FACTS:

On the 5th of April 1998, Nenita A. Anay filed Civil Case No. 88-509, a complaint for sum of
money with damages8 against Marjorie D. Tocao and William Belo before the Regional Trial
Court of Makati, Branch 140. On Bankok Thailand, private respondent Nenita A. Anay met the
Vice-president for operations of Ultra Clean Water Purifier William T. Belo who introduced the
respondent to Marjorie Tocao. Marjorie opened up her plans in entering into a joint venture in
the importation and local distribution of kitchen cook wares. Belo was their financer and acted as
their capitalist, Tocao as the president and Anay as the head of marketing department and later
vice-president for sales. It was agreed that Anay would be entitled of ten percent (10%) of the
annual net profits of the business; (2) overriding commission of six percent (6%) of the overall
weekly production; (3) thirty percent (30%) of the sales she would make; and (4) two percent
(2%) for her demonstration services. Although the agreement was not supported by a written
evidence due to the strength of Belo’s assurances that he was sincere and can be trusted when it
comes to financial commitments. The business name’s Geminesse Enterprise was registered in
Marjorie Tocao’s name as sole proprietorship with the office located at 712 Rufino Building,
Ayala Avenue, Makati City. Anay was invited to join a distributor/dealer meeting in West Bend,
Wiasconsin U.S.A by Roger Muencheberg. The petitioner Tocao then approved Anay to attend
the said meeting attached with a letter having the statement “"Ms. Nenita D. Anay (sic), who has
been patronizing and supporting West Bend Co. for twenty (20) years now, acquired the
distributorship of Royal Queen cookware for Geminesse Enterprise, is the Vice President Sales
Marketing and a business partner of our company, will attend in response to the invitation. On
October 7, 1997, Belo signed a memo entitling Anay a 37% commission on her personal sales up
to Dec 31 of the same year which is apart from her 10% share in the profits. However on Oct 9,
1987 Anay knew that Tocao had signed a letter to Cubao sales office that Anay shall no longer
be the Vice-president of Geminesse Enterprise. On Oct 10 she received a note that Tocao had
barred her from holding office and conducting demonstrations in both Makati and Cubao offices.
On April 5, 1988 Anay filed for legal actions stating that the defendants namely Marjorie Tocao
and William Belo be ordered to pay her jointly and severally with the ff: P 32,000.00 for the
unpaid commissions from Jan 8 1988 to February 5, 1988. P 100,000 for moral damages,
P100,000 for exemplary damages, and audit of the finances of Geminesse Enterprise from the
inception of its business operation until she was "illegally dismissed" to determine her ten
percent (10%) share in the net profits. She further prayed that she be paid the five percent (5%)
"over riding commission" on the remaining 150 West Bend cookware sets before her
"dismissal." On the other hand the petitioner’s party claims that the “alleged agreement” with the
respondent was “neither reduces, nor ratified” was “either unenforceable or void or inexistent”
On their pre-trial conference the petitioner Belo denied that the respondent was supposed to
receive a share of the profit of the business. He also denied contributing capital to the business
and had been receiving a share in its profits as he is only a guarantor of Marjorie Tocao. As for
Marjorie Tocao she has also denied being into an oral partnership agreement with the
respondent, however she affirms that they granted her commissions but not giving her shares in
net profits.
Issue:
(a) Whether or not a partnership exists ?
(b) Whether or not there was an employer-employee relationship between the plaintiff,
Marjorie Tocao and Belo?
(c) Whether or not the parties are entitled to damages?

RULINGS:
A. Yes, the Supreme Court affirms that there was a business partnership that existed
between both parties. To be considered a juridical personality, a partnership must
fulfill these requisites: (1) two or more persons bind themselves to contribute money,
property or industry to a common fund; and (2) intention on the part of the partners
to divide the profits among themselves.15 It may be constituted in any form; a public
instrument is necessary only where immovable property or real rights are contributed
thereto. This implies that since a contract of partnership is consensual, an oral
contract of partnership is as good as a written one. Where no immovable property or
real rights are involved, what matters is that the parties have complied with the
requisites of a partnership. The fact that there appears to be no record in the
Securities and Exchange Commission of a public instrument embodying the
partnership agreement pursuant to Article 1772 of the Civil Code17 did not cause the
nullification of the partnership. It was said that the contribution of the private
respondent in her expertise to the partnership, under the law, she was an industrial or
managing partner.

B. No, The business venture operated under Geminesse Enterprise did not result in an
employer-employee relationship between petitioners and private respondent. Under
the testimony of petitioner Tocoa she mentioned that she treated Anay as her equal
which makes it unbelievable that the employer Tocoa would have the same amount
received with her employee. In a partnership, each partner must share in the profits
and losses of the venture, except that the industrial partner shall not be liable for the
losses.31 As an industrial partner, private respondent had the right to demand for a
formal accounting of the business and to receive her share in the net profit. Without a
doubt the petitioner excluded private respondent from the partnership to reap for
herseld and for petitioner Belo financial gains resulting from the efforts of Anay in
making the business a successful one. The partnership that was formed exists until it
will be dissolved by law, since the partnership that they had has no fixed term, and is
a partnership at will made by their mutual desire and consent, it may be dissolved by
the will of a partner.
 C. Yes, as affirmed and modified by the Supreme Court. The previous order from the
Trial Court and Court of Appeals which stated that the respondent Nenita Anay is entitled to
receive the equitable amount for the damages caused by the petitioners such as: 1. Petitioners are
ordered to submit to the Regional Trial Court a formal account of the partnership affairs for the
years 1987 and 1988, pursuant to Article 1809 of the Civil Code, in order to determine private
respondent’s ten percent (10%) share in the net profits of the partnership;

2. Petitioners are ordered, jointly and severally, to pay private respondent five percent (5%)
overriding commission for the one hundred and fifty (150) cookware sets available for
disposition since the time private respondent was wrongfully excluded from the partnership by
petitioners;

3. Petitioners are ordered, jointly and severally, to pay private respondent overriding commission
on the total production which, for the period covering January 8, 1988 to February 5, 1988,
amounted to P32,000.00;

4. Petitioners are ordered, jointly and severally, to pay private respondent moral damages in the
amount of P50,000.00, exemplary damages in the amount of P50,000.00 and attorney’s fees in
the amount of P25,000.00.
B.
Answer the following questions.

1. How was the partnership formed?

-It was formed by merely the will of both parties, when Belo introduced Nenita Anay to Marjorie
Tocao which happened to be the girlfriend of William Belo. With the eagerness to form a joint
venture Marjorie opened up doing a joint venture given Nenita Anay’s expertise in the field. Belo
acted as the capitalist and volunteered in financing the joint venture. Nenita Anay was said to be
the head of the marketing department and later on became the Vice-president while Marjorie
Tocao as the President. From here an oral partnership was formed.

2. Was the concept of delectus personarum discussed in the case? How Was it discussed?

-The concept of delectus personarum was not expressly stated in the case, however given the facts and
the statements from the case, I am able to affirm that the concept of delectus personarum was present.
Theoretically it was Belo who brought Anay to Tocao, but even though it was Belo who introduced Anay
to Tocao, still Tocao was the one to decide whether or not she will enter into a joint venture with Anay
in the first place, it could also be that she’d decline the offer made by Belo, yet she did not since she
knew that the expertise of Anay in marketing is also of big help to the business.

3. Did the court impose damages? If so to whom?

The court imposed damages to the petitioner’s party namely William Belo and Marjorie Tocao with the
amount equitable to the damages including the commissions that was not received by Nenita Anay.