IRMA IDOS, petitioner,

vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents
296 SCRA 194, September 25, 1998

Facts:

Irma Idos, petitioner, formed a short-lived partnership with Eddie Alarilla,

respondent, for a leather tanning business. Upon the business’ liquidation, it
had receivables and stocks worth P1,800,000. For the share of Alarilla, Idos
issued four post-dated checks of which only three out of four checks were
encashed. This impelled Alarilla to file for a BP 22 case against Idos when the
latter refused to pay the value of the check after the former has demanded
for it. On her defense, Idos claimed that the check served only as an
“assurance” of Alarilla’s share in the partnership and that it was not
supposed to be deposited until the stocks have been sold. This was refuted
by Alarilla and subsequently Idos was convicted by the trial court of the
offense charged. The CA affirmed the decision of the trial court.

Issue:

Whether or not Idos violated BP 22?

Held:

No. One of the elements of the offense penalized under BP 22 is “the

making, drawing and issuance of any check to apply for any account or for
value.” In this case Idos showed enough evidence that the check was to be
funded from receivables to be collected and goods to be sold by the
partnership. First, only one of the fours check were not encashed and
second, even Alarilla himself admitted that there was no consideration for
the issuance of the check. Hence the check in question was not issued for
any debt of or any account due and payable by the petitioner. Moreover, Idos
and Alarilla were still in the “winding up” of the affairs of the partnership hen
the check was issued as evidenced by the fact that they still had to sell the
goods on hand and collect the receivables from debtors. As provided by the
Civil Code: winding-up is the process of settling business affairs after
dissolution, i.e. collecting of assets previously demandable; termination is
the point in time after all the partnership affairs have been wound up. Thus,
since that partnership has not been terminated, the petitioner and private
complainant remained as co-partners. The check was thus issued by the
petitioner to complainant as would a partner to another and not as payment
from a debtor to a creditor. Idos did not violate BP 22.
VILLAREAL VS. RAMIREZ

FACTS: Sometime in 1984, Luzviminda Villareal, Carmelito Jose, and Jesus

Jose formed a partnership with a capital of P750,000 for the operation of a
restaurant and catering services business under the name of “Aquarius Food
House and Catering Servoces.” Villareal was appointed general manager and
Carmelito Jose, operations manager. Respondent Donaldo Efren Ramirez
joined as a partner and his capital contribution of P250,000 was paid by his
parents, respondents Cesar and Carmelita Ramirez.

After Jesus Jose withdrew from the partnership in January 1987, his
capital contribution of P250,000 was refunded to him in cash by agreement
of the partners. In the same month, without prior knowledge of respondents,
petitioners closed the restaurant, allegedly because of increased rental. The
restaurant furniture and equipment were deposited in the respondent’s
house for storage. Respondents wrote petitioners a letter saying that they
were no longer interested in continuing the partnership and that they were
accepting the latter’s offer to return their capital contribution. Again,
respondents wrote petitioners informing the deterioration of the restaurant
furniture and equipment, and reiterated the request to return their one-third
share of the capital contribution.

The repeated oral and written requests were left unheeded. Aggrieved,
respondents filed a complaint for collection of sum of money.

ISSUE: Whether or not petitioners are liable to respondents for the latter’s
share in the partnership.

HELD: NO. 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.” Since
the capital was contributed to the partnership, not to petitioners, it is the
partnership that must refund the equity of the retiring partners.

Since it is the partnership, as a separate and distinct entity, that must

refund the shares of the partners, the amount to be refunded is necessarily
limited to its total resources. In other words, it can only pay out what it has
in its coffers, which consists of all its assets. However, before the partners
can be paid, whatever is left of the partnership assets becomes available for
the payment of the partner’s shares. In the present case, the investment of
the respondents substantially dwindled. The original amount of P250,000
which they had invested could no longer be returned to them because one-
third of the partnership properties at the time of dissolution did not amount
to that much.
YU Vs NLRC 224 SCRA 75 June 30, 1993 FACTS:

