Vous êtes sur la page 1sur 12

G.R. No.

December 1, 2010
and TOMAS JARANTILLA, Respondents.
FACTS: The present case stems from the complaintfiled by Antonieta
Jarantilla against Buenaventura Remotigue, Cynthia Remotigue,
Federico Jarantilla, Jr., Doroteo Jarantilla and Tomas Jarantilla, for the
accounting of the assets and income of the co-ownership, for its
partition and the delivery of her share corresponding to eight percent
(8%), and for damages. Antonieta claimed that in 1946, she had
entered into an agreement with the defendants to engage in business
through the execution of a document denominated as
"Acknowledgement of Participating Capital. Antonieta also alleged
that she had helped in the management of the business they coowned without receiving any salary. Antonieta further claimed coownership of certain properties (the subject real properties) in the
name of the defendants since the only way the defendants could have
purchased these properties were through the partnership as they had
no other source of income. The respondents did not deny the
existence and validity of the "Acknowledgement of Participating
Capital" and in fact used this as evidence to support their claim that
Antonietas 8% share was limited to the businesses enumerated
therein. The respondents denied using the partnerships income to
purchase the subject real properties.
During the course of the trial at the RTC, petitioner Federico
Jarantilla, Jr., who was one of the original defendants, entered into a
compromise agreement17 with Antonieta Jarantilla wherein he
supported Antonietas claims and asserted that he too was entitled to
six percent (6%) of the supposed partnership in the same manner as
Antonieta was.
ISSUE: Whether or not the partnership subject of the
Acknowledgement of Participating Capital funded the subject real
HELD: Under Article 1767 of the Civil Code, there are two essential
elements in a contract of partnership: (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
undoubtedly present in the case at bar, for, admittedly, all the parties
in this case have agreed to, and did, contribute money and property to
a common fund. Hence, the issue narrows down to their intent in
acting as they did. It is not denied that all the parties in this case have
agreed to contribute capital to a common fund to be able to later on
share its profits. They have admitted this fact, agreed to its veracity,
and even submitted one common documentary evidence to prove
such partnership - the Acknowledgement of Participating Capital. The
petitioner himself claims his share to be 6%, as stated in the
Acknowledgement of Participating Capital. However, petitioner fails to
realize that this document specifically enumerated the businesses
covered by the partnership: Manila Athletic Supply, Remotigue
Trading in Iloilo City and Remotigue Trading in Cotabato City.
Since there was a clear agreement that the capital the partners
contributed went to the three businesses, then there is no reason to
deviate from such agreement and go beyond the stipulations in the
document. There is no evidence that the subject real properties were
assets of the partnership referred to in the Acknowledgement of
Participating Capital. Petition denied.

G.R. No. 144214

July 14, 2003
CARMELITO JOSE, petitioners,
A share in a partnership can be returned only after the completion of
the latter's dissolution, liquidation and winding up of the business.
In 1984, Villareal, Carmelito Jose and Jesus Jose, formed a
partnership for the purpose of operating a restaurant. Each
contributed P250,000.00. In 1984, Ramirez was added as a partner
after he contributed P250,000.00. In 1987, Jesus withdrew from the
partnership and his capital share of P250k was returned to him as
agreed upon by the other partners.
Thereafter, the restaurant suffered losses. Without informing Ramirez,
Villareal and Carmelito shut down the restaurant. They then turned
over the restaurant equipments to Ramirez.
Later, Ramirez sent a letter to Villareal and Carmelito telling them hes
no longer interested in being a partner and that hes demanding his
shares in the partnership. Villareal and Carmelito ignored the request
of Ramirez hence the latter sued them.
In their defense, Villareal and Carmelito said that the restaurant
equipments served as payment to Ramirez when they were delivered
to them; that Ramirez cannot ask for share in equity because the
restaurant incurred debts (P240,658.00) and irreversible business
losses. Ramirez argued by saying that the equipments were merely
placed in their house for storage as the two partners allegedly
searched for a better restaurant location; that he was not aware of
any losses or any indebtedness because he never took part in the
management of the restaurant.
The trial court ruled in favor of Ramirez. The Court of Appeals
affirmed the trial court and it further ordered Villareal and Carmelito to
pay Ramirez P253,114.00. The computation was done as follows:
(Original Partnership Capital Partnership Debt = Partnership Asset)
Number of partners; hence: (P1,000,000.00 P240,658.00 =
P759,342.00) 3 = P253,114.00.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. It is impossible that the said P1,000,000.00 original capital
did not fluctuate. It could not have remained stagnant. Further, the
Court of Appeals missed to note that one partner left and his
contribution was returned (Jesus Jose). Generally, in the pursuit of a
partnership business, its capital is either increased by profits earned
or decreased by losses sustained. It does not remain static and
unaffected by the changing fortunes of the business.

