EUFEMIA EVANGELISTA, MANUELA
EVANGELISTA, and FRANCISCA EVANGELISTA
vs.
THE COLLECTOR OF INTERNAL REVENUE and
THE COURT OFTAX APPEALS,
G.R. No. L-9996, October 15, 1957
Facts:
Petitioners borrowed sum of money from their
father and together with their own personal funds
they used said money to buy several real
properties. They then appointed their brother
(Simeon) as manager of the said real properties
with powers and authority to sell, lease or rent out
said properties to third persons. They realized
rental income from the said properties for the period
1945-1949.On September 24, 1954 respondent
Collector of Internal Revenue demanded the
payment of income tax on corporations, real estate
dealer's fixed tax and corporation residence tax for
the years 1945-1949. The letter of demand and
corresponding assessments were delivered to
petitioners on December 3, 1954, whereupon they
instituted the present case in the Court of Tax
Appeals, with a prayer that "the decision of the
respondent contained in his letter of demand dated
September 24, 1954" be reversed, and that they be
absolved from the payment of the taxes in question.
CTA denied their petition and subsequent MR and
New Trials were denied. Hence this petition.
Issue:
Whether or not petitioners have formed a
partnership and consequently, are subject to the tax
on corporations provided for in section 24 of
Commonwealth Act. No. 466, otherwise known as
the National Internal Revenue Code, as well as to
the residence tax for corporations and the real
estate dealers fixed tax.
Held: YES.
The essential elements of a partnership are two,
namely: (a)
an agreement to contribute money, property or
industry to a common fund
; and (b)
intent to divide the profits among the contracting
parties
. The first element is undoubtedly present in the
case at bar, for, admittedly, petitioners have agreed
to, and did, contribute money and property to a
common fund. Upon consideration of all the facts
and circumstances surrounding the case, we are
fully satisfied that their purpose was to engage in
real estate transactions for monetary gain and then
divide the same among themselves, because of the
following observations, among others: (1) Said
common fund was not something they found
already in existence; (2)They invested the same,
not merely in one transaction, but in a series of
transactions; (3) The aforesaid lots were not
devoted to residential purposes, or to other
personal uses, of petitioners herein. Although,
taken singly, they might not suffice to establish the
intent necessary to constitute a partnership, the
collective effect of these circumstances is such as
to leave no room for doubt on the existence of said
intent in petitioners herein. For purposes of the tax
on corporations, our National Internal Revenue
Code, includes these partnerships
—
with the exception only of duly registered general
co-partnerships
—
within the purview of the term “corporation." It is,
therefore, clear to our mind that petitioners herein
constitute a partnership, insofar as said Code is
concerned and are subject to the income tax for
corporations.
Sec 24, of NIRC
LIM TONG LIM vs. PHILIPPINE FISHING GEAR
INDUSTRIES, INC.
317 SCRA 728, G.R. No. 136448, Nov. 3, 1999,
Panganiban,
J .:p
FACTS
: Antonio Chua and Peter Yao bought nets of
various sizes and floats from Philippine Fishing
Gear (PFG) for Ocean Quest Fishing Corporation
(OQF), saying that petitioner was also involved with
OQF despite not being a signatory to the
agreement.
They failed
to pay the purchase price, hence PFG filed a
collection case against OQF.
PFG also alleged that OQF is a non
-existent corporation by virtue of a certification by
the
SEC. RTC issued the writ of attachment on the
nets, and was sold at a public auction with
the proceeds deposited to the court. RTC ruled
there was partnership between the three
(Chua, Yao, Lim) anchoring on the Compromise
Agreement they executed in the civil
case filed by Chua and Yao against Lim for the
declaration of ownership of the fishing
boats, among other things. CA affirmed.
ISSUE:
Whether or not by their acts, Lim, Chua, and Yao
are deemed to have entered
into a partnership.
an intangible like credit or industry. That the parties
agreed that any loss or profit from the
sale and operation of the boats would be divided
equally among them also shows that
they had indeed formed a partnership. It extended
to the fishing nets and the floats, both
essential to fishing, which were obviously acquired
in furtherance of their business
.
Petitioner’s defense that he was a mere lessor does
not hold water. In effect, he would
like this Court to believe that he consented to the
sale of his own boats to pay a debt of
Chua and Yao
, with the excess of the proceeds to be divided
among the three
of them.
No lessor would do what petitioner did. Indeed, his
consent to the sale proved that there
was a preexisting partnership among all three.