Petitioner Benjamin Yu was formerly the Assistant General Manager of the

marble quarrying and export business operated by a registered partnership
with the firm name of "Jade Mountain Products Company Limited" ("Jade
Mountain"). The partnership was originally organized on 28 June 1984 with
Lea Bendal and Rhodora Bendal as general partners and Chin Shian Jeng,
Chen Ho-Fu and Yu Chang, as limited partners. The partnership business
consisted of exploiting a marble deposit. When the partnership was sold and
transferred to private respondent, he was never retain to his job. He filed a
complaint for illegal dismissal and recovery of unpaid salaries, moral and
exemplary damages and attorney's fees, against Jade Mountain, Mr. Willy Co
and the other private respondents. The partnership and Willy Co denied
petitioner's charges, contending in the main that Benjamin Yu was never
hired as an employee by the present or new partnership. The Labor Arbiter
rendered a decision holding that petitioner had been illegally dismissed. On
appeal, the National Labor Relations Commission reversed the decision of
the Labor Arbiter and dismissed petitioner's complaint. The NLRC held that a
new partnership consisting of Mr. Willy Co and Mr. Emmanuel Zapanta had
bought the Jade Mountain business, that the new partnership had not
retained petitioner Yu in his original position as Assistant General Manager,
and that Benjamin Yu, therefore, had not been illegally dismissed by the new
partnership which had simply declined to retain him in his former managerial
position.

ISSUE: Whether the partnership which had hired petitioner Yu as Assistant

General Manager had been extinguished and replaced by a new partnerships
composed of Willy Co and Emmanuel Zapanta?

HELD: The changes in the membership of the partnership was the dissolution
of the old partnership. Occurrence of events which precipitate the legal
consequence of dissolution of a partnership don’t automatically result in the
termination of the legal personality of the old partnership. The legal
personality of a partnership persists for the limited purpose of winding up
and closing of the affairs of the partnership. A withdrawing partner remains
liable to a third party creditor of the old partnership butthe new partnership
is entitled to appoint and hire a new general or assistant general manager to
run the affairs of the business. Indeed, Benjamin Yu is entitled to enforce his
claim for unpaid salaries, as well as other claims relating to his employment
with the previous partnership, against the new Jade Mountain.
 [G.R. No. 127405. October 4, 2000]
MARJORIE TOCAO and WILLIAM T. BELOvs. CA and NENITA A. ANAY

FACTS: William Belo introduced NenitaAnay 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 and (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 was an unjustified dissolution of partnership

that would entitle Anay to damages.

HELD: Yes.Tocao unilaterally excluded Anay from the partnership to reap for
herself and/or for Belo financial gains resulting from Anay’s efforts to make
the business venture a success. Her instructions not to allow Anayto hold
two sales office concretely spoke of her perception that Anay was no longer
necessary in the business operation and resulted in a falling out between the
two. However, a mere falling out or misunderstanding between partners does
not convert the partnership into a sham organization. The partnership exists
until dissolved under the law. Since the partnership created by the parties
has no fixed term and is therefore a partnership at will predicated on their
mutual desire and consent, it may be dissolved by the will of a partner.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.Nevertheless, the
partnership was not terminated thereby; it continues until the winding up of
the business.
REALUBIT vs JASO

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. Subsequently, Biondo executed a Deed of
Assignment— without Josefina’s knowledge and consent to the transfer of
Biondo’s share— transferring all his rights and interests in the business in
favor of respondent Eden Jaso. With Biondo's eventual departure from the
country, Jaso sent Realubit a letter apprising her of their acquisition of said
Biondo’s share in the business and formally demanding an accounting and
inventory, as well as the remittance of their portion of its profits, which
Realubit failed to acquiesce. Jaso filed suit against Realubit, as well as her
husband, Ike, for specific performance, accounting, examination, audit and
inventory of assets and properties, dissolution of the joint venture,
appointment of a receiver and damages.
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; that Jaso cannot be considered as a partner in the
business, pursuant to Article 1813; and while entitled to Biondo’s share in
the profits of the business, Jaso cannot interfere with the management of the
partnership.

