G.R. No. 154486 December 1, 2010 G.R. No. 144214 July 14, 2003 G.R. No. 126881 October 3, 2000 FEDERICO JARANTILLA, JR., Petitioner, JR., Petitioner, LUZVIMINDA J. VILLAREAL, DIOGENES VILLAREAL and HEIRS OF TAN ENG KEE, petitioners, vs. CARMELITO JOSE, petitioners, JOSE, petitioners, vs. ANTONIETA JARANTILLA, BUENAVENTURA REMOTIGUE, vs. COURT OF APPEALS and BENGUET LUMBER COMPANY, substituted by CYNTHIA REMOTIGUE, DOROTEO JARANTILLA DONALDO EFREN C. RAMIREZ and Spouses CESAR G. represented by its President TAN ENG LAY,respondents. LAY,respondents. and TOMAS JARANTILLA, Respondents. JARANTILLA, Respondents. RAMIREZ JR. and CARMELITA C. RAMIREZ,respondents. RAMIREZ,respondents. DE LEON, JR., J .: .: LEONARDO-DE CASTRO, J.: PANGANIBAN, J .: .: FACTS: The present case stems from the complaintfiled by Antonieta A share in a partnership can be returned only after the completion of Benguet Lumber has been around even before World War II but Jarantilla against Buenaventura Remotigue, Cynthia Remotigue, the latter's dissolution, liquidation and winding up of the business. during the war, its stocks were confiscated by the Japanese. After the Federico Jarantilla, Jr., Doroteo Jarantilla and Tomas Jarantilla, for the In 1984, Villareal, Carmelito Jose and Jesus Jose, formed a war, the brothers Tan Eng Lay and Tan Eng Kee pooled their accounting of the assets and income of the co-ownership, for its partnership for the purpose of operating a restaurant. Each resources in order to revive the business. In 1981, Tan Eng Lay partition and the delivery of her share corresponding to eight percent contributed P250,000.00. In 1984, Ramirez was added as a partner caused the conversion of Benguet Lumber into a corporation called (8%), and for damages. Antonieta claimed that in 1946, she had after he contributed P250,000.00. In 1987, Jesus withdrew from the Benguet Lumber and Hardware Company, with him and his family as entered into an agreement with the defendants to engage in business partnership and his capital share of P250k was returned to him as the incorporators. In 1983, Tan Eng Kee died. Thereafter, the heirs of through the execution of a document denominated as agreed upon by the other partners. Tan Eng Kee demanded for an accounting and the liquidation of the "Acknowledgement of Participating Capital”. Antonieta also alleged Thereafter, the restaurant suffered losses. Without informing Ramirez, partnership. that she had helped in the management of the business they co- Villareal and Carmelito shut down the restaurant. They then turned Tan Eng Lay denied that there was a partnership between him and his owned without receiving any salary. Antonieta further claimed co- over the restaurant equipments to Ramirez. brother. He said that Tan Eng Kee was merely an employee of ownership of certain properties (the subject real properties) in the Later, Ramirez sent a letter to Villareal and Carmelito telling them he’s Benguet Lumber. He showed evidence consisting of Tan Eng Kee’s name of the defendants since the only way the defendants could have no longer interested in being a partner and that he’s demanding his payroll; his SSS as an employee and Benguet Lumber being the purchased these properties were through the partnership as they had shares in the partnership. Villareal and Carmelito ignored the request employee. As a result of the presentation of said evidence, the heirs no other source of income. The respondents did not deny the of Ramirez hence the latter sued them. of Tan Eng Kee filed a criminal case against Tan Eng Lay for allegedly existence and validity of the "Acknowledgement of Participating In their defense, Villareal and Carmelito said that the restaurant fabricating those evidence. Said criminal case was however Capital" and in fact used this as evidence to support their claim that equipments served as payment to Ramirez when they were delivered dismissed for lack of evidence. Antonieta’s 8% share was limited to the businesses enumerated to them; that Ramirez cannot ask for share in equity because the ISSUE: Whether or not Tan Eng Kee is a partner. therein. The respondents denied using the partnership’s income to restaurant incurred debts (P240,658.00) and irreversible business HELD: No. There was no certificate of partnership between the purchase the subject real properties. losses. Ramirez argued by saying that the equipments were merely brothers. The heirs were not able to show what was the agreement During the course of the trial at the RTC, petitioner Federico placed in their house for storage as the two partners allegedly between the brothers as to the sharing of profits. All they presented Jarantilla, Jr., who was one of the original defendants, entered into a searched for a better restaurant location; that he was not aware of were circumstantial evidence which in no way proved partnership. compromise agreement17 with Antonieta Jarantilla wherein he any losses or any indebtedness because he never took part in the It is obvious that that there was no partnership whatsoever. whatsoever. Except for a supported Antonieta’s claims and asserted that he too was entitled to management of the restaurant. firm name, there was no firm account, no firm letterheads submitted six percent (6%) of the supposed partnership in the same manner as The trial court ruled in favor of Ramirez. The Court of Appeals as evidence, no certificate of partnership, no agreement as to profits Antonieta was. affirmed the trial court and it further ordered Villareal and Carmelito to and losses, and no time fixed for the duration of the partnership. ISSUE: Whether or not the partnership subject of the pay Ramirez P253,114.00. The computation was done as follows: There was even no attempt to submit an accounting corresponding to Acknowledgement of Participating Capital funded the subject real (Original Partnership Capital – Partnership Debt = Partnership Asset) the period after the war until Kee’s death in 1984. It had no business properties. ÷ Number of partners; hence: (P1,000,000.00 – P240,658.00 = book, no written account nor any memorandum for that matter and no HELD: Under Article 1767 of the Civil Code, there are two essential P759,342.00) ÷ 3 = P253,114.00. license mentioning the existence of a partnership. elements in a contract of partnership: (a) an agreement to contribute ISSUE: Whether or not the Court of Appeals is correct. In fact, Tan Eng Lay was able to show evidence that Benguet Lumber money, property or industry to a common fund; and (b) intent to divide HELD: No. It is impossible that the said P1,000,000.00 original capital is a sole proprietorship. He registered the same as such in 1954; that the profits among the contracting parties. parties. The first element is did not fluctuate. It could not have remained stagnant. Further, the Kee was just an employee based on the latter’s payroll and SSS undoubtedly present in the case at bar, for, admittedly, all the parties Court of Appeals missed to note that one partner left and his coverage, and other records indicating Tan Eng Lay as the proprietor. in this case have agreed to, and did, contribute money and property to contribution was returned (Jesus Jose). Generally, in the pursuit of a Also, the business definitely amounted to more P3,000.00 hence if a common fund. Hence, the issue narrows down to their intent in partnership business, its capital is either increased by profits earned there was a partnership, it should have been made in a public acting as they did . It is not denied that all the parties in this case have or decreased by losses sustained. It does not remain static and instrument. agreed to contribute capital to a common fund to be able to later on unaffected by the changing fortunes of the business. But the business was started after the war (1945) prior to the share its profits. They have admitted this fact, agreed to its veracity, publication of the New Civil Code in 1950? and even submitted one common documentary evidence to prove The Supreme Court also noted that Ramirez cannot demand his Even so, nothing prevented the parties from complying with this such partnership - the Acknowledgement of Participating Capital. The equity shares from Villareal and Carmelito – because it should be the requirement. petitioner himself claims his share to be 6%, as stated in the partnership – the partners and the partnership has a separate and Also, the Supreme Court emphasized that for 40 years, Tan Eng Kee Acknowledgement of Participating Capital. However, petitioner fails to distinct personality. never asked for an accounting. The essence of a partnership is that realize that this document specifically enumerated the businesses In determining Ramirez’ share in the equity, losses must be accounted the partners share in the profits and losses. Each has the right to covered by the partnership: Manila Athletic Supply, Remotigue for. He cannot ask for an amount equivalent to his capital contribution demand an accounting as long as the partnership exists. Even if it can Trading in Iloilo City and Remotigue Trading in Cotabato City. especially in this case where the partnership incurred debts and be speculated that a scenario wherein “if excellent relations exist Since there was a clear agreement that the capital the partners losses. At any rate, Ramirez’ share is 1/3 of whatever assets the among the partners at the start of the business and all the partners contributed went to the three businesses, then there is no reason to partnership still has after debts and losses are deducted. Hence there are more interested in seeing the firm grow rather than get immediate deviate from such agreement and go beyond the stipulations in the is a need for a proper proceeding for the accounting, liquidation, and returns, a deferment of sharing in the profits is perfectly plausible.” document. There is no evidence that the subject real properties were distribution of the remaining partnership assets. A share in a But in the situation in the case at bar, the deferment, if any, had gone assets of the partnership referred to in the Acknowledgement of partnership can be returned only after the completion of the latter’s on too long to be plausible. A person is presumed to take ordinary Participating Capital. Petition denied. dissolution, liquidation and winding up of the business. care of his concerns. A demand for periodic accounting is evidence of On the issue of whether or not the turning over of the restaurant a partnership which Kee never did. equipments to Ramirez served as payment of the latter’s share, it is wrong for Villarreal and Carmelito to assert that it served as a The Supreme Court also noted: payment. Ramirez was merely made to believe that said equipments In determining whether a partnership exists, these rules shall apply:
(1) Except as provided by Article 1825, persons who are not partners as to each other are not partners as to third persons; (2) Co-ownership or co-possession does not of itself establish a partnership, whether such co-owners or co-possessors do or do not share any profits made by the use of the property; (3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property which the returns are derived; (4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment: (a) As a debt by installment or otherwise; (b) As wages of an employee or rent to a landlord; (c) As an annuity to a widow or representative of a deceased partner; (d) As interest on a loan, though the amount of payment vary with the profits of the business; (e) As the consideration for the sale of a goodwill of a business or other property by installments or otherwise.