Corporation by estoppels: Although the
partnership/corporation was never legally
formed for unknown reasons,
this fact alone does not preclude the liabilities of the
three
as contracting parties in representation of it.
Clearly, under the law on estoppel, those
acting on behalf of a corporation and those
benefited by it, knowing it to be without valid
existence,
are held liable as general partners.

HELD
: Yes. A partnership is a contract where 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. The three engaged
in a commercial venture for commercial
fishing and contracted loans to buy two fishing
boats, and the nets and floats needed to
operate the fishing
business. In their Compromise Agreement, they
subsequently
revealed their intention to pay the loan with the
proceeds of the sale of the boats, and to
divide equally among them the excess or loss.
These boats, the purchase and the repair
of which were fin
anced with borrowed money, fell under the term
"common fund" under
Article 1767. The contribution to such fund need not
be cash or fixed assets; it could be
SUNGA CHAN V CHUA
Summary:
On June 22, 1992, Lamberto T. Chua (hereafter
respondent) filed a complaint against Lilibeth Sunga
Chan (hereafter petitioner Lilibeth) and Cecilia
Sunga (hereafter petitioner Cecilia), daughter and
wife, respectively of the deceased Jacinto L. Sunga
(hereafter Jacinto), for "Winding Up of Partnership
Affairs, Accounting, Appraisal and Recovery of
Shares and Damages with Writ of Preliminary
Attachment" with the Regional Trial Court, Branch
11, Sindangan, Zamboanga del Norte.
Doctrine:
The Civil Code expressly provides that upon
dissolution, the partnership continues and its legal
personality is retained until the complete winding up
of its business, culminating in its termination.
The failure to register the contract of partnership
does not invalidate the same as among the
partners, so long as the contract has the essential
requisites, because the main purpose of registration
is to give notice to third parties, and it can be
assumed that the members themselves knew of the
contents of their contract
Facts:
Respondent alleged that in 1977, he verbally
entered into a partnership with Jacinto in the
distribution of Shellane Liquefied Petroleum Gas
(LPG) in Manila. For business convenience,
respondent and Jacinto allegedly agreed to register
the business name of their partnership, SHELLITE
GAS APPLIANCE CENTER (hereafter Shellite),
under the name of Jacinto as a sole proprietorship.
Respondent allegedly delivered his initial capital
contribution of P100,000.00 to Jacinto while the
latter in turn produced P100,000.00 as his
counterpart contribution, with the intention that the
profits would be equally divided between them.
Allegedly, from the time that Shellite opened for
business on July 8, 1977, its business operation
was profitable.
Upon Jacinto's death in the later part of 1989, his
surviving wife, petitioner Cecilia and particularly his
daughter, petitioner Lilibeth, took over the
operations, control, custody, disposition and
management of Shellite without respondent's
consent. Despite respondent's repeated demands
upon petitioners for accounting, inventory,
appraisal, winding up and restitution of his net
shares in the partnership, petitioners failed to
comply. Petitioner Lilibeth allegedly continued the
operations of Shellite, converting to her own use
and advantage its properties.
On March 31, 1991, respondent claimed that after
petitioner Lilibeth ran out the alibis and reasons to
evade respondent's demands, she disbursed out of
the partnership funds the amount of P200,000.00
and partially paid the same to respondent with a
promise that the former would make the complete
inventory and winding up of the properties of the
business establishment. Despite such commitment,
petitioners allegedly failed to comply with their duty
to account, and continued to benefit from the assets
and income of Shellite to the damage and prejudice
of respondent.
The trial court rendered its Decision ruling for
respondent which the CA affirmed.
Hence, the petition. The petitioner insists, among
others, that laches and/or prescription should have
extinguished respondent’s claim. The petitioner also
questioned the validity of the oral partnership
between respondent and Jacinto, maintain that said
partnership had initial capital of P200,000 so it
should have been registered with the Securities and
Exchange Commission (SEC).
Issues
Whether or not the oral partnership between
respondent and petitioner is valid although not
registered with the SEC.
YES. Although Article 1772 of the Civil Code
requires that partnerships with a capital of
P3,000.00 or more must register with the SEC, this
registration requirement is not mandatory. Article
1768 of the Civil Code explicitly provides that the
partnership retains its juridical personality even if it
fails to register.
In the case at bar, non-compliance with this
directory provision of the law will not invalidate the
partnership considering that the totality of the
evidence proves that respondent and Jacinto
indeed forged the partnership in question.
