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PARTNERSHIP Partnership and joint venture are similar, except that partnerships are generally
continuing in nature, while joint ventures are temporary. ........................ 7
ART. 1767, NCC. By the contract of partnership, two
or more persons bind themselves to contribute
money, property, or industry to a common fund, with
the intention of dividing the profits among themselves. Notes:
Contents
SY VS CA (2003) ............................................................ 3
A 23-year old working as truck helper could not be considered an industrial partner,
but rather an employee. ............................................................ 3
Their contribution may be in the form of credit or industry, not necessarily cash or
fixed assets. ........................................................................ 5
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Bgn Digests
Civil Law Partnership
ART. 1767 (Definition of Partnership)
b. Existence of a separate juridical personality The fact that those who agree to form a co-ownership
or do not share any profits made by the use of the
c. Freedom to transfer or assign any interest in the property by
property held in common does not convert their
one with the consent of others. venture into a partnership. The presence of other
elements constituting partnership is necessary.
FACTS: Other elements constituting partnership:
1. JARANTILLA-HEIRS extrajudicially partitioned the a. Clear intent to form partnership
real property of their deceased parents; thereby b. Existence of a separate juridical personality
making them co-owners thereof. c. Freedom to transfer or assign any interest in the
2. Later, CONCHITA (one of the heirs), with her property by one with the consent of others
husband BUENAVENTURA, executed an
Acknowledgment of Participating Capital stating that
ANTOINETA & Petitioner FEDERICO JR. had 8% 2. Does partnership exists? (YES)
and 6% shares, respectively, in the capital of 3 Essential elements of partnership:
specific businesses.
a. Agreement to contribute money, property, or industry
3. 1987, ANTOINTETA filed complaint for the
to a common fund
accounting of the assets and income of the co-
b. Intent to divide the profits among the contracting
ownership, for its partition, and the delivery of the
parties
share.
4. Petitioner FEDERICO JR. entered into a
Compromise Agreement with Antoineta and These elements are attendant:
supported her claims. a. The parties admittedly have agreed to, and did,
5. RTC ruled in favor of ANTOINETA (and similarly with contribute money and property to a common
FEDERICO JR.); that she is entitled to her share in fund.
the 3 businesses specified, as well as with the real b. All the parties have agreed to contribute capital to
properties subsequently acquired in relation to the a common fund to be able to later on share its
businesses. profits, AEB: Acknowledgment of Participating
6. CA, however, modified to limit the share only to the 3 Capital.
businesses specified in the acknowledgment, thereby
excluding the properties claimed. 3. What is the extent of Federico Jr.s share?
7. Hence, the petition.
FEDERICO JR. asserts that from the partnership He is only entitled to 6% share in the 3 businesses as
established under the Acknowledgment, several specified in the APC; and excluding the other
other corporation and businesses were business and the rest of the assets/real properties.
established and several real properties were
ART. 1797. The losses and profits shall be distributed in conformity with the
acquired.
agreement. XXX
Thus, FEDERICO JR. asks for his 6% share also
In the absence of stipulation, the share of each partner in the profits and
in the real properties.
losses shall be in proportion to what he may have contributed, but the industrial
partner shall not be liable for the losses.
ISSUE: WON Federico Jr. has right over the real
properties by virtue of the partnership under the
WHEREFORE, the petition is hereby DENIED and the Decision of the CA is AFFIRMED.
Acknowledgment, which allegedly funded the acquisition
of the real properties. (NO)
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Bgn Digests
Civil Law Partnership
ART. 1767 (Definition of Partnership)
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Bgn Digests
Civil Law Partnership
ART. 1767 (Definition of Partnership)
ISSUES:
1. WON Partnership exists. (YES)
2. WON the partnership agreement is valid. (YES)
3. WON there is lack of consideration, thereby
nullifying the agreement. (NO)
HELD:
1. PARTNERSHIP EXISTS.
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Bgn Digests
Civil Law Partnership
ART. 1767 (Definition of Partnership)
LIM TONG LIM VS PHIL FISHING GEAR INDUSTRIES (1999) There was indeed partnership to engage in the fishing
A partnership may be deemed to exist among parties who agree to business. They purchased the boats, which constituted
the main assets of the partnership, and they agreed that
borrow money to pursue a business and to divide the profits or losses
the proceeds from the sales and operation thereof would
that may arise therefrom, even if it is shown that they have not be divided among them.
contributed any capital of their own to a common fund.
OTHER DEFENSES RAISED BY PETITIONER:
Their contribution may be in the form of credit or industry, not
A. The Compromise Agreement is not the sole basis of ownership.
necessarily cash or fixed assets.
(LACKS MERIT)
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Bgn Digests
Civil Law Partnership
ART. 1767 (Definition of Partnership)
AFISCO INSURANCE ET.AL. VS CA (1999) a. The pool has a common fund, consisting of
money and other valuables that are deposited in
An insurance pool is deemed a partnership, which is taxable as
the name and credit of the pool. This common
corporations. fund pays for the administration and operation
expenses of the pool.
Requisites of partnership:
b. The pool functions through an executive board,
a. Mutual contribution to a common stock which resembles the board of directors of a
corporation, composed of one representative for
b. Joint interest in the profits
each of the ceding companies.
c. True, the pool itself is not a reinsurer and does
FACTS: not issue any insurance policy; however, its work
1. Petitioners are 41 non-life insurance corporations is indispensable, beneficial, and economically
who entered into Reinsurance Treaties with Munich, useful to the business of the ceding companies
a non-resident foreign insurance corporation. Said and Munich, because without it they would not
treaties required petitioners to form a pool. have received their premiums.
2. Once formed, the pool of machinery insurers
submitted a financial statement and filed an Profit motive or business is therefore the
information Return of Organization Exempt from primordial reason (cause) for the pools
Income Tax. formation.
3. CIR, however, assessed deficiency corporate taxes.
4. Petitioners protested, but was denied. Also, the CA did not err in applying Evangelista
5. When it reached the CA, it affirmed the CIR; that the case, which involved a partnership that engaged
pool of machinery insurers was a partnership taxable in a series of transactions spanning more than 10
as corporations. years, as in the instant case.
6. Hence, the petition.
Being a partnership, it is taxable as corporation
PETITIONERS DEFENSE: Denies partnership because: under the NIRC.
a. They, the reinsurers, did not share the same risk
WHEREFORE, the petition is DENIED. The Resolutions of the CA are hereby
or solidary liability
AFFIRMED. Costs against petitioner.
b. There was no common fund
c. The executive board of the pool did not exercise
control and management of its funds
d. The pool or clearing house was not and could not
possibly have engaged in the business of
reinsurance from which it could have derived
income for itself.
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Bgn Digests
Civil Law Partnership
ART. 1767 (Definition of Partnership)