G.R. No. 126881

October 3, 2000
HEIRS OF TAN ENG KEE, petitioners,
represented by its President TAN ENG LAY,respondents.
Benguet Lumber has been around even before World War II but
during the war, its stocks were confiscated by the Japanese. After the
war, the brothers Tan Eng Lay and Tan Eng Kee pooled their
resources in order to revive the business. In 1981, Tan Eng Lay
caused the conversion of Benguet Lumber into a corporation called
Benguet Lumber and Hardware Company, with him and his family as
the incorporators. In 1983, Tan Eng Kee died. Thereafter, the heirs of
Tan Eng Kee demanded for an accounting and the liquidation of the
Tan Eng Lay denied that there was a partnership between him and his
brother. He said that Tan Eng Kee was merely an employee of
Benguet Lumber. He showed evidence consisting of Tan Eng Kees
payroll; his SSS as an employee and Benguet Lumber being the
employee. As a result of the presentation of said evidence, the heirs
of Tan Eng Kee filed a criminal case against Tan Eng Lay for allegedly
fabricating those evidence. Said criminal case was however
dismissed for lack of evidence.
ISSUE: Whether or not Tan Eng Kee is a partner.
HELD: No. There was no certificate of partnership between the
brothers. The heirs were not able to show what was the agreement
between the brothers as to the sharing of profits. All they presented
were circumstantial evidence which in no way proved partnership.
It is obvious that there was no partnership whatsoever. Except for a
firm name, there was no firm account, no firm letterheads submitted
as evidence, no certificate of partnership, no agreement as to profits
and losses, and no time fixed for the duration of the partnership.
There was even no attempt to submit an accounting corresponding to
the period after the war until Kees death in 1984. It had no business
book, no written account nor any memorandum for that matter and no
license mentioning the existence of a partnership.
In fact, Tan Eng Lay was able to show evidence that Benguet Lumber
is a sole proprietorship. He registered the same as such in 1954; that
Kee was just an employee based on the latters payroll and SSS
coverage, and other records indicating Tan Eng Lay as the proprietor.
Also, the business definitely amounted to more P3,000.00 hence if
there was a partnership, it should have been made in a public
But the business was started after the war (1945) prior to the
publication of the New Civil Code in 1950?
Even so, nothing prevented the parties from complying with this
Also, the Supreme Court emphasized that for 40 years, Tan Eng Kee
never asked for an accounting. The essence of a partnership is that
the partners share in the profits and losses. Each has the right to
demand an accounting as long as the partnership exists. Even if it can
be speculated that a scenario wherein if excellent relations exist
among the partners at the start of the business and all the partners
are more interested in seeing the firm grow rather than get immediate
returns, a deferment of sharing in the profits is perfectly plausible.
But in the situation in the case at bar, the deferment, if any, had gone
on too long to be plausible. A person is presumed to take ordinary
care of his concerns. A demand for periodic accounting is evidence of
a partnership which Kee never did.

The Supreme Court also noted that Ramirez cannot demand his
equity shares from Villareal and Carmelito because it should be the
partnership the partners and the partnership has a separate and
distinct personality.
In determining Ramirez share in the equity, losses must be accounted
for. He cannot ask for an amount equivalent to his capital contribution
especially in this case where the partnership incurred debts and
losses. At any rate, Ramirez share is 1/3 of whatever assets the
partnership still has after debts and losses are deducted. Hence there
is a need for a proper proceeding for the accounting, liquidation, and
distribution of the remaining partnership assets. A share in a
partnership can be returned only after the completion of the latters
dissolution, liquidation and winding up of the business.
On the issue of whether or not the turning over of the restaurant
equipments to Ramirez served as payment of the latters 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:
are being stored in his place and not being given to him as payment.