PRAUTCH v. DOLORES HERNANDEZ DE
GOYENECHEA +
Article 35 of the Civil Code provides that the
following are juridical persons:
The corporations, associations, and institutions of
public interest recognized by law.
Their personality begins from the very instant in
Which, in accordance with law, they are validly
established.
The associations of private interest, be they civil,
commercial, or industrial, to which the law may
grant proper personality, independent of each
member thereof.
Article 36 is a follows:
"The associations referred to in No. 2 of the
foregoing article, shall be governed by the
provisions of their articles of associations,
according to the nature of the latter."
Facts:
The court below having allowed Prautch, Seholes &
Co. as a juridical entity to recover, the defendant
objected to the judgment on this ground
This partnership Prautch, Seholes & Co. was
engaged in the business of buying and selling
cows, woods, bricks, and the products of the
country. The proofs show that it never attempted to
comply with any of the requirements of the Code of
Commerce.
Assuming, without deciding, that civil partnerships
are also juridical persons, did Prautch and Scholes
not having complied with the Code of Commerce
nevertheless become a civil partnership and thus
acquire a personality of its own?
Article 35 of the Civil Code... corporations,
associations, and institutions of public interest
recognized by law.
personality begins from the very instant in Which, in
accordance with law, they are validly established.
associations of private interest, be they civil,
commercial, or industrial, to which the law may
grant proper personality, independent of each
member thereof.
associations referred to in No. 2 of the foregoing
article, shall be governed by the provisions of their
articles of associations, according to the nature of
the latter."
Issues:
It becomes necessary to know what partnerships
are civil and what ones are mercantile in order to
know in a particular case by what provisions of law
the partnership there in question is governed. Is a
commercial partnership distinguished from a civil
one by the object to... which it is devoted or by the
machinery with which it is organized?
Ruling:
the former distinction is the true one. The Code of
Commerce of 1829 distinctly provided that those
partnerships were mercantile which had for their
object an operation of commerce. (Art. 264.) The...
present Code has not in our opinion made any
radical change in this respect. Article 123 provides
that mercantile partnerships may be of any class
provided that their agreements are lawful and their
object industry or commerce.
mercantile and industrial partnerships are
merchants. It does not say that all partnerships are
merchant even if organized under this Code. It is
true that article 118 provides that the contract of
partnership shall be mercantile... whatever may be
its class provided it is organized in conformity with
the requirements of the Code.
it can not be construed as indicating that a
partnership organized for a purpose not connected
at all with industry or commerce shall be a
mercantile... partnership, thus rendering useless the
whole of article 123, and unnecessary the words
"mercantile and industrial" in article 1, 2. The
present Code does not therefor allow partnerships
not included in article 123 to organize under it. That
permission is, however, given td'them... by article
1670 of the Civil Code.
article 1670 is entirely inconsistent with the idea
that civil and mercantile partnership are
distinguished only by the methods of their
organization.
Civil partnerships, on account of the objects to
which they are devoted.
The author of that Code when writing... article 1667,
having in mind the provisions of the Code of
Commerce, did not say that a partnership may be
organized in any form, which would have repealed
the said provisions of the Code of Commerce, but
did say instead that a civil partnership may be
organized in any form.
If that section includes commercial partnerships,
then such a partnership can be organized under it
selecting from the Code of Commerce such of its
provisions as are favorable to the partners and
rejecting such as are not, and even including in its
articles of agreement the... right to do things which
by that Code are expressly prohibited. Such a
construction would allow a commercial partnership
to use or dispense with the Code of Commerce as
best suited its own ends.
the difference between a civil and a mercantile
partnersip: "If we can define the contract of
partnership in general by saying that it is one by
virtue of which several persons bring... their
property or industry into a common fund for the
attainment of a common purpose by common
means, then a mercantile partnership will be one in
which two or more persons put their property or
industry in common or both, applying them to
commercial transaction for the purpose... of
obtaining some profit to be divided among them.
Companies, in order to be regarded asd mercantile,
must have for their object the realization of some
mercantile act either as a means or an end... civil
partnerships will be... governed by the provisions of
the Civil Code (1) mercantile partnerships by the
provisions of the Code of Commerce (2) and
industrial partnerships, according to their nature,
will be subject to the provisions relative to one or
the other of the former classes of partnerships...
three classes of artificial persons of private
interest... purpose of mercantile partnerships is the
earning of a profit... industrial partnerships may
have the characteristics of mercantile or 'civil...
partnerships, according to whether they have been
established in accordance with the requirements of
the Code of Commerce or without regard to. the
latter... civil partnership is the result of the contract
of this name entered into by persons who undertake
to... devote to a common purpose either money,
property, or labor with the intention of dividing the
profits
The partnership of Prautch, Scholes & Co. was a
typical commercial partnership... buying personal
property with the purpose of reselling it in the same
form at a profit.
