G.R. No.

L-17295             July 30, 1962 ANG PUE & COMPANY, ET AL vs. SECRETARY OF
COMMERCE AND INDUSTRY

FACTS:
Ang Pue and Tan Siong organized a partnership for a term of 5 years. Their agreement provides that they
can extend the partnership for another 5 years by mutual consent. In 1954, RA 1180 was enacted to
regulate the retail business. Said law provided that, after its enactment, a partnership not wholly formed by
Filipinos could continue to engage in the retail business until the expiration of its term so registration of said
Ang was refused on the ground that the extension was in violation of the aforesaid Act.

Plaintiff Company filed a petition for declaratory relief contending their original articles of partnership
provided that they could extend the term of their partnership; that it constitutes a property right of which the
partners cannot be deprived without due process or without their consent; and that the provisions of RA
1180 cannot adversely affect them. Lower court dismissed their petition. Plaintiff Co. interposed an appeal.

ISSUE:
WON extension of the partnership established before the enactment of RA 1180, is in violation of the said
act.

HELD:
The SC ruled that organizing a corporation is not a matter of right but a mere privilege which may be
enjoyed under the terms provided by state / law. When the partners amended the articles of partnership,
the provisions of RA 1180 were already in force, and so the right claimed by plaintiff appellants to extend
the original term of their partnership to another five years would be in violation of the clear intent and
purpose of the said law.To organize a corporation or a partnership that could claim a juridical personality of
its own and transact business as such, is not a matter of absolute right but a privilege which may be
enjoyed only under such terms as the State may deem necessary to impose. That the State, through
Congress, and in the manner provided by law, had the right to enact Republic Act No. 1180 and to provide
therein that only Filipinos and concerns wholly owned by Filipinos may engage in the retail business cannot
be seriously disputed. That this provision was clearly intended to apply to partnership already existing at
the time of the enactment of the law is clearly showing by its provision giving them the right to continue
engaging in their retail business until the expiration of their term or life.To argue that because the original
articles of partnership provided that the partners could extend the term of the partnership, the provisions of
Republic Act 1180 cannot be adversely affect appellants herein, is to erroneously assume that the
aforesaid provision constitute a property right of which the partners cannot be deprived without due process
or without their consent. The agreement contain therein must be deemed subject to the law existing at the
time when the partners came to agree regarding the extension. In the present case, as already stated,
when the partners amended the articles of partnership, the provisions of Republic Act 1180 were already in
force, and there can be not the slightest doubt that the right claimed by appellants to extend the original
term of their partnership to another five years would be in violation of the clear intent and purpose of the
law aforesaid.

CIR vs SUTER

Facts:
A limited partnership, named "William J. Suter 'Morcoin' Co., Ltd.," was formed by herein respondent
William J. Suter as the general partner, and Julia Spirig and Gustav Carlson, as the limited partner and was
registered with SEC. The partners contributed, respectively, P20,000.00, P18,000.00 and P2,000.00 to the
partnership. The firm engaged, among other activities, in the importation, marketing, distribution and
operation of automatic phonographs, radios, television sets and amusement machines, their parts and
accessories

In 1948, however, general partner Suter and limited partner Spirig got married and, thereafter, on 18
December 1948, limited partner Carlson sold his share in the partnership to Suter and his wife.
In 1959, Commissioner of Internal Revenue 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.

The Court of Tax Appeals reversed the decision of the CIR.

Hence, the petition.
Issues Ratio:
Whether or not the marriage of Suter and Spirig and their subsequent ac quisition of the interests of
remaining partner Carlson in the partnership dissolved the limited partnership

NO.  William J. Suter "Morcoin" Co., Ltd. was not a universal partnership, but a particular one since the
contributions of the partners were fixed sums of money, P20,000.00 by William Suter and P18,000.00 by
Julia Spirig and neither one of them was an industrial partner. It follows that William J. Suter "Morcoin" Co.,
Ltd. was not a partnership that spouses were forbidden to enter by Article 1677 of the Civil Code of 1889.
Nor could the subsequent marriage of the partners operate to dissolve it, such marriage not being one of
the causes provided for that purpose either by the Spanish Civil Code or the Code of Commerce

LIM TONG LIM vs. PHILIPPINE FISHING GEAR INDUSTRIES, INC. 317 SCRA 728, November 3, 1999

FACTS:

On behalf of "Ocean Quest Fishing Corporation," Antonio Chua and Peter Yao entered into a Contract for
the purchase of fishing nets and floats from respondent Philippine Fishing Gear Industries, Inc. They
claimed that they were engaged in a business venture with Petitioner Lim Tong Lim, who however was not
a signatory to the agreement. The buyers, however, failed to pay for the fishing nets and the floats; hence,
private respondents filed a collection suit against Chua, Yao and Petitioner Lim Tong Lim with a prayer for
a writ of preliminary attachment. The suit was brought against the three in their capacities as general
partners, on the allegation that "Ocean Quest Fishing Corporation" was a non-existent corporation as
shown by a Certification from the Securities and Exchange Commission. The trial court maintained the Writ,
and upon motion of private respondent, ordered the sale of the fishing nets at a public auction. Philippine
Fishing Gear Industries won the bidding and deposited with the said court the sales proceeds of P900,000.
Factual findings of the lower courts revealed that Lim requested Yao to join him in the venture, who was
already partners with Chua at that time; that the three verbally agreed to the purchase of fishing vessels,
where such venture was financed by a loan they obtained from Lims brother, Jesus Lim; and that the
fishing boats were registered in favor of Lim Tong Lim to serve as a security for the loan. Lim contended
that there was no partnership between him, Chua and Yao; that he did not even participate in the purchase
of the fishing nets; and that he was a lessor, not a partner, of Chua and Yao in a Contract of Lease that
involves the rental of the fishing boats. Thereafter, the trial court ruled that Philippine Fishing Gear
Industries was entitled to the Writ of Attachment and that Chua, Yao and Lim, as general partners, were
jointly liable to pay respondent. It also ruled that a partnership among Lim, Chua and Yao existed based (1)
on the testimonies of the witnesses presented and (2) on a Compromise Agreement executed by the three
in a civil case which provides that the proceeds of the sale of four (4) vessels including the fishing net shall
be applied as full payment in favor of JL Holdings Corporation and/or Lim Tong Lim; and to divide equally
among them the excess or loss. The CA affirmed the decision of the RTC ruling that petitioner was a
partner of Chua and Yao in a fishing business and may thus be held liable as a such for the fishing nets
and floats purchased by and for the use of the partnership. Hence, the petition.

ISSUE:

Whether or not there existed a partnership between Lim, Chua, and Yao.

HELD:

A partnership existed between Lim, Chua, and Yao. Given the factual findings of the lower courts, the three
agreed to engage in a fishing business, which they started by buying boats financed by a loan from Lims
brother. These boats, financed by borrowed money, fell under the term common fund under Article 1767 of
the Civil Code. The contribution need not be cash or fixed assets. It could be intangible like credit or
industry. Moreover, it is clear that the partnership extended not only to the purchase of the boat, but also to
that of the nets and the floats. The fishing nets and the floats, both essential to fishing, were obviously
acquired in furtherance of their business. It would have been inconceivable for Lim to involve himself so
much in buying the boat but not in the acquisition of the aforesaid equipment, without which the business
could not have proceeded. Given the preceding facts, it is clear that there was, among petitioner, Chua and
Yao, a partnership engaged in the fishing business. They purchased the boats, which constituted the main
assets of the partnership, and they agreed that the proceeds from the sales and operations thereof would
be divided among them.
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