(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
(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
WILMER D. GENOVIA, Respondent.
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.
Lirios 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
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
power to dismiss him, and that they had the power to control him not

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.
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 are present and 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
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
of respondent for his absence from work, which negates petitioner's cl
aim that the wages paid wereadvances for respondents 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 formers favor

G.R. No. 178782

September 21, 2011
PROSENCIO D. JASO and EDEN G. JASO, Respondents.
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 Biondos 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
Frenchmans share in the business and formally demanding an
accounting and inventory thereof as well as the remittance of their
portion of its profits.
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.
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 partners conveyance of the
entirety of his interest in the partnership is concerned, Article 1813 of
the Civil Code provides as follows:
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.
In the case of dissolution of the partnership, the assignee is entitled to
receive his assignors interest and may require an account from the
date only of the last account agreed to by all the partners.

G.R. No. L-35469

March 17, 1932
G.R. No. 127405
September 20, 2001
E. S. LYONS, plaintiff-appellant,
C. W. ROSENSTOCK, Executor of the Estate of Henry W. Elser, COURT OF APPEALS and NENITA A. ANAY, respondent.
deceased, defendant-appellee.
Harvey & O'Brien for appellant.
DeWitt, Perkins & Brandy for appellee.
Henry W. Elser was engaged in buying, selling, and administering real
estate. E. S.Lyons joined with him, the profits being shared by the two
in equal parts.Lyons, whose regular vocation was that of a missionary
or missionary agent, of theMethodist Episcopal Church, went on leave
to the United States and was gone for nearly a year and a half. Elser
made written statements showing that Lyons was, atthat time, half
owner with Elser of three particular pieces of real property.
Concurrentlywith this act Lyons execute in favor of Elser a general
power of attorney empoweringhim to manage and dispose of said
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,
referred to as the San JuanEstate. He obtained the loan of P50,000 to
complete the amount needed for the firstpayment on the San Juan
Estate. The lender insisted that he should procure thesignature of the
Fidelity & Surety Co. on the note to be given for said loan.
Elser mortgaged to the Fidelity & Surety Co. the equity of redemption
in the property ownedby himself and Lyons on Carriedo Street to
secure the liability thus assumed by it.The case for the plaintiff
supposes that, when Elser placed a mortgage for P50,000upon the
equity of redemption in the Carriedo property, Lyons, as half owner of
saidproperty, became, as it were, involuntarily the owner of an
undivided interest in theproperty acquired partly by that money; and it
is insisted for him that, in considerationof this fact, he is entitled to the
four hundred forty-six and two-thirds shares of J. K.Pickering &
Company, with the earnings thereon, as claimed in his complaint.

Private respondent Nenita A. Anay met petitioner William T. Belo, then

the vice-president for operations of Ultra Clean Water Purifier, through
her former employer in Bangkok. Belo introduced Anay to petitioner
Marjorie Tocao, who conveyed her desire to enter into a joint venture
with her for the importation and local distribution of kitchen cookwares
Under the joint venture, Belo acted as capitalist, Tocao as president
and general manager, and Anay as head of the marketing department
and later, vice-president for sales
The parties agreed that Belo's name should not appear in any
documents relating to their transactions with West Bend Company.
Anay having secured the distributorship of cookware products from
the West Bend Company and organized the administrative staff and
the sales force, the cookware business took off successfully. They
operated under the name of Geminesse Enterprise, a sole
proprietorship registered in Marjorie Tocao's name.

The parties agreed further that Anay would be entitled to:

(1) ten percent (10%) of the annual net profits of the business;
(2) overriding commission of six percent (6%) of the overall weekly
(3) thirty percent (30%) of the sales she would make; and
(4) two percent (2%) for her demonstration services. The agreement
was not reduced to writing on the strength of Belo's assurances that
he was sincere, dependable and honest when it came to financial

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.
Under our law, a trust does not necessarilyattach with respect to
property acquired by a personwho uses money belonging to another.
In the case atbar, there was clearly no general relation of partnership
between Lyons and Elser and the mostthat can be said is that they
had been co-participantsin various transactions involving real estate.
It isclear the Elser, in buying the San Juan Estate, wasnot acting for
any partnership composed for himself and Lyons, especially that the
latter expresslycommunicated his desire not to participate in
thisventure. Lastly, it should be noted that no moneybelonging to
Lyons or any partnership composed byLyons and Elser was in fact
used by the latter in thepurchase of the San Juan Estate

Anay attempted to contact Belo. She wrote him twice to demand her
overriding commission for the period of January 8, 1988 to February
5, 1988 and the audit of the company to determine her share in the
net profits.