It is therefore the purpose which determines the
character of a partnership as civil or mercantile. The
mercantile form assumed by a partnership whose
purposes are of a civil... nature is not sufficient to
give it the character of a mercantile partnership ; it
will be governed by the provisions of the Code of
Commerce, except with respect to bankruptcy and
jurisdiction... the contract of partnership between
Prautch and Scholes was in its nature commercial;
that under article 36 of the Civil Code said
partnership was governed by the provisions of the
Code of Commerce; that its failure to comply with...
the requirements of that Code did not make it a civil
partnership, and thus give it legal personality, which
we have assumed such partnerships have.
The partners are required to state their agreements
in a public writing, and to record them in... the
Mercantile Registry.
That a commercial partnership which has not
recorded its articles of agreement can not maintain
an action in its firm name is well settled by the
authorities.
certain formalities must be observed in order that
their constitution result in legal effects.
decisions of the Supreme Court deny legal
personality to mercantile partnerships whose
articles of agreement are not recorded.
The firm of Prautch, Wholes & Co. had no legal
personality, and this action can not be maintained in
its name.
MACDONALD VS NATL CITY BANK
Issues:
"Since an unregistered commercial partnership
unquestionably has no juridical personality, can it
have a domicile so that the registration of a chattel
mortgage therein is notice to the world?
If not, is a chattel mortgage executed by only one of
the 'partners' of an unregistered commercial
partnership validly registered so as to constitute
notice to the world if it is hot registered at the place
where the... aforesaid 'partner' actually reside$ but
only in the place where the deed states that he
resides, which is not his real residence?... become
academic
Is a chattel mortgage executed by only one of the
'partners' of an unregistered commercial
partnership valid as to third persons... when that
'partner' executed the affidavit of good faith in
Quezon City before notary... public whose
appointment is only for the City of Manila?
Does only one of several 'partners' of an
unregistered commercial partnership have
authority, by himself alone, to execute a valid
chattel mortgage over property owned by the
unregistered commercial partnership in... order to
guarantee a pre-existing overdraft previously
granted, without guaranty, by the bank
Ruling:
While an unregistered commercial partnership has
no juridical personality, nevertheless, where two or
more persons attempt to create a partnership failing
to comply with all the legal formalities, the law
considers them as partners and the association is a
partnership in so... far as it is a favorable to third
persons, by reason of the equitable principle of
estoppel.
Da Costa and Gorcey cannot deny that they are
partners of the partnership
Stasikinocey, because in all their transactions with
the respondent they represented themselves as
such. Petitioner McDonald cannot disclaim
knowledge of the partnership Stasikinocey because
he dealt with said entity in purchasing two of the
vehicles in question through Gorcey... and Da
Costa.
where a partnership not duly organized has been
recognized as such in its dealings with certain
persons, it shall be considered as "partnership by
estoppel and the persons dealing with it are...
estopped from denying its partnership existence.
The sale of the vehicles in question being void as to
petitioner McDonald, the transfer from the latter to
petitioner Benjamin Gonzales is also void, as the
buyer cannot have a better right than the seller.
The registration of the chattel mortgage in question
with the Office of the Register of Deeds of
Rizal, the residence or place of business of the
partnership Stasikinocey being San Juan, Rizal,
was therefore in accordance with section 4 of the
Chattel Mortgage Law.
as a de facto partnership, Stasikinocey had its
domicile in San Juan, Rizal.
chattel mortgage in question is in the form required
by law, and there is therefore the presumption of its
due execution which cannot be easily destroyed by
the biased testimony of the one who executed it.
The interested version of Da Costa that the...
affidavit of good faith appearing in the chattel
mortgage was executed in Quezon City before a
notary public for and in the City of Manila was
correctly rejected by the trial court and the Court of
Appeals. Indeed, cumbersome legal formalities are
imposed to prevent fraud.
In view of the conclusion that Stasikinocey is a de
facto partnership, and Da Costa appears as a co-
manager in the letter of Gorcey to the respondent
and in the promissory note executed by Da Costa,
and that even the partners considered him as such,
as stated in the affidavit, to the effect that "That we
as the majority partners hereby agree to appoint
Louis da Costa co-managing partner of Alan W.
