Tocao vs. CA (G.R. No.

127405, October 4, 2000)

Facts:

Nenita Anay (Anay) met William Belo (Belo) and the latter introduced Anay to Marjorie Tocao (Tocao).
The three decided to enter into a joint venture of importation and local distribution of kitchen
cookwares, wherein Belo was to contribute P2.5 million, Tocao also contributed some cash and shall also
act as President and General Manager; and Anay be in-charge marketing because of her experience and
connections as marketer. They further agreed that Anay shall receive the following:

10% share of annual net profits

6% overriding commission for weekly sales

30% of sales Anay will make herself

2% share for her demo services

The venture succeeded under Anay’s marketing skills and operated under the name Geminesse
Enterprise, which however was registered as a sole proprietorship with the Bureau of Domestic Trade
under Tocao’s name. The joint venture agreement was not reduced in writing because Anay trusted
Belo’s assurances. Sometime later, the relationship between Anay and Tocao soured when Tocao advised
one of the branch managers that Anay is not long 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 partnership formed.

Ruling:

Yes, the parties involved in this case formed a partnership. Even though the partnership formed
was not reduced into writing and was registered as a sole proprietorship instead, it doesn’t conclude that
there was no partnership formed. The Supreme Court held that to be considered a juridical personality,
a partnership must fulfill these requisites as provided under Article 1767 of the Civil Code which provides
that, there is Partnership when: (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.

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. Also, 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 the requirements provided
under Article 1772 of the Civil Code did not cause the nullification of the partnership.

In the case at hand, Belo acted as capitalist while Tocao as president and general manager, and
Anay as head of the marketing department and was entitled to a percentage of the net profits of the
business when they explicitly agreed to profit sharing. Also, Anay receiving commissions is only
incidental to her efforts as a head marketer.