Anay still received her five percent (5%) overriding commission up to

December 1987. The following year, 1988, she did not receive the
same commission although the company netted a gross sales of P
On April 5, 1988, Nenita A. Anay filed Civil Case No. 88-509, a
complaint for sum of money with damages against Marjorie D. Tocao
and William Belo before the Regional Trial Court of Makati, Branch
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 courts decision.
Whether the parties formed a partnership

G.R. No. L-25532

February 28, 1969
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 petitioner.
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,
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.
Whether or not the partnership was dissolved after the
marriage of the partners, William J. Suter and Julia Spirig Suter and
the subsequent sale to them by the remaining partner, Gustav
William J. Suter "Morcoin" Co., Ltd. was not a
universal partnership, but a particular one since the contributions of
the partners were fixed sums of money, P20,000.00 by William Suter
and P18,000.00 by Julia Spirig and neither one of them was an
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)

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
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
personality separate and distinct from that of each of the partners.
The partners cannot be held liable for the obligations of the
partnership unless it is shown that the legal fiction of a different
juridical personality is being used for fraudulent, unfair, or illegal
purposes. In this case, Felicidad has not shown that A.C. Aguila &
Sons, Co., as a separate juridical entity, is being used for fraudulent,
unfair, or illegal purposes. Moreover, the title to the subject property is
in the name of A.C. Aguila & Sons, Co. It is the partnership, not its
officers or agents, which should be impleaded in any litigation
involving property registered in its name. A violation of this rule will
result in the dismissal of the complaint.

Partnership #11: Kilosbayan, Inc. vs.

Guingona, Jr., 232 SCRA 110

Eddie demanded payment but Irma did not pay. A formal

demand was sent by Eddies 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.

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
Partnership #16: Idos vs. CA, 296 SCRA 198

Irma Idos vs. Court of Appeals and People of the

G.R. No. 110782 September 25, 1998

Whether or not Irma is guilty for the violation of BP


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 Eddies
share in the partnership property.
Hence, the petition was granted and the Court acquitted Irma

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

Partnership #20
Evangelista vs. CIR, 102 Phil 140

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.

Whether or not a partnership was formed


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
Partnership #17
common fund; and (b) intent to divide the profits among the
contracting parties. The first element is present in the case,
Philex Mining vs. CIR, 551 SCRA 428
for, the sisters have agreed to, and did, contribute money and
property to a common fund. The second element is also
Partnership #18: Yu vs. NLRC, 224 SCRA 75 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
Partnership #19: Hong Kong and Shanghai
same among themselves. The collective effect of the
circumstances is such as to leave no room for doubt on the
Ban vs. Jurado, 2 Phil 671
existence of said intent in the sisters herein.
G.R. No. L-414November 9, 1903
Jurado & Co. is a commercial partnership. A case for
bankruptcy was filed against the partnership. One of the
general partners who were expressly included in the
proceeding was Don Ricardo Regidor. He argues that he was
not properly included in the bankruptcy. Thus, he filed a
motion to make himself a codefendant. As one of such
partners, Don Regidor, in open court, appointed an attorney to
argue for the firm the motion then before this court.
ISSUE: Whether Don Regidor can appear in the proceedings
as an individual separate party from the firm.

Irma is a businesswoman who is engaged I leather tanning.
Eddie Aracilla is her supplier of chemicals and rawhide as well
as her business partner. The two of them entered into a
partnership called Tagumpay Manufacturing but such was
short-lived and they decided to dissolve the partnership. Upon
liquidation, they had receivables and stocks amounting to 1.8
million. Eddie had a share of 900,000 over the said stocks and
receivables. Irma issued 4 checks to cover such share of HELD:
Eddie. The 1st, 2nd, and 4th checks were encashed but the 3rd No. As a partner of Jurado & Co. he is represented by the firm
check was dishonored because of insufficiency of funds. and has no right to appear as an individual separate from the

Agency #1: Philpotts vs. Phil.