G.R. No. 169757 November 23, 2011 CESAR C. LIRIO, doing business under the name and style of CELKOR AD SONICMIX, Petitioner, vs. WILMER D. GENOVIA, Respondent. PERALTA, J. Resp. Genovia was hired as studio manager by petitioner Lirio, owner of Celkor Ad Sonicmix Recording Studio(Celkor) particularly, to manage and operate Celkor and to promote and sell the recording studio's services tomusic enthusiasts and other prospective clients. He was to receive a monthly salary of P7,000 and an additional commission of P100.00 per hour as recordingtechnician. His work was from Monday to Friday, 9am-6pm. A few days after he started working as a studio manager, petitioner a pproached him and told him about hisproject to produce an album for his 15-year-old daughter, Celine Mei Lirio, a former talent of ABS-CBN StarRecords. Petitioner asked respondent to compose and arrange songs for Celine and promised that he (Lirio)would draft a contract to assure respondent of his compensation for such services. The album was completed and the carrier single Genovia composed and arranged was finally aired but he wasdenied his compensation by Lirio despite several demands. Lirio told Genovia that:a.He was practically a nobody and had proven nothing yet in the music industry, respondent did notdeserve a high compensation, and he should be thankful that he was given a job to feed his family.b.Genovia was entitled only to 20% of the net profit, and not of the gross sales of the album, and that thesalaries he received and would continue to receive as studio manager of Celkor would be deducted fromthe said 20% net profit share Lirio then verbally dismissed Genovia from work. Genovia filed a complaint for illegal dismissal and prayed for hisreinstatement without loss of seniority rights, or, in the alternative, that he be paid separation pay, backwagesand overtime pay; and that he be awarded unpaid commission in the amount of P2,000.00 for services renderedas a studio technician as well as moral and exemplary damages. Lirio’s defense. Respondent could not have been hired as a studio manager, since the recording studio has no personnelexcept petitioner. Respondent verbally agreed with petitioner to co-produce the album based on the following terms andconditions: (1) petitioner shall provide all the financing, equipment and recording studio; (2) Celine MeiLirio shall sing all the songs; (3) respondent shall act as composer and arranger of all the lyrics and themusic of the five songs he already composed and the revival songs; (4) petitioner shall have exclusiveright to market the album; (5) petitioner was entitled to 60% of the net profit, while respondent andCeline Mei Lirio were each entitled to 20% of the net profit; and (6) respondent shall be entitled to drawadvances of P7,000.00 a month, which shall be deductible from his share of the net profits and only untilsuch time that the album has been produced Accordingly, their relationship was an informal partnership under Article 1767 of the Civil Code because: They agreed to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves Petitioner had no control over the time and manner by which respondent composed or arrangedthe songs, except on the result thereof. Labor Arbiter ruled that there was an employee-employer relationship and not partnership and that Genovia wasillegally dismissed. NLRC reversed: Genovia failed to prove with substantial evidence tha t he was selected and engaged bypetitioner, that petitioner had the
only asto the result of his work, but also as to the means and methods of accomplishing his work. CA set aside the ruling of the NLRC. ISSUE: Whether or not the relationship between Lirio and Genovia was an informal partnership.HELD: No. It was not partnership but an employer-employee relationship. CA decision affirmed. Ratio: The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control theemployee's conduct. The most important element is the employer's control of the employee's conduct, not only asto the result of the work to be done, but also as to the means and methods to accomplish it. All the aforesaid elements a re p resent a nd was proven by Genovia through documentary evidence: (a) a document denominated as "payroll" (dated July 31, 2001 to March 15, 2002) certified correct bypetitioner which showed that respondent received a monthly salary of P7,000.00 (P3,500.00 every 15thof the month and another P3,500.00 every 30th of the month) with the corresponding deductions due to bsences incurred by respondent; and (2) copies of petty cash vouchers, showing the amounts hereceived and signed for in the payrolls. Petitioner wielded the power to dismiss as respondent stated that he was verbally dismissed bypetitioner, and respondent, thereafter, filed an action for illegal dismissal against petitioner. Petitioner certainly had the power to check on the progress and work of respondent as stated in hisPosition Paper and that it was agreed that he would help and teach respondent how to use the studioequipment. Lirio failed to prove that his relationship with respondent was one of partnership. Such claim was not supportedby any written agreement: In the payroll dated July 31, 2001 to March 15, 2002, there were ded uct ion s fro m the wages of respondent for his absence from work, which negates petitioner's cl aim that the wages paid wereadvances for respondent’s work in the partnership. It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer and theemployee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in controversiesbetween a laborer and his master, doubts reasonably arising from the evidence or in the interpretation of agreements and writing should be resolved in the former’s favor
G.R. No. 178782 September 21, 2011 JOSEFINA P. REALUBIT, Petitioner, vs. PROSENCIO D. JASO and EDEN G. JASO, Respondents. DECISION PEREZ, J.: FACTS: On 17 March 1994, petitioner Josefina Realubit (Josefina) entered into a Joint Venture Agreement with Francis Eric Amaury Biondo (Biondo), a French national, for the operation of an ice manufacturing business. With Josefina as the industrial partner and Biondo as the capitalist partner, the parties agreed that they would each receive 40% of the net profit, with the remaining 20% to be used for the payment of the ice making machine which was purchased for the business.5 For and in consideration of the sum of P500,000.00, however, Biondo subsequently executed a Deed of Assignment dated 27 June 1997, transferring all his rights and interests in the business in favor of respondent Eden Jaso (Eden), the wife of respondent Prosencio Jaso.6 With Biondo’s eventual departure from the country, the Spouses Jaso caused their lawyer to send Josefina a letter dated 19 February 1998, apprising her of their acquisition of said Frenchman’s share in the business and formally demanding an accounting and inventory thereof as well as the remittance of their portion of its profits. ISSUE: Whether or not the court may order Josefina Realubit as partner in the joint ventureto render an accounting to one who is not a partner in said joint venture. RULING: No. Generally understood to mean an organization formed for some temporary purpose, 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."27 The rule is settled that joint ventures are governed by the law on partnerships28 which are, in turn, based on mutual agency or delectus personae.29 Insofar as a partner’s conveyance of the entirety of his interest in the partnership is concerned, Article 1813 of the Civil Code provides as follows:
