Campos Rueda & Co v Pacific Commercial (44 Phil 916)

Facts:
Campos, Rueda & Co., a limited partership, is ide!ted to the appellats: Pacific
Commercial Co. , "siatic Petroleum Co, ad #teratioal $a%i& Corporatio amouti&
to ot less tha P1,'''.'' ((hich (ere ot paid more tha )' da*s prior to the date of the
fili& !* petitioers of the applicatio for volutar* isolvec*).
+he trial court deied their petitio o the &roud that it (as ot prove, or alle&ed, that
the mem!ers of the firm (ere isolvet at the time the applicatio (as filed. #t also held
that the parters are persoall* ad solidaril* lia!le for the cose,ueces of the
trasactios of the partership.
#ssue:
-hether or ot a limited partership ma* !e held to have committed a act of isolvec*.
.eld:
/es. " limited partership0s 1uridical persoalit* is differet from the persoalit* of its
mem!ers. 2 &eeral priciple, the limited partership must as(er for ad suffer the
cose,uece of its acts. 3der our #solvec* 4a(, oe of the acts of !a%ruptc* upo
(5c a ad1udicatio of ivolutar* isolvec* ca !e predicated is the failure to pa*
o!li&atios.
+he failure of Campos, Rueda & Co., to pa* its o!li&atios costitutes a act (5c is
specificall* provided for i the #solvec* 4a( for declaratio of ivolutar* isolvec*.
+he petitioers have a ri&ht to a 1udicial decree declari& the ivolutar* isolvec* of said
partership.
6va&elista, et al. v. C#R, 7R 8o. 499996, 2cto!er 1:, 19:;
Facts:
.erei petitioers see% a revie( of C+"0s decisio holdi& them lia!le for icome
ta<, real estate dealer0s ta< ad residece ta<. "s stipulated, petitioers !orro(ed from
their father a certai sum for the purpose of !u*i& real properties. -ithi Fe!ruar* 194)
to "pril 1994, the* have !ou&ht parcels of lad from differet persos, the maa&emet of
said properties (as char&ed to their !rother =imeo evideced !* a documet. +hese
properties (ere the leased or reted to various teats.
2 =eptem!er 19:4, C#R demaded the pa*met of icome ta< o corporatios,
real estate dealer0s fi<ed ta<, ad corporatio residece ta< to (hich the petitioers see%
to !e a!solved from such pa*met.

#ssue: -hether petitioers are su!1ect to the ta< o corporatios.