Manufacturing Co., 40 Phil 471

Agency #2: Rallos vs. Felix Go Chan & Sons

Realty Corp., 81 SCRA 251

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
After Concepcion died, Simeon Rallos sold the
undivided shares of his sisters Concepcion and Gerundia to
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 attorneys fees and
payment of costs of suit.
Whether or not the sale fell within the exception to the general
rule that death extinguishes the authority of the agent
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 attorneys 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 attorneys fees [Borromeo filed a third party
complaint against Josefina Rallos, special administratrix of the
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.
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
properties could be offered for sale toprospective 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.,a n 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 Litonjuas 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
theLitonjua siblings offer and relayed thesameto 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 the 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 tofinal liquidation.
non to bind Eternit. Requisites of an agency by estoppels: 1.
The principal manifested a representation of the agents
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
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
advising 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 onwhich Eternit Corp. is situated.
When apprised of this development, the Litonjuas, through G.R. No. 149353 June 26, 2006
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
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 ofthe 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
business of lending money in exchange for personal checks
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
agent, by legal fiction, becomes the principal, authorized to of the alleged debtors.

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

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

October 1996, petitioner's counsel sent respondents a final
demand letter wherein it was stated that as of 11 June 1996,
respondents' total obligations stood at P295,000.00 excluding
interests and attorney's fees. Because of respondents' failure
to abide by said final demand letter, petitioner instituted a
complaint for sum of money, damages, with application for
preliminary attachment against herein respondents
By way of special and affirmative defenses, respondent
EDWIN alleged that he is not a real party in interest in this
case. According to him, he was acting as mere agent of his
principal, which was the Impact Systems, in his transaction
with petitioner and the latter was very much aware of this fact.

to reimbursement of the amounts he already paid. The

contract was for P95,000.00. Baluyot reassured Atty.
Linsangan that once reimbursement is made to the
former buyer, the contract would be transferred to him.
Atty. Linsangan agreed and gave Baluyot P35,295.00
representing the amount to be reimbursed to the
original buyer and to complete the down payment to
MMPCI. Baluyot issued handwritten and typewritten
receipts for these payments. Contract No. 28660 has a
listed price of P132,250.00. Atty. Linsangan objected to
the new contract price, as the same was not the amount
previously agreed upon. To convince Atty. Linsangan,
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.

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
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
binds Impact Systems
against the former.

The Supreme Court held that in a contract of agency, a

person binds himself to render some service or to do
something in representation or on behalf of another with the
latter's consent. Its purpose is to extend the personality of the
principal or the party for whom another acts and from whom
he or she derives the authority to act. It is said that the basis
of agency is representation, that is, the agent acts for and on
behalf of the principal on matters within the scope of his
authority and said acts have the same legal effect as if they
were personally executed by the principal.

MMPCI alleged that Contract No. 28660 was cancelled

conformably with the terms of the contract because of
non-payment of arrearages. MMPCI stated that Baluyot
was not an agent but an independent contractor, and as
such was not authorized to represent MMPCI or to use
its name except as to the extent expressly stated in the
Agency Manager Agreement. Moreover, MMPCI was
not aware of the arrangements entered into by Atty.
Linsangan and Baluyot, as it in fact received a down
payment and monthly installments as indicated in the

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
principal and EDWIN as agent.
severally liable. The Court of Appeals affirmed the

Agency #7:
Manila Memorial Park Cemetery, Inc. vs.
Linsangan, 443 SCRA 377
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
acquiring the lot and had opted to sell his rights subject

decision of the trial court.


1. Whether or not there was a contract of agency

between Baluyot and MMPCI?
2. Whether or not MMPCI should be liable for Baluyots
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.
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.

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

Whether or not there was a contract of agency Antonio Sunyantong was at the time an employee of the
between Lines and Spaces and Tri- Realty
plaintiffs and that they reposed confidence in him and

did not mind disclosing their plans to him, concerning

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
appoint or an intention naturally inferable from his words or
actions and on the part of the agent, there must be an
intention to accept the appointment and act on it and in the
absence of such intent, there is generally no agency. One
factor which most clearly distinguishes agency from other
legal concepts is control; one person- the agent- agrees to act
under the control or direction of the principal. In the case, the
intention of Tri-realty was merely for Lines and Spaces,
through Sanchez, to supply them with needed bags of
cement. Inasmuch as Amon Trading and Juliana Marketing
To repeat, the acts of the agent beyond the scope of his have never directly dealt with Tri-realty, the former had no
authority do not bind the principal unless the latter reason to doubt the request of Sanchez later on to refund the
ratifies the same. It also bears emphasis that when the value of the bags of cement to Lines and Spaces.

third person knows that the agent was acting beyond

his power or authority, the principal cannot be held Agency #10: Naguiat vs. CA, 412 SCRA 592
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
Agency #12: Pineda vs. CA, 226 SCRA 754
Agency #8: Orient Air Services vs. CA, 197
SCRA 645

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.