G.R. No. L-35469 March 17, 1932 G.R. No. 127405 September 20, 2001 E. S. LYONS, plaintiff-appellant, MARJORIE TOCAO and WILLIAM T. BELO, petitioners, vs. vs. C. W. ROSENSTOCK, Executor of the Estate of Henry W. Elser, COURT OF APPEALS and NENITA A. ANAY, respondent. deceased, defendant-appellee. RESOLUTION Harvey & O'Brien for appellant. YNARES-SANTIAGO, J .: DeWitt, Perkins & Brandy for appellee. STREET, J.: FACTS: Henry W. Elser was engaged in buying, selling, and administering real Private respondent Nenita A. Anay met petitioner William T. Belo, then estate. E. S.Lyons joined with him, the profits being shared by the two the vice-president for operations of Ultra Clean Water Purifier, through in equal parts.Lyons, whose regular vocation was that of a missionary her former employer in Bangkok. Belo introduced Anay to petitioner or missionary agent, of theMethodist Episcopal Church, went on leave Marjorie Tocao, who conveyed her desire to enter into a joint venture to the United States and was gone for nearly a year and a half. Elser with her for the importation and local distribution of kitchen cookwares made written statements showing that Lyons was, atthat time, half owner with Elser of three particular pieces of real property. Under the joint venture, Belo acted as capitalist, Tocao as president Concurrentlywith this act Lyons execute in favor of Elser a general and general manager, and Anay as head of the marketing department power of attorney empoweringhim to manage and dispose of said and later, vice-president for sales properties at will and to represent Lyons fully andamply, to the mutual advantage of both.The attention of Elser was drawn to a piece of land, The parties agreed that Belo's name should not appear in any referred to as the San JuanEstate. He obtained the loan of P50,000 to documents relating to their transactions with West Bend Company. complete the amount needed for the firstpayment on the San Juan Anay having secured the distributorship of cookware products from Estate. The lender insisted that he should procure thesignature of the the West Bend Company and organized the administrative staff and Fidelity & Surety Co. on the note to be given for said loan. the sales force, the cookware business took off successfully. They Elser mortgaged to the Fidelity & Surety Co. the equity of redemption operated under the name of Geminesse Enterprise, a sole in the property ownedby himself and Lyons on Carriedo Street to proprietorship registered in Marjorie Tocao's name. secure the liability thus assumed by it.The case for the plaintiff supposes that, when Elser placed a mortgage for P50,000upon the The parties agreed further that Anay would be entitled to: equity of redemption in the Carriedo property, Lyons, as half owner of (1) ten percent (10%) of the annual net profits of the business; saidproperty, became, as it were, involuntarily the owner of an (2) overriding commission of six percent (6%) of the overall weekly undivided interest in theproperty acquired partly by that money; and it production; is insisted for him that, in considerationof this fact, he is entitled to the (3) thirty percent (30%) of the sales she would make; and four hundred forty-six and two-thirds shares of J. K.Pickering & (4) two percent (2%) for her demonstration services. The agreement Company, with the earnings thereon, as claimed in his complaint. was not reduced to writing on the strength of Belo's assurances that he was sincere, dependable and honest when it came to financial Issue: commitments. W/N Lyons, as half owner of the Carriedoproperty, involuntarily became the owner or a co-partner of an undivided interest in the San On October 9, 1987, Anay learned that Marjorie Tocao had signed a JuanEstate, which was acquired partly by the moneyobtained through letteraddressed to the Cubao sales office to the effect that she was no an encumbrance placed on theCarriedo property. No longer the vice-president of Geminesse Enterprise.
Held: Anay attempted to contact Belo. She wrote him twice to demand h er Under our law, a trust does not necessarilyattach with respect to overriding commission for the period of January 8, 1988 to February property acquired by a personwho uses money belonging to another. 5, 1988 and the audit of the company to determine her share in the In the case atbar, there was clearly no general relation of partnership net profits. between Lyons and Elser and the mostthat can be said is that they had been co-participantsin various transactions involving real estate. Anay still rece ived her five percent (5%) overriding commission up to It isclear the Elser, in buying the San Juan Estate, wasnot acting for December 1987. The following year, 1988, she did not receive the any partnership composed for himself and Lyons, especially that the same commission although the company netted a gross sales of P latter expresslycommunicated his desire not to participate in 13,300,360.00. thisventure. Lastly, it should be noted that no moneybelonging to Lyons or any partnership composed byLyons and Elser was in fact On April 5, 1988, Nenita A. Anay filed Civil Case No. 88-509, a used by the latter in thepurchase of the San Juan Estate complaint for sum of money with damages against Marjorie D. Tocao and William Belo before the Regional Trial Court of Makati, Branch In the case of dissolution of the partnership, the assignee is entitled to 140 receive his assignor’s interest and may require an account from the date only of the last account agreed to by all the partners. The trial court held that there was indeed an "oral partnership agreement between the plaintiff and the defendants. The Court of Appeals affirmed the lower court’s decision.
Art. 1813. A conveyance by a partner of his whole interest in the partnership does not itself dissolve the partnership, or, as against the other partners in the absence of agreement, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any information or account of partnership transactions, or to inspect the partnership books; but it merely entitles the assignee to receive in accordance with his contracts the profits to which the assigning partners would otherwise be entitled. However, in case of fraud in the management of the partnership, the assignee may avail himself of the usual remedies.
ISSUE: Whether the parties formed a partnership
G.R. No. L-25532 February 28, 1969 COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. The Supreme Court held that to be considered a juridical personality, W I L L I A M J . S U T E R a n d T H E C O U R T O F T A X a partnership must fulfill these requisites: APPEALS, respondents. Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor (1) two or more persons bind themselves to contribute money, General Felicisimo R. Rosete and Special Attorneys B. Gatdula, Jr. property or industry to a common fund; and and T. Temprosa Jr. for pe titioner. A. S. Monzon, Gutierrez, Farrales and Ong for respondents. (2) intention on the part of the partners to divide the profits among REYES, J.B.L., J.: themselves. It may be constituted in any form; a public instrument is necessary only where immovable property or real rights are Facts: contributed thereto. A limited partnership, named "William J. Suter 'Morcoin' This implies that since a contract of partnership is consensual, an oral Co., Ltd.," was formed on 30 September 1947 by William J. Suter as contract of partnership is as good as a written one. the general partner, and Julia Spirig and Gustav Carlson, as the limited partners. The partners contributed, respectively, P20,000.00, In the case at hand, Belo acted as capitalist while Tocao as president P18,000.00 and P2,000.00 to the partnership. On 1 October 1947, the and general manager, and Anay as head of the marketing department limited partnership was registered with the Securities and Exchange and later, vice-president for sales. Furthermore, Anay was entitled to a Commission. percentage of the net profits of the business. In 1948, general partner Suter and limited partner Spirig got Therefore, the parties formed a partnership. married and, thereafter, on 18 December 1948, limited partner Carlson sold his share in the partnership to Suter and his wife. The sale was duly recorded with the Securities and Exchange Commission on 20 December 1948. Yes, the parties involved in this case formed a partnership
G.R. No. 127347 November 25, 1999 ALFREDO N. AGUILA, JR., petitioner, vs. HONORABLE COURT OF APPEALS and FELICIDAD S. VDA. DE ABROGAR, respondents. In April 1991, the spouses Ruben and Felicidad Abrogar entered into a loan agreement with a lending firm called A.C. Aguila & Sons, Co., a partnership. The loan was for P200k. To secure the loan, the spouses mortgaged their house and lot located in a subdivision. The terms of the loan further stipulates that in case of non-payment, the property shall be automatically appropriated to the partnership and a deed of sale be readily executed in favor of the partnership. She does have a 90 day redemption period. Ruben died, and Felicidad failed to make payment. She refused to turn over the property and so the firm filed an ejectment case against her (wherein she lost). She also failed to redeem the property within the period stipulated. She then filed a civil case against Alfredo Aguila, manager of the firm, seeking for the declaration of nullity of the deed of sale. The RTC retained the validity of the deed of sale. The Court of Appeals reversed the RTC. The CA ruled that the sale is void for it is a pactum commissorium sale which is prohibited under Art. 2088 of the Civil Code (note the disparity of the purchase price, which is the loan amount, with the actual value of the property which is after all located in a subdivision). ISSUE: Whether or not the case filed by Felicidad shall prosper.
The limited partnership had been filing its income tax returns as a corporation, without objection by the Commissioner of Internal Revenue, until in 1959 when the latter, 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 in the amount of P2,678.06 for 1954 and P4,567.00 for 1955. Partner-Spouses Suter protested the assessment.
