Since the capital was contributed to the
partnership, not to petitioners, it is the partnership that must refund the
equity of the retiring partners.[24]
G.R. No. 167379             June 27, 2006
PRIMELINK PROPERTIES AND DEVELOPMENT CORPORATION
and RAFAELITO W. LOPEZ, Petitioners,  vs. MA. CLARITA T.
LAZATIN-MAGAT, JOSE SERAFIN T. LAZATIN, JAIME TEODORO
T. LAZATIN and JOSE MARCOS T. LAZATIN, Respondents.
Business Organization – Partnership, Agency, Trust – Dissolution and
Winding Up – Joint Venture Agreement – Rights of Innocent Party 
In 1994, Primelink Properties and the Lazatin siblings entered into a
joint venture agreement whereby the Lazatins  shall contribute a huge
parcel of land and Primelink shall develop the same into a subdivision.
For 4 years however, Primelink failed to develop the said land. So in
1998, the Lazatins filed a complaint to rescind the joint venture
agreement with prayer for preliminary injunction. In said case,
Primelink was declared in default or failing to file an answer and for
asking multiple motions for extension. The trial court eventually ruled
in favor of the Lazatins and it ordered Primelink to return the
possession of said land to the Lazatins as well as some improvements
which Primelink had so far over the property without the Lazatins
paying for said improvements. This decision was affirmed by the
Court of Appeals. Primelink is now assailing the order; that turning
over improvements to the Lazatins without reimbursement is unjust;
that the Lazatins did not ask the properties to be placed under their
possession but they merely asked for rescission.
ISSUE: Whether or not the improvements made by Primelink should
also be turned over under the possession of the Lazatins.
HELD: Yes. In the first place, even though the Lazatins did
specifically pray for possession the same (placing of improvements
under their possession) is incidental in the relief they prayed for. They
are therefore entitled possession over the parcel of land plus the
improvements made thereon made by Primelink.
In this jurisdiction, joint ventures are governed by the laws of
partnership. Under the laws of partnership, when a partnership is
dissolved, as in this case when the trial court rescinded the joint
venture agreement, the innocent party has the right to wind up the
partnership affairs.
With the rescission of the JVA on account of petitioners’ fraudulent
acts, all authority of any partner to act for the partnership is terminated
except so far as may be necessary to wind up the partnership affairs or
to complete transactions begun but not yet finished.  On dissolution,
the partnership is not terminated but continues until the winding up of
partnership affairs is completed.  Winding up means the administration
of the assets of the partnership for the purpose of terminating the
business and discharging the obligations of the partnership.
It must be stressed, too, that although the Lazatins acquired possession
of the lands and the improvements thereon, the said lands and
improvements remained partnership property, subject to the rights and
obligations of the parties, inter se, of the creditors and of third parties
and subject to the outcome of the settlement of the accounts between
the parties, absent any agreement of the parties in their JVA to the
contrary (here no agreement in the JVA as to winding up).  Until the
partnership accounts are determined, it cannot be ascertained how
much any of the parties is entitled to, if at all.
Quiao v. Quiao, G.R. No. 183622, July 4, 2012
FACTS: Brigido Quiao (petitioner) and Rita Quiao (respondent) contracted marriage
in 1977. They had no separate properties prior to their marriage. During the course of
said marriage, they produced four children. In 2000, Rita filed a complaint against
Brigido for legal separation for cohabiting with another woman. Subsequently, the
RTC rendered a decision in 2005 declaring the legal separation of the parties
pursuant to Article 55. Save for one child (already of legal age), the three minor
children remains in the custody of Rita, who is the innocent spouse.
The properties accrued by the spouses shall be divided equally between them subject
to the respective legitimes of their children; however, Brigido’s share of the net
profits earned by the conjugal partnership shall be forfeited in favor of their children
in accordance to par. 9 of Article 129 of the FC.
A few months thereafter, Rita filed a motion for execution, which was granted by the
trial court. By 2006, Brigido paid Rita with regards to the earlier decision; the writ
was partially executed.
After more than 9 months later, Brigido filed a motion for clarification asking the
RTC to define “Nets Profits Earned.” In answer, the court held that the phrase
denotes “the remainder of the properties of the parties after deducting the separate
properties of each of the spouses and debts.”
Upon a motion for reconsideration, it initially set aside its previous decision stating
that NET PROFIT EARNED shall be computed in accordance with par. 4 of Article
102 of the FC. However, it later reverted to its original Order, setting aside the last
ruling.
ISSUE: Whether or not the regime of conjugal partnership of gains governs the
couple’s property relations
HELD: Yes. Brigido and Rita tied the knot on January 6, 1977. Since at the time of
exchange of martial vows, the operative law was the NCC and since they did not
agree on a marriage settlement, the property relations between them is the system of
relative community or the conjugal partnership of gains. Under this property relation,
“the husband and wife place in a common fund the fruits of their separate property
and the income from their work and industry. The husband and wife also own in
common all the property of the conjugal partnership of gains.