Agency #13: BPI vs. de Carter, 47 Phil 594

refer to Agency #3

On a conference where Sing Juco, Sing Bengco and

Antonio Sunyantong was present, the latter suggested
that it would be better if they would wait for a few days
elapse before accepting the terms of the transfer
proposed by Maria Gay as not to give the impression
that they are coveting the property.
In the morning of June 17, 1919, on the midday of
which the term of plaintiff's option to purchase was to
expire, said defendant Antonio Sunyantong called at the
house of Mari Gay when she was having breakfast, and
offered to buy the estate on the same terms proposed
by her not yet accepted by the plaintiffs, making the
offer to buy not for the benefit of the plaintiff's, but for
own wife, his codefendant Vicenta Llorente de
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
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
Agency #9
Amon Trading Corp. vs. CA, 477 SCRA 552

Juliana. Tri-realty, through Sanchez of Lines and Spaces, paid

in advance through managers checks by which Sanchez
issued receipts. There were deliveries at first but a balance of
5200 bags was not delivered. Tri-realty sent written demands

person but for his principal, and held in trust for the

Issue: Does the plaintiff-petitioners have a remedy to

acquire the property?

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.

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. Agency #17:
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
things acquired by an employee is deemed not to have Manila Remnants vs. CA, 191 SCRA 622
been acquired for his own benefit or that of any other
person but for his principal, and held in trust for the
latter. (There is no assignment of errors in this case.)
Agency #15:
Toyota Shaw, Inc. vs. CA, 249 SCRA 320
Agency #16
Bacaltos Coal Mines vs CA, 245 SCRA 460
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.
Is Savellon duly authorized to enter into a Trip Charter Party
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
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.

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
[G.R. No. 82978. November 22, 1990.]
of all his clients but said list excluded the name of the

Ventanillas. Manila Remnant caused the publication in

THE MANILA REMNANT CO., INC., Petitioner, v. THE theTimes Journalof a notice cancelling the contracts to sell of
H O N O R A B L E C O U RT O F A P P E A L S a n d O S C A R some lot buyers. To prevent the effective cancellation of their
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
performance with damages against Manila Remnant

The Ventanillas, believing that they had already remitted
Petitioner Manila Remnant Co., Inc. is the owner of enough money went directly to Manila Remnant and offered to
parcels of land situated in Quezon City and constituting the pay the entire outstanding balance of the purchase price.
Capital Homes Subdivision Nos. I and II. Manila Remnant and Unfortunately, they discovered from Gloria Caballes that their
A.U. Valencia & Co. Inc. entered into a contract entitled names did not appear in the records of A.U. Valencia and Co.
"Confirmation of Land Development and Sales Contract" to as lot buyers. Also, Manila Remnant refused the offer of the
formalize a prior verbal agreement whereby A.U. Valencia Ventanillas to pay for the remainder of the contract price. The
and Co., Inc. was to develop the aforesaid subdivision for a Ventanillas then commenced an action for specific
consideration of 15.5% commission. At that time the President performance, annulment of deeds and damages against
of both A.U. Valencia and Co. Inc. and Manila Remnant Co., Manila Remnant, A.U. Valencia and Co. and Carlos
Inc. was Artemio U. Valencia. Manila Remnant thru A.U. Crisostomo.
Valencia and Co. executed two "contracts to sell" covering
Lots 1 and 2 of Block 17 in favor of Oscar C. Ventanilla and The trial court found that Manila Remnant could have not
Carmen Gloria Diaz. Ten days after the signing of the been dragged into this suit without the fraudulent
contracts with the Ventanillas, Artemio U. Valencia, without the manipulations of Valencia. Subsequently, Manila Remnant
knowledge of the Ventanilla couple, sold Lots 1 and 2 of Block and A.U. Valencia and Co. elevated the lower court's decision
17 again, to Carlos Crisostomo, one of his sales agents to the Court of Appeals through separate appeals. On October
without any consideration. Artemio Valencia then transmitted 13, 1987, the Appellate Court affirmed in toto the decision of
the fictitious Crisostomo contracts to Manila Remnant while he the lower court. Reconsideration sought by petitioner Manila
kept in his files the contracts to sell in favor of the Ventanillas. Remnant was denied, hence the instant petition.
All the amounts paid by the Ventanillas were deposited in ISSUE:
Valencia's bank account. Upon orders of Artemio Valencia, the Whether or not petitioner Manila Remnant should be
monthly payments of the Ventanillas were remitted to Manila held solidarily liable together with A.U. Valencia and Co. and
Remnant as payments of Crisostomo for which the former Carlos Crisostomo for the payment of moral, exemplary
issued receipts in favor of Crisostomo.
damages and attorney's fees in favor of the Ventanillas

General Manager Karl Landahl, wrote Artemio Valencia

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.

Article 1911 of the Civil Code provides:"Even when

the agent has exceeded his authority, the principal
issolidarilyliable with the agentif 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
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
employed by its agent. That the principal might not have had
actual knowledge of the agent's misdeed is of no moment.

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.
Whether the agreement made by the parties created a
contract of trust.
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 the fishpond.

Trust #2
Government vs. Abadilla, 26 Phil 642

Trust #3: Mindanao Devt Authority vs. CA,

113 SCRA 429

Agency #20: Terrado vs. CA, 131 SCRA 371

Trust #4: Canezo vs. Rojas, 538 SCRA 242

Trust #1: Deluao vs. Casteel, 22 SCRA 231

Trust #5: Penalber vs. Ramos, 577 SCRA 50


22 scra 231

Trust #6: Ramos vs. Ramos, 61 SCRA 284

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 the area covered by


G.R. No. L-19872 December 3, 1974
Ponente: Aquino,J.

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
Whether there is express trust in the case.
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

Trust #7: Morales vs. CA, 247 SCRA 282


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
Celsos 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.
Is there implied trust between Celso and his father?

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
In addition Article 1448 of the New Civil Code expressly
provides that if the person to whom the title is conveyed is
achild, 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
G.R. No. L-59974. March 9, 1987.
spouses Urbano Panganiban and Roberta Espino owned, as
conjugal property, during their lifetime 29 parcels of
unregistered Roberta Espino died intestate and without debts.
She left her husband, Urbano Panganiban, and their two
legitimate children, Mercedes and Gaudencia as her only
forced heirs. Urbano Panganiban also died also intestate and
without debts, leaving as his only compulsory heirs the
children of Gaudencia (who together with her sister Mercedes,
had predeceased their father) who are now petitioners herein
and his legitimate children with his second wife, Atanacia
Agustin, who are the private respondents herein.
After Urbanos death, petitioners instituted an action with the
then CFI of Bulacan for partition and delivery of possession of
their corresponding shares in the conjugal estate of
decedents-spouses Urbano and Roberta consisting of subject
29 parcels of unregistered land. Petitioners filed the case
because since the death of Urbano, their grandfather, in 1952,
private respondents (his children by the second marriage) had
taken possession of the whole conjugal property and
appropriated to themselves to the exclusion of petitioners the
products coming from the 29 parcels of land.

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

G.R. No. L-33360 April 25, 1977

MAXIMINO CARANTES (Substituted by Engracia Mabanta
Facts:Mateo Carantes, original owner of Lot No. 44 situated
at Loakan, Baguio City, died in 1913 leaving his widow
Ogasia, and six children, namely, Bilad, Lauro, Crispino,
Maximino, Apung and Sianang,. In 1930, the government, in
order to expand the landing field of the Loakan Airport, filed
for the expropriation of a portion of Lot. No. 44. Said lot was
subdivided into Lots. No. 44A to 44Efor the purpose.
In 1913, Maximino Carrantes (MAX) was appointed the
judicial administrator of the estate of Mateo. Four heirs,
namely, Bilad, Lauro, Sianang, and Crisipino, executed a
deed denominated Assignment of Right to Inheritance
assigning to Max their rights over said lot in 1939. The stated
monetary consideration is P1.00.On same date, Max sold Lot
Nos. 44B and 44C to the government. One year later the
Court of First Instance, upon joint petition of the Carrantes
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,
respectively. On 4 Sept. 1958, Bilad, Lauro, and Crispino,

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 courts 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 courts 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
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.
1. Whether or not the heirs own the machines.
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 Pios 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 Pios 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