ISSUE:
Whether or not there was a valid assignment of rights to the joint venture

RULING:
Jaso is entitled to Biondo's share in the profits, despite Josefina’s lack
of consent to the assignment of Biondo’s interest in the joint venture.
Although Jaso did not 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.
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." In Article 1813, it provides 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
assignor's 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.

WHEREFORE, the petition is DENIED.

G.R. No. L-5837
CRISTOBAL BONNEVIE, ET AL., plaintiffs-appellants,
vs.
JAIME HERNANDEZ, defendant-appellee.

Facts: Plaintiffs with other associates formed a syndicate or secret partnership for
the purpose of acquiring the plants, franchises and other properties of the Manila
Electric Co. — hereinafter called the Meralco. No formal articles were drawn for it
was the purpose of the members to incorporate once the deal had been
consummated. Negotiation for the purchase was commenced, but as it made no
headway, defendant was taken in as a member of the partnership so that he could
push the deal through, and to that end he was given the necessary power of
attorney. Using partnership funds, defendant was able to buy the Meralco
properties. About the latter half of the following month the members of the
partnership proceeded with the formation of the proposed corporation, apportioning
among themselves its shares of stock in proportion to their respective contributions
to the capital of the partnership and their individual efforts in bringing about the
acquisition of the Meralco properties.

But before the incorporation, judge Reyes and the plaintiffs withdrew from the
partnership for the reason that the business was not going well, and, as admitted by
both parties, the partnership was then dissolved. In accordance with the terms of
the resolution, the withdrawing partners

Following the dissolution of the partnership, the members who preferred to remain
in the business went ahead with the formation of the corporation, taking in new
associates as stockholders.

Two years from their withdrawal from the partnership, when the corporate business
was already in a prosperous condition, plaintiffs brought the present suit against
Jaime Hernandez, claiming a share in the profit the latter is supposed to have made
from the assignment of the Meralco properties to the corporation, estimated by
plaintiffs to be P225,000 and their share of it to be P115,312.50.

Defendant's answer denies that he has made any profit out of the assignment in
question and alleges that in any event plaintiffs, after their withdrawal from the
partnership, ceased to have any further interest in the subsequent transactions of
the remaining members.

Issue: W/N Cristobal Bonnevie, the plaintiff, is entitled to profits of the partnership
at the time of dissolution.

Held: No liquidation was called for because there was already a settlement as to
what Cristobal Bonnevie should receive. It appeared that the settlement was agreed
upon the very day the partnership was dissolved. The acceptance by Cristobal
Bonnevie of his investment was understood and intended as a final settlement of
whatever right or claim Cristobal Bonnevie might have in the dissolved partnership.
Cristobal Bonnevie was precluded from claiming any share in the profits should
there be any, at the time of dissolution.

G.R. No. L-17526 June 30, 1962

GREGORIO MAGDUSA, ET AL., petitioners,

vs.
GERUNDIO ALBARAN, ET AL., respondents.

Appellant and appellees, together with various other persons, had verbally
formed a partnership de facto, for the sale of general merchandise to which
appellant contributed P2,000 as capital, and the others contributed their
labor, under the condition that out of the net profits of the business, 25%
would be added to the original capital, and the remaining 75% would be
divided among the members in proportion to the length of service of each.
Sometime in 1953 and 1954, the appellees expressed their desire to
withdraw from the partnership, and appellant thereupon made a
computation to determine the value of the partners' shares to that date. The
results of the computation were embodied in the document drawn in the
handwriting of appellant. Appellees thereafter made demands upon
appellant for payment, but appellant having refused, they filed the initial
complaint in the court below. Appellant defended by denying any partnership
with appellees, whom he claimed to be mere employees of his.

The Court of First Instance of Bohol dismissed the complaint on the ground
that the other were indispensable parties but had not been impleaded. Upon
appeal, the Court of Appeals reversed the decision, ruling that it is not an
action for a dissolution of a partnership and winding up of its affairs or
liquidation of its assets in which the interest of other partners who are not
brought into the case may be affected. The action of the plaintiffs is one for
the recovery of a sum of money with Gregorio Magdusa as the principal
defendant. The partnership, with Gregorio Magdusa as managing partner,
was brought into the case as an alternative defendant only.