HELD: No. Unfortunately, the civil case was filed not against the real party in interest. As pointed out by Aguila, he is not the real party in interest but rather it was the partnership A.C. Aguila & Sons, Co. The Rules of Court provide that “every action must be prosecuted and defended in the name of the real party in interest.” A real party in interest is one who would be benefited or injured by the judgment, or who is entitled to the avails of the suit. Any decision rendered against a person who is not a real party in interest in the case cannot be executed. Hence, a complaint filed against such a person should be Issue: dismissed for failure to state a cause of action, as in the case at bar. Under Art. 1768 of the Civil Code, a partnership “has a juridical Whether or not the partnership was dissolved after the personality separate and distinct from that of each of the partners.” marriage of the partners, William J. Suter and Julia Spirig Suter and The partners cannot be held liable for the obligations of the the subsequent sale to them by the remaining partner, Gustav partnership unless it is shown that the legal fiction of a different Carlson? juridical personality is being used for fraudulent, unfair, or illegal purposes. In this case, Felicidad has not shown that A.C. Aguila & Ruling: Sons, Co., as a separate juridical entity, is being used for fraudulent, unfair, or illegal purposes. Moreover, the title to the subject property is William J. Suter "Morcoin" Co., Ltd. was not a in the name of A.C. Aguila & Sons, Co. It is the partnership, not its universal partnership, but a particular one since the contributions of officers or agents, which should be impleaded in any litigation the partners were fixed sums of money, P20,000.00 by William Suter involving property registered in its name. A violation of this rule will and P18,000.00 by Julia Spirig and neither one of them was an result in the dismissal of the complaint. industrial partner. It follows that the firm was not a partnership that spouses were forbidden to enter by Article 1677 of the Civil Code of 1889 (now Article 1782 of the New Civil Code). Nor could the subsequent marriage of the partners operate to dissolve it, such marriage not being one of the causes provided for that purpose by law. The capital contributions of partners William J. Suter and Julia 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 under the Spanish Civil Code (Article 1396)
Partnership #11: Kilosbayan, Inc. vs. Guingona, Jr., 232 SCRA 110
Eddie demanded payment but Irma did not pay. A formal demand was sent by Eddie’s counsel but Irma still failed to pay so Eddie filed a case against Irma for violation of BP 22. Irma denied liability stating that the checks were merely an assurance subject to the disposition of stocks and collection of receivables. RTC found Irma guilty which was affirmed by the CA. However, when the case was pending, the partied entered into a compromise agreement and judgment was made based on such agreement. Hence, this petition. Issue: 1.
Partnership #12: Ortega vs. CA, 245 SCRA 529 Partnership #13: Reyes vs. CA, 24 SCRA 198 Partnership #14: Lim Tong Lim vs. Phil. Fishing Gear Industries, Inc. 317 SCRA 728 Partnership #15: Sharuff and Co. vs. Baloise Fire Ins. Corp., 64 Phil 258
Whether or not Irma is guilty for the violation of BP 22.
Held: No, she is not. The subject check was to be funded from the receivables to be collected and goods to sold by the partnership and only when such collectibles and sales were realized that the check can be funded. Out of the 4 checks issued, it was only one check that was dishonored which was eventually redeemed by Eddie. When the two of them agreed to dissolve the partnership, it did not automatically end the partnership since they still have collectibles and receivables; they were still on the process of winding-up the affairs of the partnership. The check was merely an evidence to Eddie’s share in the partnership property. Hence, the petition was granted and the Court acquitted Irma Idos.
Partnership #17 Philex Mining vs. CIR, 551 SCRA 428 Partnership #18: Yu vs. NLRC, 224 SCRA 75 Partnership #19: Hong Kong and Shanghai Ban vs. Jurado, 2 Phil 671 HONGKONG BANK v. JURADO & CO. G.R. No. L-414 November 9, 1903
Partnership #16: Idos vs. CA, 296 SCRA 198 FACTS: Irma Idos vs. Court of Appeals and People of the Jurado & Co. is a commercial partnership. A case for bankruptcy was filed against the partnership. One of the Philippines general partners who were expressly included in the G.R. No. 110782 September 25, 1998 proceeding was Don Ricardo Regidor. He argues that he was Facts: not properly included in the bankruptcy. Thus, he filed a Irma is a businesswoman who is engaged I leather tanning. motion to make himself a codefendant. As one of such Eddie Aracilla is her supplier of chemicals and rawhide as well partners, Don Regidor, in open court, appointed an attorney to as her business partner. The two of them entered into a argue for the firm the motion then before this court. partnership called Tagumpay Manufacturing but such was ISSUE: Whether Don Regidor can appear in the proceedings short-lived and they decided to dissolve the partnership. Upon liquidation, they had receivables and stocks amounting to 1.8 as an individual separate party from the firm.
firm. If he has this right, then every partner would have the same right. The court sees nothing in the case to indicate that his rights will not be protected by the lawyers whom the firm may see fit to employ. His motion to be made a codefendant is denied. Partnership #20
Evangelista vs. CIR, 102 Phil 140 Facts: Eufemia, Manuela, and Francisca borrowed P59,140 from their father which amount, together with their personal monies, was used by them for the purpose of buying four parcels of land. After having bought the properties, the sisters had the same rented or leased to various tenants. They appointed their brother, Simeon Evangelista, to manage their properties with full power to lease, to collect and receive rents, to issue receipts therefore, in default of such payment, to bring suits against the defaulting tenants, to sign all letters, contracts, for and in their behalf, and to endorse and deposit all notes and checks from them. Issue: Whether or not a partnership was formed Held: Pursuant to Article 1767 of the Civil Code, 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 present in the case, for, the sisters have agreed to, and did, contribute money and property to a common fund. The second element is also present for, based on the facts surrounding the case, the Court is fully satisfied that their purpose was to engage in real estate transactions for monetary gain and then divide the same among themselves. The collective effect of the circumstances is such as to leave no room for doubt on the existence of said intent in the sisters herein.
Agency #1: Philpotts vs. Phil. Manufacturing Co., 40 Phil 471 Agency #2: Rallos vs. Felix Go Chan & Sons Realty Corp., 81 SCRA 251
Facts: Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of land known as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title No. 11116 of the Registry of Cebu.They executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell such land for and in their million. Eddie had a share of 900,000 over the said stocks and behalf. After Concepcion died, Simeon Rallos sold the receivables. Irma issued 4 checks to cover such share of HELD: undivided shares of his sisters Concepcion and Gerundia to Eddie. The 1st, 2 nd, and 4th checks were encashed but the 3rd No. As a partner of Jurado & Co. he is represented by the firm Felix Go Chan & Sons Realty Corporation for the sum of
P10,686.90. New TCTs were issued to the latter. Petitioner Ramon Rallos, administrator of the Intestate Estate of Concepcion filed a complaint praying (1) that the sale of the undivided share of the deceased Concepcion Rallos in lot 5983 be unenforceable, and said share be reconveyed to her estate; (2) that the Certificate of ‘title issued in the name of Felix Go Chan & Sons Realty Corporation be cancelled and another title be issuedin the names of the corporation and the “Intestate estate of Concepcion Rallos” in equal undivided and (3) that plaintiff be indemnified by way of attorney’s fees and payment of costs of suit. Issue: Whether or not the sale fell within the exception to the general rule that death extinguishes the authority of the agent Held: Sale of land was null and void insofar as the one-half proindiviso share of Concepcion Rallos Ordered the issuance of new TCTs to respondent corporation and the estate of Concepcion in theproportion of ! share each pro-indiviso and the payment of attorney’s fees and cost of litigation Respondent filed cross claim against Simon Rallos(*Simon and Gerundia died during pendency of case) juan T. Borromeo, administrator of the Estate of Simeon Rallos was ordered to pay defendant the price of the ! share of the land (P5,343.45) plus attorney’s fees [Borromeo filed a third party complaint against Josefina Rallos, special administratrix of t he Estate of Gerundia] Dismissed without prejudice to filing either a complaint against the regular administrator of the Estate of Gerundia Rallos or a claim in the Intestate-Estate of Cerundia Rallos, covering the same subject-matter.
