JOSEFINA P. REALUBIT vs. PROSENCIO D.

JASO and EDENG JASO

G.R. No. 178782 September 21, 2011

FACTS
Petitioner Josefina Realubit entered into a Joint Venture Agreement with
Francis Eric Amaury Biondo, a French national, for the operation of an ice
manufacturing business. With Josefina as the industrial partner and Biondo as the
capitalist partner, the parties agreed that they would each receive 40% of the net
profit, with the remaining 20% to be used for the payment of the ice making
machine which was purchased for the business. For and in consideration of the
sum of P500,000.00, however, Biondo subsequently executed a Deed of
Assignment transferring all his rights and interests in the business in favor of
respondent Eden Jaso, the wife of respondent Prosencio Jaso. With Biondo’s
eventual departure from the country, the Spouses Jaso caused their lawyer to send
Josefina a letter apprising her of their acquisition of said Frenchmans share in the
business and formally demanding an accounting and inventory thereof as well as
the remittance of their portion of its profits.

Faulting Josefina with unjustified failure to heed their demand, the

Spouses Jaso commenced the instant suit for specific performance, accounting,
examination, audit and inventory of assets and properties, dissolution of the joint
venture, appointment of a receiver and damages. The said complaint alleged that
the Spouses Realubit had no gainful occupation or business prior to their joint
venture with Biondo and that aside from appropriating for themselves the income
of the business, they have fraudulently concealed the funds and assets thereof
thru their relatives, associates or dummies. The Spouses Realubit claimed that
they have been engaged in the tube ice trading business under a single
proprietorship even before their dealings with Biondo.

The RTC rendered its Decision discounting the existence of sufficient

evidence from which the income, assets and the supposed dissolution of the joint
venture can be adequately reckoned. Upon the finding, however, that the Spouses
Jaso had been nevertheless subrogated to Biondos rights in the business in view
of their valid acquisition of the latters share as capitalist partner. On appeal before
the CA, the foregoing decision was set aside
upon the following findings that the Spouses Jaso validly acquired Biondos share
in the business which had been transferred to and continued its operations and
not dissolved as claimed by the Spouses Realubit.

ISSUES
1. Whether there was a valid assignment or rights to the joint venture
2. Whether the joint venture is a contract of partnership
3. Whether Jaso acquired the title of being a partner based on the Deed of
Assignment

RULING
1. Yes. As a public document, the Deed of Assignment Biondo executed in
favor of Eden not only enjoys a presumption of regularity but is also
considered prima facie evidence of the facts therein stated. A party assailing the
authenticity and due execution of a notarized document is, consequently, required
to present evidence that is clear, convincing and more than merely preponderant.
In view of the Spouses Realubits failure to discharge this onus, we find that both
the RTC and the CA correctly upheld the authenticity and validity of said Deed of
Assignment upon the combined strength of the above-discussed disputable
presumptions and the testimonies elicited from Eden and Notary Public Rolando
Diaz.
2. Yes. Generally understood to mean an organization formed for some
temporary purpose, a joint venture is likened to a particular partnership or one
which has for its object determinate things, their use or fruits, or a specific
undertaking, or the exercise of a profession or vocation. The rule is settled that
joint ventures are governed by the law on partnerships which are, in turn, based
on mutual agency or delectus personae.

3. No. It is evident that the transfer by a partner of his partnership interest

does not make the assignee of such interest a partner of the firm, nor entitle the
assignee to interfere in the management of the partnership business or to receive
anything except the assignees profits. The assignment does not purport to transfer
an interest in the partnership, but only a future contingent right to a portion of the
ultimate residue as the assignor may become entitled to receive by virtue of his
proportionate interest in the capital. Since a partner’s interest in the partnership
includes his share in the profits, we find that the CA committed no reversible error
in ruling that the Spouses Jaso are entitled to Biondos share in the profits, despite
Juanitas lack of consent to the assignment of said Frenchmans interest in the joint
venture. Although Eden did not, moreover, become a partner as a consequence of
the assignment and/or acquire the right to require an accounting of the partnership
business, the CA correctly granted her prayer for dissolution of the joint venture
conformably with the right granted to the purchaser of a partner’s interest under
Article 1831 of the Civil Code.

PANG LIM and BENITO GALVEZ, plaintiffs-appellees,

vs.
LO SENG, defendant-appellant.

the question whether, admitting the lease to be so binding, it can be terminated

by the plaintiffs

While yet a partner in the firm of Lo Seng and Co., Pang Lim participated in the
creation of this
lease, and when he sold out his interest in that firm to Lo Seng this operated as
a transfer to Lo
Seng of Pang Lim's interest in the firm assets, including the lease; and Pang Lim
cannot now be
permitted, in the guise of a purchaser of the estate, to destroy an interest
derived from himself, and
for which he has received full value.
The bad faith of the plaintiffs in seeking to deprive the defendant of this lease is
strikingly revealed in
the circumstance that prior to the acquisition of this property Pang Lim had been
partner with Lo
Seng and Benito Galvez an employee. Both therefore had been in relations of
confidence with Lo
Seng and in that position had acquired knowledge of the possibilities of the
property and possibly an
experience which would have enabled them, in case they had acquired
possession, to exploit the
distillery with profit. On account of his status as partner in the firm of Lo Seng
and Co., Pang Lim
knew that the original lease had been extended for fifteen years; and he knew
the extent of valuable
improvements that had been made thereon. Certainly, as observed in the
appellant's brief, it would
be shocking to the moral sense if the condition of the law were found to be such
that Pang Lim, after
profiting by the sale of his interest in a business, worthless without the lease,
could intervene as
purchaser of the property and confiscate for his own benefit the property which
he had sold for a
valuable consideration to Lo Seng. The sense of justice recoils before the mere
possibility of such
eventuality.
Above all other persons in business relations, partners are required to exhibit
towards each other the
highest degree of good faith. In fact the relation between partners is essentially
fiduciary, each being
considered in law, as he is in fact, the confidential agent of the other. It is
therefore accepted as
fundamental in equity jurisprudence that one partner cannot, to the detriment of
another, apply
exclusively to his own benefit the results of the knowledge and information
gained in the character of
partner. Thus, it has been held that if one partner obtains in his own name and
for his own benefit
the renewal of a lease on property used by the firm, to commence at a date
subsequent to the
expiration of the firm's lease, the partner obtaining the renewal is held to be a
constructive trustee of
the firm as to such lease. (20 R. C. L., 878-882.) And this rule has even been
applied to a renewal
taken in the name of one partner after the dissolution of the firm and pending its
liquidation. (16 R. C.
L., 906; Knapp vs.Reed, 88 Neb., 754; 32 L. R. A. [N. S.], 869; Mitchell vs. Reed
61 N. Y., 123; 19
Am. Rep., 252.)