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Casteel borrowed money from the Deluaos to improve a fishpond he occupied. In return, he entered into a partnership agreement to divide the fishpond equally with the Deluaos after it was awarded. Casteel was eventually awarded the fishpond by the DANR Secretary. However, the court held that the partnership agreement to divide the fishpond after award was invalid and void as against public policy, as partnerships cannot be formed for illegal purposes according to prohibitory laws. Since the contract was void, the parties could not be made to formally transfer half the fishpond or get approval for the division as agreed in the invalid partnership agreement.
Casteel borrowed money from the Deluaos to improve a fishpond he occupied. In return, he entered into a partnership agreement to divide the fishpond equally with the Deluaos after it was awarded. Casteel was eventually awarded the fishpond by the DANR Secretary. However, the court held that the partnership agreement to divide the fishpond after award was invalid and void as against public policy, as partnerships cannot be formed for illegal purposes according to prohibitory laws. Since the contract was void, the parties could not be made to formally transfer half the fishpond or get approval for the division as agreed in the invalid partnership agreement.
Casteel borrowed money from the Deluaos to improve a fishpond he occupied. In return, he entered into a partnership agreement to divide the fishpond equally with the Deluaos after it was awarded. Casteel was eventually awarded the fishpond by the DANR Secretary. However, the court held that the partnership agreement to divide the fishpond after award was invalid and void as against public policy, as partnerships cannot be formed for illegal purposes according to prohibitory laws. Since the contract was void, the parties could not be made to formally transfer half the fishpond or get approval for the division as agreed in the invalid partnership agreement.
INOCENCIA DELUAO and FELIPE DELUAO vs. NICANOR CASTEEL
and JUAN DEPRA G.R. No. L-21906August 29, 1969 Castro, J.: FACTS: Casteel is the original occupant and applicant of a fishpond area since before the last World War. He wanted to preclude subsequent applicants from entering and spreading themselves within the area by expanding his occupation thereof by the construction of dikes and the cultivation of marketable fishes. Thus, he borrowed P27,000 from the Deluaos to finance needed improvements for the fishpond, and was completed by force of this circumstance to enter into the contract of partnership, with an agreement to divide the fishpond after award. Eventually, Casteel administered the said property and single-handedly opposed rival applicants who occupied portions of the fishpond area. He relentlessly pursued his claim to the said area up to the Office of the DANR Secretary, until it was finally awarded to him. ISSUE: Whether or not the parties can now validly divide the said fishpond as agreed upon by them? HELD: NO. A partnership formed to divide a fishpond into equalparts is null and void as being against public policy. A partnership cannot be formed for an illegal purpose because it is against several prohibitory laws. And since the contract is null and void, the party cannot be made to execute a formal transfer of one-half of the fishpond and to secure approval of the same as agreed upon. A contract of partnership to exploit a fishpond pending its award to any qualified party or applicant is VALID BUT a contract of partnership to divide the fishpond after such award is ILLEGAL. one of the causes of dissolution is any event which make it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership.
AMPARO G. PEREZ, ET AL., Plaintiffs and Appellees, PHILIPPINE NATIONAL BANK, Binalbagan Branch, ET AL., Defendants and Appellants. G.R. No. L-21813 July 30, 1966