Issue: Whether or not appellees' action can be entertained, because in the

distribution of all or part of a partnership's assets, all the partners have no
interest and are indispensable parties without whose intervention no decree
of distribution can be validly entered.
Held:

It cannot be entertained. A partner's share cannot be returned without first

dissolving and liquidating the partnership, for the return is dependent on the
discharge of the creditors, whose claims enjoy preference over those of the
partners; and it is self-evident that all members of the partnership are
interested in his assets and business, and are entitled to be heard in the
matter of the firm's liquidation and the distribution of its property. The
liquidation drawn by appellant is not signed by the other members of the
partnership besides appellees and appellant; it does not appear that they
have approved, authorized, or ratified the same, and, therefore, it is not
binding upon them. At the very least, they are entitled to be heard upon its
correctness.

In addition, unless a proper accounting and liquidation of the partnership

affairs is first had, the capital shares of the appellees, as retiring partners,
cannot be repaid, for the firm's outside creditors have preference over the
assets of the enterprise, and the firm's property can not be diminished to
their prejudice. Finally, the appellant cannot be held liable in his personal
capacity for the payment of partners' shares for he does not hold them
except as manager of, or trustee for, the partnership. It is the latter that
must refund their shares to the retiring partners. Since not all the members
of the partnership have been impleaded, no judgment for refund can be
rendered.
JO Chung cangvs. PACIFIC COMMERCIAL Co.

Facts:In an insolvency proceedings of petitioner-establishment, “Sociedad

Mercantil, Teck Seing &Co., Ltd.”, creditors, Pacific Commercial and others
filed a motion with the Court to declare the individual partner parties to the
proceeding, for each to file an inventory, and for each to be adjudicated as
insolvent debtors.

Issue:What is the nature of the mercantile establishment, Teck Seing & Co.,
Ltd.?

Held: The contract of partnership established a general partnership. By

process of elimination, Teck Seing & Co., Ltd. Isnot a corporation nor an
accidental partnership (jointaccount association). To establish a limited
partnership, there must be, at least, one general partner and the name of at
least one of the general partners must appear in the firm name. This
requirement has not been fulfilled. Those who seek to avail themselves of
the protection of laws permitting the creation of limited partnerships must
the show a substantially full compliance with such laws. It must be noted
that all the requirements of the Code have been met w/ the sole exception
of that relating to the composition of the firm name. The legal intention
deducible from the acts of the parties controls in determining the existence
of a partnership. If they intend to do a thing w/c in law constitutes a
partnership, they are partners although their very purpose was to avoid the
creation of such relation. Here the intention of the persons making up, Teck
Seing & Co., Ltd. Was to establish partnership w/c they erroneously
denominated as a limited partnership.
G.R. No. L-25532 February 28, 1969

COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
WILLIAM J. SUTER and THE COURT OF TAX APPEALS, respondents.

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 partners. The limited
partnership was registered with the Securities and Exchange Commission.

However, Suter and Spirig got married and, thereafter, limited partner
Carlson sold his share in the partnership to Suter and his wife.

The limited partnership had been filing its income tax returns as a
corporation, without objection by the herein petitioner, until in 1959 in an
assessment, 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.

Respondent Suter protested the assessment, and requested its

cancellation and withdrawal, but his request was denied. He appealed to the
Court of Tax Appeals, which rendered a decision reversing that of the
Commissioner of Internal Revenue.

Issues:
Whether or not the partnership was dissolved after the marriage of the
partners, Suter and Spirig and the subsequent sale to them by the remaining
partner, Gustav Carlson

Held:

No it did not dissolve the limited partnership. The capital contributions of

partners Suter and Spirig were separately owned and contributed by
them before their marriage; and after they were joined in wedlock, such
contributions remained their respective separate property. Thus, the
individual interest of each consort in the limited partnership did not become
common property of both after their marriage.