Agency #3: Orient Air Service & Hotel Representatives vs. CA, 197 SCRA 645 Agency #4: Litonjua, Jr. vs. Ermita Corp. 490 SCRA 204 Eduardo Litonjua, Jr. and Antonio Litonjua v. Eternit Corp. (now Eterton Multi-ResourcesCorp.), Eteroutremer, S.A. and Far East Bank & Trust Co. G.R. No. 144805 June 8, 2006 Callejo, Sr. FACTS:
Eternit Corp. is engaged in the manufactu re of roofing materials and pipe products. 90% of the shares of stocks of Eternit Corp.were owned by Eteroutremer S.A. Corporation (ESAC), a corporation organized and registered under the laws of Belgium. In 1986, the management of ESAC grew concerned about the political situation in the Philippines andwanted to stop its operations in the country. The Committee for Asia
of ESAC instructed MichaelAdams, a member of Eternit Corp.’s Board of Directors, to dispose of the eight parcels of land.Adams engaged the services of realtor/broker Lauro G. Marquez so that the prop ert ies could be offered for sale to prospective buyers.
perform all acts which the principal would have him do. This relationship can only be effected with the consent of the principal, which must not, in any way, be compelled by law or by any court. The Litonjuas failed to produce evidence any resolution of the Board of Directors of Eternit empowering the broker, president, or reg dir as its agents, to sell in its behalf, Marquez showed the property to Eduardo Litonjua, the property. The bare fact that Delsaux may have been Jr.,an d h i s b r o t h e r A n t o n i o K . L i t o n j u a . T h e authorized to sell to a certain stockholder (Ruperto Tan) the L i t o n j u a s i b l i n g s o f f e r e d t o b u y t h e p r o p e shares of stock cannot be used as basis for Litonjua’s claim r t y f o r P20,000,000.00 cash. Marquez apprised Glanville of that he had likewise been authorized by Eternit to sell the the Litonjua siblings’ offer and relayed the sameto Delsaux in land. While Glanville was the Pres and Gen Mngr of Eternit Belgium, but the latter did not respond. Glanville telexed and Adams and Delsaux were members of its Board of Delsaux in Belgium, inquiringon his position/ counterproposal Directors, the three acted for and in behalf of respondent to the offer of the Litonjua siblings. Delsaux sent a telex ESAC, and not as duly authorized agents of Eternit. o A board to Glanville stating that, based on th e “Belgian/ resolution of the grant of authority is needed to bind Eternit to S w i s s d e c i s i o n , ” t h e f i n a l o f f e r w a s any agreement on the sale of the properties. The board “US$1,000,000.00 andP2,500,000.00 to cover all existing resolution is not a mere formality but is a condition sine qua obligations prior to final liquidation. non to bind Eternit. Requisites of an agency by estoppels: 1. The principal manifested a representation of the agent’s L i t o n j u a , J r. a c c e p t e d t h e c o u n t e r p r o p o s a l o f authority or knowingly allowed the agent to assume such Delsaux. authority; 2. The third person, in good faith, relied upon such The Litonjua brothers deposited the amount of representation; 3. Relying upon such representation, such U S $ 1 , 0 0 0 , 0 0 0 . 0 0 w i t h t h e S e c u r i t y B a n k & third person has changed his position to his detriment. An TrustCompany, Ermita Branch, and drafted an Escrow agency by estoppel, which is similar to the doctrine of Agreement to expedite the sale. apparent authority, requires proof of reliance upon the representations. Proof is lacking in this case. Neither may With the assumption of Corazon Aquino as President of RP, Eternit be deemed to have ratified the transactions through the political situation in the Philippines had improved. Glanville, Delsaux and Marquez. The transactions and the Marquez received a telephone call from Glanville, communications were never submitted to the Board of advi sing that the sale would no longer proceed. Glanville Directors of Eternit for ratification. followed it up with a letter, confirming that he had been instructed by his principal to inform Marquez that the Agency #5 decision has been taken at a Board Meeting not to Doles vs. Angeles, 492 SCRA 607 sell the properties on which Eternit Corp. is situated. JOCELYN B. DOLES v. MA. AURA TINA ANGELES June 26, 2006 When apprised of this development, the Litonjuas, through G.R. No. 149353 counsel, wrote Eternit Corp., demanding payment for damages they had suffered on account of the aborted sale. FACTS: Tina Angeles filed a complaint for sum of money against EC, however, rejected their demand. Jocelyn Doles. She alleged that Doles was indebted to her. As payment for her personal loan, Doles executed a Deed of Absolute Sale covering a parcel of land. They agreed that she ISSUE: WON Marquez, Glanville, and Delsaux were authorized by must assume the existing liabilities on the land. Upon knowing respondent Eternit Corp. to act as its agents relative to the that Doles had not pay amorti, Angeles demanded for its payment but to no avail. sale of the properties of Eternit Corp. Doles admitted some of the allegations but denied her indebtedness to Angeles. She averred that she only referred her friends to Angeles whom she knew to be engaged in the HELD: business of lending money in exchange for personal checks No. In an agent-principal relationship, the personality of the through her capitalist. principal is extended through the facility of the agent. The ISSUE: Whether Jocelyn is merely an agent or representative of the alleged debtors.
HELD: Yes. Under Article 1868 of the Civil Code, the basis of agency is representation. The question of whether an agency has been created is ordinarily a question which may be established either by direct or circumstantial evidence. The question is ultimately one of intention. Agency may even be implied from the words and conduct of the parties and the circumstances of the particular case. Though the fact or extent of authority of the agents may not, as a general rule, be established from the declarations of the agents alone, if one professes to act as agent for another, she may be estopped to deny her agency both as against the asserted principal and the third persons interested in the transaction in which he or she is engaged. In this case, Doles knew that the financier of Angeles is Pua; and Angeles knew that the borrowers are friends of Doles. Both Doles and Angeles have undeniably disclosed to each other that they are representing someone else, and so both of them are estopped to deny the same. It is evident from the record that petitioner merely refers actual borrowers and then collects and disburses the amounts of the loan upon which she received a commission; and that respondent transacts on behalf of her "principal financier", a certain Arsenio Pua. If their respective principals do not actually and personally know each other, such ignorance does not affect their juridical standing as agents, especially since the very purpose of agency is to extend the personality of the principal through the facility of the agent. Agency #6:
Eurotech Industrial Technologies, Inc. vs. Cuison, 521 SCRA 584 FACTS: From January to April 1995, petitioner sold to Impact Systems various products allegedly amounting to P91,338.00 pesos. Subsequently, respondents sought to buy from petitioner one unit of sludge pump valued at P250,000.00 with respondents making a down payment of P50,000.00. When the sludge pump arrived from the United Kingdom, petitioner refused to deliver the same to respondents without their having fully settled their indebtedness to petitioner. Thus, on 28 June 1995, respondent EDWIN and Alberto de Jesus, general manager of petitioner, executed a Deed of Assignment of receivables in favor of petitioner. Impact systems is owed by ERWIN Cuizon. Despite the existence of the Deed of Assignment, respondents proceeded to collect from Toledo Power Company the amount of P365,135.29. Alarmed by this development, petitioner made several demands upon respondents to pay their obligations. As a result, respondents
were able to make partial payments to petitioner. On 7 to reimbursement of the amounts he already paid. The October 1996, petitioner's counsel sent respondents a final contract was for P95,000.00. Baluyot reassured Atty. demand letter wherein it was stated that as of 11 June 1996, Linsangan that once reimbursement is made to the respondents' total obligations stood at P295,000.00 excluding former buyer, the contract would be transferred to him. interests and attorney's fees. Because of respondents' failure to abide by said final demand letter, petitioner instituted a Atty. Linsangan agreed and gave Baluyot P35,295.00 complaint for sum of money, damages, with application for representing the amount to be reimbursed to the original buyer and to complete the down payment to preliminary attachment against herein respondents MMPCI. Baluyot issued handwritten and typewritten By way of special and affirmative defenses, respondent receipts for these payments. Contract No. 28660 has a EDWIN alleged that he is not a real party in interest in this listed price of P132,250.00. Atty. Linsangan objected to case. According to him, he was acting as mere agent of his the new contract price, as the same was not the amount principal, which was the Impact Systems, in his transaction previously agreed upon. To convince Atty. Linsangan, with petitioner and the latter was very much aware of this fact. Baluyot executed a document confirming that while the contract price is P132,250.00, Atty. Linsangan would pay only the original price of P95,000.00. ISSUE: Whether the act of Edwin in signing the Deed of Assignment binds his principal Impact Systems Later on, Baluyot verbally advised Atty. Linsangan that Contract No. 28660 was cancelled for reasons the latter could not explain. For the alleged failure of MMPCI and HELD: Baluyot to conform to their agreement, Atty. Linsangan Yes, the act of Edwin in signing the Deed of Assignment filed a Complaint for Breach of Contract and Damages against the former. binds Impact Systems The Supreme Court held that in a contract of agency, a MMPCI alleged that Contract No. 28660 was cancelled person binds himself to render some service or to do conformably with the terms of the contract because of something in representation or on behalf of another with the non-payment of arrearages. MMPCI stated that Baluyot latter's consent. Its purpose is to extend the personality of the was not an agent but an independent contractor, and as principal or the party for whom another acts and from whom such was not authorized to represent MMPCI or to use he or she derives the authority to act. It is said that the basis its name except as to the extent expressly stated in the of agency is representation, that is, the agent acts for and on Agency Manager Agreement. Moreover, MMPCI was behalf of the principal on matters within the scope of his not aware of the arrangements entered into by Atty. authority and said acts have the same legal effect as if they Linsangan and Baluyot, as it in fact received a down payment and monthly installments as indicated in the were personally executed by the principal. contract. In this case at hand, the parties do not dispute the existence of the agency relationship between respondents ERWIN as The trial court held MMPCI and Baluyot jointly and severally liable. The Court of Appeals affirmed the principal and EDWIN as agent. decision of the trial court. ISSUES: Agency #7:
Manila Memorial Park Cemetery, Inc. vs. Linsangan, 443 SCRA 377 MANILA MEMORIAL PARK CEMETERY, INC.vs. PEDRO L. LINSANGAN
1. Whether or not there was a contract of agency between Baluyot and MMPCI? 2. Whether or not MMPCI should be liable for Baluyot’s act?
