Evangelista v Collector of Internal Revenue

 Petitioners borrowed P59,140 from their father and that, together with their own money, was used to buy 25
properties.
 They appointed their brother Simeon 'manage their properties with full power to lease; to collect and receive
rents; to issue receipts therefor; in default of such payment, to bring suits against the defaulting tenants; to sign
all letters, contracts, etc., for and in their behalf, and to endorse and deposit all notes and checks for them;
 The petitioner also rented the properties to various tenants.
 The CIR demanded payment of income tax on corporations, real estate dealer's fixed tax and corporation
residence tax for the years 1945-1949.
 Petitioners instituted a case in the Court of Tax Appeals praying that they be absolved from payment of the
taxes.

WN petitioners are subject to the tax on corporations provided for in section 24 of the National Internal Revenue Code?
YES

 Art 1767 provides for the essential elements of partnership:

o an agreement to contribute money, property or industry to a common fund; and
o intent to divide the profits among the contracting parties.
 The first element is undoubtedly present in the case at bar because petitioners have agreed to, and did,
contribute money and property to a common fund.
 The second element is also present: the collective effect of these circumstances is such as to leave no room for
doubt on the existence of said intent in petitioners
o they jointly borrowed a substantial portion thereof in order to establish said common fund
o they invested the same, not merely not merely in one transaction, but in a series of transactions
 24 lots were acquired and transactions were undertaken, over a brief perio d of time,
particularly the last three purchases, which is a strong indicative of a pattern or common design
that was not limited to the conservation and preservation of the aforementioned common fund
or even of the property acquired by the petitioners
o lots were not devoted to residential purposes, or to other personal uses, of petitioners herein. The
properties were leased separately to several persons
o the properties have been under the management of one person, namely Simeon Evangelista, with full
power to lease, to collect rents, to issue receipts, to bring suits, to sign letters and contracts, and to
indorse and deposit notes and checks. Thus, the affairs relative to said properties have been handled as
if the same belonged to a corporation or business and enterprise operated for profit.
o These conditions have existed for over 15 years since the first property was acquired and over 12 years
since Simeon became the manager
o Petitioners have not testified or introduced any evidence, either on their purpose in creating the set up
already adverted to, or on the causes for its continued existence
 The contention of the petitioners that they are co-owners ad not co-partners because a personality independent
of its members did not come into existence is untenable
o in section 84(b) of said Code, "the term corporation includes partnerships, no matter how created or
organized." This qualifying expression clearly indicates that a joint venture need not be undertaken in

SEC. 24. Rate of tax on corporations.—There shall be levied, assessed, collected, and paid annually upon the total net income received in the preceding taxable year
from all sources by every corporation organized in, or existing under the laws of the Philippines, no matter how created or organized but not including duly registered
general co-partnerships (compañias colectivas), a tax upon such income equal to the sum of the following: . . .

SEC. 84 (b). The term 'corporation' includes partnerships, no matter how created or organized, joint-stock companies, joint accounts (cuentas en participacion),
associations or insurance companies, but does not include duly registered general copartnerships. (compañias colectivas).
 any of the standard forms, or in conformity with the usual requirements of the law on partnerships, in
order that one could be deemed constituted for purposes of the tax on corporations.
o personality as a condition essential to the existence of the partnerships because even in Section 84(b),
the term "corporation" includes, among others, joint accounts, and "associations," none of which has a
legal personality of its own, independent of that of its members
o For purposes of the tax on corporations, our National Internal Revenue Code, includes these
partnerships — with the exception only of duly registered general copartnerships — within the purview
of the term "corporation."

SEC. 24. Rate of tax on corporations.—There shall be levied, assessed, collected, and paid annually upon the total net income received in the preceding taxable year
from all sources by every corporation organized in, or existing under the laws of the Philippines, no matter how created or organized but not including duly registered
general co-partnerships (compañias colectivas), a tax upon such income equal to the sum of the following: . . .

SEC. 84 (b). The term 'corporation' includes partnerships, no matter how created or organized, joint-stock companies, joint accounts (cuentas en participacion),
associations or insurance companies, but does not include duly registered general copartnerships. (compañias colectivas).