Ruli&:
+he Court ruled that (ith respect to the ta< o corporatios, the issue hi&es o
the meai& of the terms >corporatio? ad >partership? as used i =ectio @4 (provides
that a ta< shall !e levied o ever* corporatio o matter ho( created or or&aiAed e<cept
&eeral co9parterships) ad B4 (provides that the term corporatio icludes amo&
others, partership) of the 8#RC. Pursuat to "rticle 1;6;, 8CC (provides for the cocept
of partership), its essetial elemets are: (a) a a&reemet to cotri!ute moe*, propert*
or idustr* to a commo fudC ad (!) itet to divide the profits amo& the cotracti&
parties.
#t is of the opiio of the Court that the first elemet is udou!tedl* preset for petitioers
have a&reed to, ad did, cotri!ute moe* ad propert* to a commo fud. "s to the
secod elemet, the Court full* satisfied that their purpose (as to e&a&e i real estate
trasactios for moetar* &ai ad the divide the same amo& themselves as idicated
!* the follo(i& circumstaces:
1. +he commo fud (as ot somethi& the* foud alread* i e<istece or a propert*
iherited !* them pro idiviso. #t (as created purposel*, 1oitl* !orro(i& a su!statial
portio thereof i order to esta!lish said commo fudC
@. +he* ivested the same ot merel* i oe trasactio, !ut i a series of
trasactios. +he um!er of lots ac,uired ad trasactios uderta%e is stro&l* idicative
of a patter or commo desi& that (as ot limited to the coservatio ad preservatio of
the aforemetioed commo fud or eve of the propert* ac,uired. # other (ords, oe
caot !ut perceive a character of ha!ituall* peculiar to !usiess trasactios e&a&ed i
the purpose of &aiC
). =aid properties (ere ot devoted to residetial purposes, or to other persoal uses,
of petitioers !ut (ere leased separatel* to several persosC
4. +he* (ere uder the maa&emet of oe perso (here the affairs relative to said
properties have !ee hadled as if the same !elo&ed to a corporatio or !usiess ad
eterprise operated for profitC
:. 6<isted for more tha te *ears, or, to !e e<act, over fiftee *ears, sice the first
propert* (as ac,uired, ad over t(elve *ears, sice =imeo 6va&elista !ecame the
maa&erC
6. Petitioers have ot testified or itroduced a* evidece, either o their purpose i
creati& the set up alread* adverted to, or o the causes for its cotiued e<istece.
+he collective effect of these circumstaces is such as to leave o room for dou!t o the
e<istece of said itet i petitioers herei.
"lso, petitioers0 ar&umet that their !ei& mere co9o(ers did ot create a
separate le&al etit* (as re1ected !ecause, accordi& to the Court, the ta< i ,uestio is
oe imposed upo DcorporatiosD, (hich, strictl* spea%i&, are distict ad differet from
DpartershipsD. -he the 8#RC icludes DpartershipsD amo& the etities su!1ect to the
ta< o DcorporatiosD, said Code must allude, therefore, to or&aiAatios (hich are ot
ecessaril* DpartershipsD, i the techical sese of the term. +he ,ualif*i& e<pressio
foud i =ectio @4 ad B4(!) clearl* idicates that a 1oit veture eed ot !e uderta%e
i a* of the stadard forms, or i coformit* (ith the usual re,uiremets of the la( o
parterships, i order that oe could !e deemed costituted for purposes of the ta< o
corporatios. "ccordi&l*, the la(ma%er could ot have re&arded that persoalit* as a
coditio essetial to the e<istece of the parterships therei referred to. For purposes of
the ta< o corporatios, 8#RC icludes these parterships 9 (ith the e<ceptio ol* of dul*
re&istered &eeral co parterships 9 (ithi the purvie( of the term Dcorporatio.D #t is,
therefore, clear that petitioers herei costitute a partership, isofar as said Code is
cocered ad are su!1ect to the icome ta< for corporatios.
"s re&ards the residece of ta< for corporatios (=ectio @ of C" 8o. 46:), it is aalo&ous
to that of sectio @4 ad B4 (!) of the 8#RC. #t is apparet that the terms DcorporatioD ad
DpartershipD are used i !oth statutes (ith su!statiall* the same meai&.
Cose,uetl*, petitioers are su!1ect, also, to the residece ta< for corporatios.
Fiall*, o the issues of !ei& lia!le for real estate dealer0s ta<, the* are also lia!le for the
same !ecause the records sho( that the* have ha!ituall* e&a&ed i leasi& said
properties (hose *earl* &ross retals e<ceeds P),'''.'' a *ear.
+2C"2 E. C"
7.R. 8o. 1@;4':C 2cto!er 4, @'''
F"C+=:
Private respodet 8eita ". "a* met petitioer -illiam +. $elo, the the vice9presidet
for operatios of 3ltra Clea -ater Purifier, throu&h her former emplo*er i $a&%o%. $elo
itroduced "a* to petitioer Far1orie +ocao, (ho cove*ed her desire to eter ito a 1oit
veture (ith her for the importatio ad local distri!utio of %itche coo%(ares
3der the 1oit veture, $elo acted as capitalist, +ocao as presidet ad &eeral maa&er,
ad "a* as head of the mar%eti& departmet ad later, vice9presidet for sales
+he parties a&reed that $eloGs ame should ot appear i a* documets relati& to their
trasactios (ith -est $ed Compa*. "a* havi& secured the distri!utorship of
coo%(are products from the -est $ed Compa* ad or&aiAed the admiistrative staff
ad the sales force, the coo%(are !usiess too% off successfull*. +he* operated uder the
ame of 7emiesse 6terprise, a sole proprietorship re&istered i Far1orie +ocaoGs ame.
+he parties a&reed further that "a* (ould !e etitled to:
(1) te percet (1'H) of the aual et profits of the !usiessC
(@) overridi& commissio of si< percet (6H) of the overall (ee%l* productioC
()) thirt* percet ()'H) of the sales she (ould ma%eC ad
(4) t(o percet (@H) for her demostratio services. +he a&reemet (as ot reduced to
(riti& o the stre&th of $eloGs assuraces that he (as sicere, depeda!le ad hoest
(he it came to fiacial commitmets.
2 2cto!er 9, 19B;, "a* leared that Far1orie +ocao had si&ed a letter addressed to
the Cu!ao sales office to the effect that she (as o lo&er the vice9presidet of
7emiesse 6terprise.
"a* attempted to cotact $elo. =he (rote him t(ice to demad her overridi&
commissio for the period of Iauar* B, 19BB to Fe!ruar* :, 19BB ad the audit of the
compa* to determie her share i the et profits.
"a* still received her five percet (:H) overridi& commissio up to Jecem!er 19B;. +he
follo(i& *ear, 19BB, she did ot receive the same commissio althou&h the compa*
etted a &ross sales of P 1),)'',)6'.''.
2 "pril :, 19BB, 8eita ". "a* filed Civil Case 8o. BB9:'9, a complait for sum of
moe* (ith dama&es a&aist Far1orie J. +ocao ad -illiam $elo !efore the Re&ioal
+rial Court of Fa%ati, $rach 14'
+he trial court held that there (as ideed a Doral partership a&reemet !et(ee the
plaitiff ad the defedats. +he Court of "ppeals affirmed the lo(er court0s decisio.
#==36: -hether the parties formed a partership
.64J: /es, the parties ivolved i this case formed a partership
+he =upreme Court held that to !e cosidered a 1uridical persoalit*, a partership must
fulfill these re,uisites:
(1) t(o or more persos !id themselves to cotri!ute moe*, propert* or idustr* to a
commo fudC ad
(@) itetio o the part of the parters to divide the profits amo& themselves. #t ma* !e
costituted i a* formC a pu!lic istrumet is ecessar* ol* (here immova!le propert*
or real ri&hts are cotri!uted thereto.
+his implies that sice a cotract of partership is cosesual, a oral cotract of
partership is as &ood as a (ritte oe.
# the case at had, $elo acted as capitalist (hile +ocao as presidet ad &eeral
maa&er, ad "a* as head of the mar%eti& departmet ad later, vice9presidet for
sales. Furthermore, "a* (as etitled to a perceta&e of the et profits of the !usiess.
+herefore, the parties formed a partership.