Gorcey, duly approved managing partner of the
said firm," the "partner" who executed the chattel
mortgage in question must be deemed to... be so
fully authorized. Section 6 of the Chattel Mortgage
Law provides that when a partnership is a party to
the mortgage, the affidavit may be made and
subscribed by one member thereof. In this case the
affidavit was executed and subscribed by Da Costa,
not only as a partner... but as a managing partner.
Petitioners forget that the respondent is a third
person with respect to the partnership, and the
chattel mortgage executed by Da Costa cannot
therefore be impugned by Gorcey on the ground
that there is no... partnership between them and
that the vehicles in question belonged to them in
common. As a matter of fact, the respondent and
the petitioners are all third persons as regards the
partnership Stasikinocey and even assuming that
the petitioners are purchasers in good faith and...
for value the respondent having transacted with
Stasikinocey earlier than the petitioners, it should
enjoy and be given priority.
AGAD V MABATO to any fishpond. Their contributions were limited to
the sum of P1,000 each. Indeed, Paragraph 4 of
FACTS:
Annex "A" provides:
Alleging that he and defendant Severino Mabato
are — pursuant to a public instrument dated August
29, 1952, copy of which is attached to the complaint That the capital of the said partnership is Two
as Annex "A" — partners in a fishpond business, to Thousand (P2,000.00) Pesos Philippine Currency,
the capital of which Agad contributed P1,000, with of which One Thousand (P1,000.00) pesos has
the right to receive 50% of the profits; that from been contributed by Severino Mabato and One
1952 up to and including 1956, Mabato who Thousand (P1,000.00) Pesos has been contributed
handled the partnership funds, had yearly rendered by Mauricio Agad.
accounts of the operations of the partnership; and
xxx xxx xxx
that, despite repeated demands, Mabato had failed
and refused to render accounts for the years 1957 The operation of the fishpond mentioned in Annex
to 1963, Agad prayed in his complaint against "A" was the purpose of the partnership. Neither said
Mabato and Mabato & Agad Company, filed on fishpond nor a real right thereto was contributed to
June 9, 1964, that judgment be rendered the partnership or became part of the capital
sentencing Mabato to pay him (Agad) the sum of thereof, even if a fishpond or a real right thereto
P14,000, as his share in the profits of the could become part of its assets.
partnership for the period from 1957 to 1963,
In his answer, Mabato admitted the formal
allegations of the complaint and denied the -“No real property involved.”
existence of said partnership, upon the ground that Articles 1771 and 1773 of said Code provide:
the contract therefor had not been perfected,
because Agad had allegedly failed to give his Art. 1771. A partnership may be constituted in any
P1,000 contribution to the partnership capital. form, except where immovable property or real
rights are contributed thereto, in which case a
Subsequently, Mabato filed a motion to dismiss, public instrument shall be necessary.
upon the ground that the complaint states no cause
of action and that the lower court had no jurisdiction *Art. 1773. A contract of partnership is void,
over the subject matter of the case, because it whenever immovable property is contributed
involves principally the determination of rights over thereto, if inventory of said property is not made,
public lands. After due hearing, the court issued the signed by the parties; and attached to the public
order appealed from, granting the motion to dismiss instrument.
the complaint for failure to state a cause of action.
This conclusion was predicated upon the theory
that the contract of partnership, Annex "A", is null
and void, pursuant to Art. 1773* of our Civil Code,
because an inventory of the fishpond referred in
said instrument had not been attached thereto.
ISSUES:
Whether or not "immovable property or real rights"
have been contributed to the A-M partnership
RULING: -“No real property involved.”
as stated in Annex "A" the partnership was
established "to operate a fishpond", not to "engage
in a fishpond business". Moreover, none of the
partners contributed either a fishpond or a real right
LITONJUA V LITONJUA
Summary:
Petitioner Aurelio K. Litonjua, Jr. (Aurelio) and
herein respondent Eduardo K. Litonjua, Sr.
(Eduardo) are brothers. The legal dispute between
them started when, on December 4, 2002, in the
Regional Trial Court (RTC) at Pasig City, Aurelio
filed a suit against his brother Eduardo and several
corporations for specific performance and
accounting.
Doctrine:
Art. 1771. A partnership may be constituted in any
form, except where immovable property or real
rights are contributed thereto, in which case a
public instrument shall be necessary.
Art. 1772. Every contract of partnership having a
capital of three thousand pesos or more, in money
or property, shall appear in a public instrument,
which must be recorded in the Office of the
Securities and Exchange Commission.