FACTS: Florencia Baluyot offered Atty. Pedro L. Linsangan a lot called Garden State at the Holy Cross Memorial Park owned by petitioner (MMPCI). According to Baluyot, a former owner of a memorial lot under Contract No. 25012 was no longer interested in
HELD: First Issue. Yes. By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. As properly found both by the trial court and the Court of Appeals, Baluyot was authorized to solicit and remit to MMPCI
offers to purchase interment spaces obtained on forms provided by MMPCI. The terms of the offer to purchase, therefore, are contained in such forms and, when signed by the buyer and an authorized officer of MMPCI, becomes binding on both parties.
but in reply, Amon Trading and Juliana Marketing stated that they have already refunded the amount of undelivered bags of cement to Lines and spaces per written instructions of Sanchez.
Facts: On May 20, 1919, the plaintiffs obtained from Maria Gay a written option to purchase an estate known as "San Antonio Estate." The term of the option expired, but the plaintiffs had it extended verbally until 12 o 'clock noon of June 17, 1919.
Issue:
Second Issue. No. While there is no more question as to the agency relationship between Baluyot and MMPCI, there is no indication that MMPCI let the public, or specifically, Atty. Linsangan to believe that Baluyot had the authority to alter the standard contracts of the company. Neither is there any showing that prior to signing Contract No. 28660, MMPCI had any knowledge of Baluyot's commitment to Atty. Linsangan. Even assuming that Atty. Linsangan was misled by MMPCI's actuations, he still cannot invoke the principle of estoppel, as he was clearly negligent in his dealings with Baluyot, and could have easily determined, had he only been cautious and prudent, whether said agent was clothed with the authority to change the terms of the principal's written contract.
Whether or not there was a contract of agency Antonio Sunyantong was at the time an employee of the plaintiffs and that they reposed confidence in him and between Lines and Spaces and Tri- Realty did not mind disclosing their plans to him, concerning Held: the purchase of the aforesaid estate and the progress In a case, the Court decreed from Article 1868 that of their negotiations with Maria Gay. the basis of agency is representation. It stated that, on the part of the principal, there must be an actual intention to On a conference where Sing Juco, Sing Bengco and appoint or an intention naturally inferable from his words or Antonio Sunyantong was present, the latter suggested actions and on the part of the agent, there must be an that it would be better if they would wait for a few days intention to accept the appointment and act on it and in the elapse before accepting the terms of the transfer absence of such intent, there is generally no agency. One proposed by Maria Gay as not to give the impression factor which most clearly distinguishes agency from other that they are coveting the property. legal concepts is control; one person- the agent- agrees to act under the control or direction of the principal. In the case, the In the morning of June 17, 1919, on the midday of intention of Tri-realty was merely for Lines and Spaces, which the term of plaintiff's option to purchase was to through Sanchez, to supply them with needed bags of expire, said defendant Antonio Sunyantong called at the cement. Inasmuch as Amon Trading and Juliana Marketing house of Mari Gay when she was having breakfast, and have never directly dealt with Tri-realty, the former had no offered to buy the estate on the same terms proposed reason to doubt the request of Sanchez later on to refund the by her not yet accepted by the plaintiffs, making the value of the bags of cement to Lines and Spaces. offer to buy not for the benefit of the plaintiff's, but for own wife, his codefendant Vicenta Llorente de Sunyatong. Agency #10: Naguiat vs. CA, 412 SCRA 592
To repeat, the acts of the agent beyond the scope of his authority do not bind the principal unless the latter ratifies the same. It also bears emphasis that when the third person knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person was aware of such limits of authority, he is to blame and is not entitled to recover damages from the agent, Agency #11: Veloso vs. CA, 260 SCRA 593 unless the latter undertook to secure the principal's ratification. Agency #12: Pineda vs. CA, 226 SCRA 754 Agency #8: Orient Air Services vs. CA, 1 97 SCRA 645 refer to Agency #3 Agency #9 Amon Trading Corp. vs. CA, 477 SCRA 552
Agency #13: BPI vs. de Car ter, 47 Phil 594
In view of the opportunity that offered itself, but respecting the option granted the plaintiffs, Maria Gay communicated by telephone with Manuel Sotelo, who was acting as broker for the plaintiffs in these transactions, and told him that another buyer of the estate had presented himself who would accept the terms proposed by her and that she would like to know immediately what decision had been reached by the plaintiffs on the matter.
Agency #14: Sing Juco & Sing Bengco vs. Sunyantong & Llorente, 43 Phil 589 For their reply, Sing Bengco instructed Sotelo to inform Sing Juco & Sing Bengco v. Sunyatong & Llorente her at the time that if she did not care to wait until 12 Facts: o'clock, "ella cuidado" (equivalent to bahala siya/ ambut Tri-realty Development and Construction Corporation (1922) (sale of land, employee) sa iya; may have different interpretations). had difficulty in purchasing cement needed for its projects. Line and Spaces, represented by Eleanor Sanchez, informed Doctrines: Interpreting the phrase to mean that the plaintiffs Tri-realty that it could obtain cement to satisfaction from Amon • "Equitable trust" by virtue of which the things waived their option to buy, Maria Gay closed the sale of Trading Corp., and its sister company, Juliana Marketing. On acquired by an employee is deemed not to have the estate in favor of the defendant Antonio the strength of such representation, Tri-realty proceeded to been acquired for his own benefit or that of any other Sunyantong. order from Sanchez 6,050 bags of cement from Amon and person but for his principal, and held in trust for the Juliana. Tri-realty, through Sanchez of Lines and Spaces, paid latter in advance through manager’s checks by which Sanchez Issue: Does the plaintiff-petitioners have a remedy to issued receipts. There were deliveries at first but a balance of acquire the property? 5200 bags was not delivered. Tri-realty sent written demands
Such a determination is indispensable to an inquiry into the extent or scope of his authority. Nonetheless, it is clear in the Authorization given that it is a special power of attorney limited to the use of the coal operating contract and the clause cannot contemplate any other power not included in the enumeration or which are unrelated. Thus, Rene is not authorized to enter into a Trip Charter Party agreement with SMC. Agency #17:
Held/Ratio: YES, the plaintiff-petitioners may acquire the property by virtue of an equitable trust. The fact cannot be denied that he was the cause of the option having precipitously come to such an end. His disloyalty to his employers was responsible for Maria Gay not accepting the terms proposed by the plaintiffs, because of being certain of another less exigent buyer. Such an act of infidelity committed by a trusted Lintonjua vs. Fernandez, 427 SCRA 478 employee calculated to redound to his own benefit and to the detriment of his employers cannot pass without Agency #18: Yu Eng Cho vs. Pan American legal sanction. World Airways, Inc. 328 SCRA 717 In the North American law such sanction is expressly recognized, and the transaction of this nature might be Agency #19: regarded as an "equitable trust" by virtue of which the Manila Remnants vs. CA, 191 SCRA 622 things acquired by an employee is deemed not to have been acquired for his own benefit or that of any other [G.R. No. 82978. November 22, 1990.]
informing him that Manila Remnant was terminating its existing collection agreement with his firm on account of the considerable amount of discrepancies and irregularities. As a consequence, Artemio Valencia was removed as President by the Board of Directors of Manila Remnant. Therefore, Valencia stopped transmitting Ventanilla's monthly installments. A.U. Valencia and Co. sued Manila Remnant to impugn the abrogation of their agency agreement. The court ordered all lot buyers to deposit their monthly amortizations with the court. But A.U. Valencia and Co. wrote the Ventanillas that it was still authorized by the court to collect the monthly amortizations and requested them to continue remitting their amortizations with the assurance that said payments would be deposited later in court.
Thereafter, the trial court issued an order prohibiting A.U. Valencia and Co. from collecting the monthly installments. Valencia complied with the court's order of submitting the list of all his clients but said list excluded the name of the person but for his principal, and held in trust for the Ventanillas. Manila Remnant caused the publication in THE MANILA REMNANT CO., INC., Petitioner, v. THE the Times Journal of a notice cancelling the contracts to sell of latter. (There is no assignment of errors in this case.) HONORABLE COURT OF APPEALS and OSCAR some lot buyers. To prevent the effective cancellation of their Agency #15: V E N T A N I L L A , J R . a n d C A R M E N G L O R I A contracts, Artemio Valencia filed a complaint for specific Toyota Shaw, Inc. vs. CA, 249 SCRA 320 DIAZ, Respondents. performance with damages against Manila Remnant
Agency #16 Bacaltos Coal Mines vs CA, 245 SCRA 460 FACTS Rene Savellon was given an Authorization by Bacaltos Coal Mines (BMC) to use the coal operating contract for any
legitimate purpose it may serve. Representing BMC, Savellon then entered into a Trip Charter Party agreement with San Miguel Corporation (SMC) as the charter. However, the vessel was able to make only one trip contrary to the agreed three trips. SMC demands for specific performance and damages. BMC countered that the authorization given to Rene Savellon did not include the power to enter into any contract with SMC. ISSUE Is Savellon duly authorized to enter into a Trip Charter Party agreement? RULING No.
FACTS: Petitioner Manila Remnant Co., Inc. is the owner of parcels of land situated in Quezon City and constituting the Capital Homes Subdivision Nos. I and II. Manila Remnant and A.U. Valencia & Co. Inc. entered into a contract entitled "Confirmation of Land Development and Sales Contract" to formalize a prior verbal agreement whereby A.U. Valencia and Co., Inc. was to develop the aforesaid subdivision for a consideration of 15.5% commission. At that time the President of both A.U. Valencia and Co. Inc. and Manila Remnant Co., Inc. was Artemio U. Valencia. Manila Remnant thru A.U. Valencia and Co. executed two "contracts to sell" covering Lots 1 and 2 of Block 17 in favor of Oscar C. Ventanilla and Carmen Gloria Diaz. Ten days after the signing of the contracts with t he Ventanillas, Artemio U. Valencia, without the knowledge of the Ventanilla couple, sold Lots 1 and 2 of Block 17 again, to Carlos Crisostomo, one of his sales agents without any consideration. Artemio Valencia then transmitted the fictitious Crisostomo contracts to Manila Remnant while he kept in his files the contracts to sell in favor of the Ventanillas. All the amounts paid by the Ventanillas were deposited in Valencia's bank account. Upon orders of Artemio Valencia, the monthly payments of the Ventanillas were remitted to Manila Remnant as payments of Crisostomo for which the former issued receipts in favor of Crisostomo.
Persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but also the nature and extent of the authority. Since the principal subject of the Authorization is the coal operating contract, SMC should have required its presentation to determine what it is and how it may be used by Savellon. General Manager Karl Landahl, wrote Artemio Valencia
The Ventanillas, believing that they had already remitted enough money went directly to Manila Remnant and offered to pay the entire outstanding balance of the purchase price. Unfortunately, they discovered from Gloria Caballes that their names did not appear in the records of A.U. Valencia and Co. as lot buyers. Also, Manila Remnant refused the offer of the Ventanillas to pay for the remainder of the contract price. The Ventanillas then commenced an action for specific performance, annulment of deeds and damages against Manila Remnant, A.U. Valencia and Co. and Carlos Crisostomo. The trial court found that Manila Remnant could have not been dragged into this suit without the fraudulent manipulations of Valencia. Subsequently, Manila Remnant and A.U. Valencia and Co. elevated the lower court's decision to the Court of Appeals through separate appeals. On October 13, 1987, the Appellate Court affirmed in toto the decision of the lower court. Reconsideration sought by petitioner Manila Remnant was denied, hence the instant petition. ISSUE: Whether or not petitioner Manila Remnant should be held solidarily liable together with A.U. Valencia and Co. and Carlos Crisostomo for the payment of moral, exemplary damages and attorney's fees in favor of the Ventanillas HELD:
YES. In the case at bar, the Valencia realty firm had clearly overstepped the bounds of its authority as agent — and for that matter, even the law — when it undertook the double sale of the disputed lots. Such being the case, the principal, Manila Remnant, would have been in the clear pursuant to Article 1897 of the Civil Code which states that "(t)he agent who acts as such is not personally liable to that party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers." However, the unique relationship existing between the principal and the agent at the time of the dual sale must be underscored. Bear in mind that the president then of both firms was Artemio U. Valencia, the individual directly responsible for the sale scam. Hence, despite the fact that the double sale was beyond the power of the agent, Manila Remnant as principal was chargeable with the knowledge or constructive notice of that fact and not having done anything to correct such an irregularity was deemed to have ratified the same. More in point, we find that by the principle of estoppel, Manila Remnant is deemed to have allowed its agent to act as though it had plenary powers.
Casteel's application, one of them was Felipe Deluao, uncle of Casteel Casteel sought financial aid from his uncle Deluao with which to finance theneeded improvements on the fishpond. Hence, a wide productive fishpond was built. Inocencia Deluao (wife of Felipe Deluao) and Nicanor Casteel executed a contract denominated as “contract of service” whereby Deluao hires and employs the Casteel. The latter will be the Manager and sole buyer of all the produce of the fish that will be produced from said fishpond while the former will be the administrator of the same she having financed the construction and improvement ofsaid fishpond. At the same time, Inocencia Deluao executed a special power of attorney in favor of JesusDonesa, extending to the latter the authority to represent her in the administration of the fishpond. ISSUE: Whether the agreement made by the parties created a contract of trust. HELD: The evidence preponderates in favor of the view that the initial intention of the parties was not to form a trust or coownership but to establish a partnership — Inocencia Deluao as capitalist partner and Casteel as industrial partner — the ultimate undertaking of which was to divide into two equal parts such portion ofthe fishpond as might have been developed by the amount extended by the plaintiffs-appellees, with thefurther provision that Casteel should reimburse the expenses incurred by the appellees over one-half ofthe fishpond that would pertain to him. This can be gleaned, among others, from the letter of Casteel toFelipe Deluao showing the intention to divide t he fishpond. Trust #2
Article 1911 of the Civil Code provides: "Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers." In such a situation, both the principal and the agent may be considered as joint feasors whose liability is joint and solidary (Verzosa vs. Lim, 45 Phil. 416). In essence, therefore, the basis for Manila Remnant's solidary liability is estoppel which, in turn, is rooted in the principal's neglectfulness in failing to properly supervise and control the affairs of its agent and to adopt the needed Government vs. Abadilla, 26 Phil 642 measures to prevent further misrepresentation. As a consequence, Manila Remnant is considered estopped from pleading the truth that it had no direct hand in the deception Trust #3: Mindanao Dev’t Authority vs. CA, employed by its agent. That the principal might not have had 113 SCRA 429 actual knowledge of the agent's misdeed is of no moment.
Agency #20: Terrado vs. CA, 131 SCRA 371
Trust #4: Canezo vs. Rojas, 538 SCRA 242
Trust #1: Deluao vs. Casteel, 22 SCRA 231 DELUAO VS. CASTEEL 22 scra 231
Trust #5: Penalber vs. Ramos, 577 SCRA 50
FACTS: Nicanor Casteel filed a fishpond application for a big tract of swampy land in theMunicipality of Padada, Davao for three times since 1940 but no action was taken thereon by the authorities concerned. Meanwhile, several applications were submitted by other persons for portions of t he area covered by
Trust #6: Ramos vs. Ramos, 61 SCRA 284 EMILIANO B. RAMOS, ET AL. vs. GREGORIA T. RAMOS, ET AL. G.R. No. L-19872 December 3, 1974 Ponente: Aquino,J. Facts:
The spouses Martin Ramos and Candida Tanate died. They were survived by their three legitimate children Jose, Agustin and Granada. Martin Ramos was also survived by his seven natural children named Atanacia, Timoteo, Modesto, Manuel, Emiliano, Maria and Federico. special proceeding was instituted for the settlement of the intestate estate of the said spouses A project of partition dated April 25, 1913 was submitted. It was signed by the three legitimate children, Jose, Agustin and Granada; by the two natural children, Atanacia and Timoteo, and by Timoteo Zayco in representation of the other five natural children who were minors. It was sworn to before the justice of the peace. Partition was approved. Plaintiffs question the partition saying that they are entitled to share banking on the argument that partition was an express trust. Issue: Whether there is express trust in the case. Ruling: The plaintiffs did not prove any express trust in this case. The expediente of the intestate proceeding, Civil Case No. 217, particularly the project of partition, the decision and the manifestation as to the receipt of negatives the existence of an express trust. Those public documents prove that the estate of Martin Ramos was settled in that proceeding and that adjudications were made to his seven natural children. A trust must be proven by clear, satisfactory, and convincing evidence. It cannot rest on vague and uncertain evidence or on loose, equivocal or indefinite declarations As already noted, an express trust cannot be proven by parol evidenceNeither have the plaintiffs specified the kind of implied trust contemplated in their action. We have stated that whether it is a resulting or constructive trust, its enforcement may be barred by laches.Those transactions prove that the heirs of Jose Ramos had repudiated any trust which was supposedly constituted over Hacienda Calaza in favor of the plaintiffs.
Trust #7: Morales vs. CA, 247 SCRA 282 FACTS Spouses Ortiz bought the land and the 2-storey residential house thereon from the owner Celso Avelino. The land and building then were occupied by the family of one of Celso’s sister, Priscilla who promised to vacate the premises once they were notified by Celso. Despite due notice, the family of Priscilla refused to vacate and claimed that they inherited the property from their parents who were the real owners because Celso merely acquired the property since their father entrusted him with the money to buy it. ISSUE Is there implied trust between Celso and his father?
None. It is very apparent that in order for implied trust to exist there must be evidence of an equitable obligation of the trustee to convey, which circumstance or requisite is absent in this case. What is instead clear from the evidence is Celso Avelino's absolute ownership of the disputed property, both as to the land and the residential house which was sold to the spouses Ortiz. In addition Article 1448 of the New Civil Code expressly provides that if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.
Trust #8: Mariano vs. Judge De Vega, 148 SCRA 342 MARIANO v. THE HON. JUDGE JESUS R. DE VEGA G.R. No. L-59974. March 9, 1987.
No. In view of their lack of a clear repudiation of the coownership, duly communicated to the petitioners (the other co-owners), private respondents cannot acquire the shares of the petitioners by prescription. The record in the Office of the Assessor is not the sufficient repudiation and communication contemplated by the law. Neither may the private respondents’ possession of the premises militate against petitioners’ claim. After all, co-owners are entitled to be in possession of the premises. The existence of the co-ownership here argues against the theory of implied trust, for then a co-owner possesses coowned property not in behalf of the other co-owners but in his own behalf.
Trust #9: Diaz vs. Gorricho & Aguado, 103 Phil 266
Trust #10: Carantes vs. CA, 76 SCRA 514 PARS, J,; G.R. No. L-33360 April 25, 1977 FACTS: MAXIMINO CARANTES (Substituted by Engracia Mabanta spouses Urbano Panganiban and Roberta Espino owned, as Carantes), petitioner, You're Reading a Preview conjugal property, during their lifetime 29 parcels of vs. unregistered Roberta Espino died intestate and without debts. COURT OF APPEALS, BILAD CARANTES, LAURO She left her husband, Urbano Panganiban, and their two CARANTES, EDUARDO CARANTES and MICHAEL Unlock full access with a free trial. legitimate children, Mercedes and Gaudencia as her only TUMPAO, respondents, forced heirs. Urbano Panganiban also died also intestate and Facts: Mateo Carantes, original owner of Lot No. 44 situated without debts, leaving as his only compulsory heirs the at Loakan, Baguio City, died in 1913 leaving his widow children of Gaudencia (who together with her sister Mercedes, Ogasia, and Download six children, With namely,Free Bilad,Trial Lauro, Crispino, had predeceased their father) who are now petitioners herein Maximino, Apung and Sianang,. In 1930, the government, in and his legitimate children with his second wife, Atanacia order to expand the landing field of the Loakan Airport, filed Agustin, who are the private respondents herein. for the expropriation of a portion of Lot. No. 44. Said lot was After Urbano’s death, petitioners instituted an action with the subdivided into Lots. No. 44A to 44E for the purpose. then CFI of Bulacan for partition and delivery of possession of In 1913, Maximino Carrantes (MAX) was appointed the their corresponding shares in the conjugal estate of judicial administrator of the estate of Mateo. Four heirs, decedents-spouses Urbano and Roberta consisting of subject namely, Bilad, Lauro, Sianang, and Crisipino, executed a 29 parcels of unregistered land. Petitioners filed the case deed denominated “Assignment of Right to Inheritance” because since the death of Urbano, their grandfather, in 1952, assigning to Max their rights over said lot in 1939. The stated private respondents (his children by the second marriage) had monetary consideration is P1.00. On same date, Max sold Lot taken possession of the whole conjugal property and Nos. 44B and 44C to the government. One year later the appropriated to themselves to the exclusion of petitioners the Court of First Instance, upon joint petition of the Carrantes products coming from the 29 parcels of land. heirs, issued an order cancelling O.C.T. No. 3 and TCT No. 2533 was issued in its place. On 16 March 1940, Max registered the deed of “Assignment of Right to Inheritance”. Thus, TCT No. 2533 was cancelled Whether private respondents had openly and effectively and TCT 2540 was issued in the name of Max. A formal deed repudiated the co-ownership or constructive trust over the of Sale was also executed by Max on the same date in favor subject property. of the government. Hence, TCT 2540 was cancelled and new TCTs were issued in favor of the government and Max, HELD: respectively. On 4 Sept. 1958, Bilad, Lauro, and Crispino, ISSUE:
along with the surviving heirs of Apung and Sianang filed complaint in the CFI. They claimed that the execution of the deed of assignment was attended by fraud. The trial court decided that the action of the heirs had already prescribed since an action on fraud prescribes on four years from discovery of such, in this case, on 16 March 1940 when Max registered the deed of assignment. The Court of Appeals reversed and found that a constructive trust was created. Hence, the present petition. Issue: 1. whether a constructive trust involves a fiduciary relationship? 2. Whether action had already prescribed? Held: 1. The court, assuming that there was fraud, and in turn, a constructive trust in favor of the other heirs, said that constructive trust does not involve a promise nor fiduciary relations. Hence, the respondent court’s conclusion that the rule on constructive notice does not apply because there was a fiduciary relationship between the parties lacks the necessary premise. 2. Action had already prescribed because there was constructive notice to the heirs when Maximino registered the deed of assignment with the register of deeds on 16 March 1940. Such date is the reckoning point of counting prescription based on fraud. Anent respondent court’s contention that constructive trust is imprescriptible, the court said that it is untenable. It is already settled that constructive trusts prescribes in 10 years. In this case, the ten year period started on 16 March 1940. And since the respondents commenced the action only on 4 Sept. 1958, the same is barred by prescription.
Trust #11: PNB vs. CA, 217 SCRA 347 Trust #12: Cortez vs. Oliva, 33 Phil 480 Romana Cortes, et al. vs. Florencio Oliva G.R. No. L-10104 February 10, 1916 Facts: The plaintiffs are heirs of Pio Oliva who owned a large machine used for grinding sugar cane. Pio and his brother, Florencio, jointly owned another smaller machine used for the same purpose. The large machine was owned outright by Pio while the smaller machine was owned by both the brothers. Florencio was an owner of a hacienda while Pio was a tenant thereon. The two machines were installed and used in the hacienda. However, upon the breakout of the Spanish revolution, the hacienda and the machines were abandoned. Florencio only went back to the hacienda when it was already peaceful and found the machines to be in need of repair. He spent for the repairs of both machines but it was only the large machine that was used while the smaller machine was never sold despite efforts. Pio died and his heirs sued Florencio for unlawfully taking possession of the machines and claimed that
they were the true owners thereof. Florencio, on the other hand, stated that he had a claim over the machines because Pio was indebted to him. Hence, this petition. Issue: 1. Whether or not the heirs own the machines. Held: As to the large machine, no. The action against Florencio had already prescribed since he had a claim of ownership over such machine for more than 4 years. Florencio regarded himself as the lawful owner of the machine at the time when he wrote a letter to one of the plaintiffs explaining that he was keeping the machine because of Pio’s indebtedness. As to the smaller machine, yes. The brothers had joint ownership over the machine. Even if Florencio held the machine for a long period of time and exercised acts of ownership, there was no sufficient ground for him to interfere in the possession of such machine under a claim of ownership since there must be a clear showing that Pio repudiated his claim over such machine. The Court stated that the smaller machine must be sold and that the proceeds must be partitioned between Pio’s heirs and Florencio. Hence, the Court affirmed the decision of the lower court without prejudice to the filing of a case by the heirs for the selling and partitioning of the proceeds from the smaller machine.