Failure to comply with the requirement of the
preceding paragraph shall not affect the liability of
the partnership and the members thereof to third
persons.
Art. 1773. A contract of partnership is void,
whenever immovable property is contributed
thereto, if an inventory of said property is not made,
signed by the parties, and attached to the public
instrument.
A partnership may be constituted in any form, save
when immovable property or real rights are
contributed thereto or when the partnership has a
capital of at least 3,000.00, in which case a public
instrument shall be necessary. An inventory to be
signed by the parties and attached to the public
instrument is also indispensable to the validity of
the partnership whenever immovable property is
contributed to it.
Facts:
On or about 22 June 1973, Aurelio and Eduardo
entered into a joint venture/partnership for the
continuation of their family business and common
family funds.
This joint venture/partnership agreement was
contained in a memorandum addressed by Eduardo
to his siblings, parents and other relatives. Copy of
this memorandum is attached hereto and made an
integral part as Annex "A" and the portion referring
to Aurelio submarked as Annex "A-1".
It was then agreed upon between Aurelio and
Eduardo that in consideration of Aurelio retaining
his share in the remaining family businesses
(mostly, movie theaters, shipping and land
development) and contributing his industry to the
continued operation of these businesses, Aurelio
will be given P1 Million or 10% equity in all these
businesses and those to be subsequently acquired
by them whichever is greater. .
From 22 June 1973 to about August 2001, or in a
span of 28 years, Aurelio and Eduardo had
accumulated in their joint venture/partnership
various assets including but not limited to the
corporate defendants and their respective assets.
The substantial assets of most of the corporate
defendants consist of real properties.
Sometime in 1992, the relations between Aurelio
and Eduardo became sour so that Aurelio
requested for an accounting and liquidation of his
share in the joint venture/partnership but these
demands for complete accounting and liquidation
were not heeded.
Aurelio filed a suit against his brother Eduardo and
several corporations for specific performance and
accounting.
Eduardo and the corporate respondents, as
defendants a quo, filed a joint ANSWER With
Compulsory Counterclaim denying under oath the
material allegations of the complaint, more
particularly that portion thereof depicting petitioner
and Eduardo as having entered into a contract of
partnership. As affirmative defenses, Eduardo, et
al., alleged that the complaint states no cause of
action, since no cause of action may be derived
from the actionable document, i.e., Annex "A-1",
being void under the terms of Article 1767 in
relation to Article 1773 of the Civil Code, infra.
The trial court, in an Omnibus Order dated March 5,
2003, denied the affirmative defenses. The CA set
aside the order of the trial court and dismissed the
complaint filed by Aurelio.
Issues Ratio: WHEREFORE, the instant petition is DENIED and
the impugned Decision and Resolution of the Court
Whether or not petitioner and respondent Eduardo
of Appeals AFFIRMED.
are partners in the theatre, shipping and realty
business
NO. The Court rules, as did the CA, that no valid Cost against the petitioner.
partnership existed between Aurelio and Eduardo
because the said "memorandum" is null and void
for purposes of establishing the existence of a valid
contract of partnership.
Annex "A-1", on its face, contains typewritten
entries, personal in tone, but is unsigned and
undated. As an unsigned document, there can be
no quibbling that Annex "A-1" does not meet the
public instrumentation requirements exacted under
Article 1771 of the Civil Code. Moreover, being
unsigned and doubtless referring to a partnership
involving more than P3,000.00 in money or
property, Annex "A-1" cannot be presented for
notarization, let alone registered with the Securities
and Exchange Commission (SEC), as called for
under the Article 1772 of the Code.
Under Article 1773 of the Civil Code, the contract-
validating inventory requirement applies as long
real property or real rights are initially brought into
the partnership. In short, it is really of no moment
which of the partners, or, in this case, who between
petitioner and his brother Eduardo, contributed
immovables. In context, the more important
consideration is that real property was contributed,
in which case an inventory of the contributed
property duly signed by the parties should be
attached to the public instrument, or else there is
legally no partnership to speak of.
Indeed, because of the failure to comply with the
essential formalities of a valid contract, the
purported "partnership/joint venture" is legally
inexistent and it produces no effect whatsoever.
Necessarily, a void or legally inexistent contract
cannot be the source of any contractual or legal
right. Accordingly, the allegations in the complaint,
including the actionable document attached thereto,
clearly demonstrates that petitioner has NO valid
contractual or legal right which could be violated by
the respondent. (The Court concurring with the CA's
Decision)
Dispositive: