LITONJUA vs LITONJUA GR 166299-300

FACTS: Aurelio and Eduardo are brothers. In 1973, Aurelio alleged that Eduardo entered into a contract
of partnership with him. Aurelio showed as evidence a letter sent to him by Eduardo that the latter is
allowing Aurelio to manage their family business (if Eduardos away) and in exchange thereof he will be
giving Aurelio P1 million or 10% equity, whichever is higher. A memorandum was subsequently made for
the said partnership agreement. The memorandum this time stated that in exchange of Aurelio, who just
got married, retaining his share in the family business (movie theatres, shipping and land development)
and some other immovable properties, he will be given P1 Million or 10% equity in all these businesses
and those to be subsequently acquired by them whichever is greater.
In 1992 however, the relationship between the brothers went sour. And so Aurelio demanded an
accounting and the liquidation of his share in the partnership. Eduardo did not heed and so Aurelio sued
Eduardo.
ISSUE: Whether or not there exists a partnership.
HELD: No. The partnership is void and legally nonexistent. The documentary evidence presented by
Aurelio, i.e. the letter from Eduardo and the Memorandum, did not prove partnership.
The 1973 letter from Eduardo on its face, contains typewritten entries, personal in tone, but is unsigned
and undated. As an unsigned document, there can be no quibbling that said letter does not meet the
public instrumentation requirements exacted under Article 1771 (how partnership is constituted) of the
Civil Code. Moreover, being unsigned and doubtless referring to a partnership involving more than
P3,000.00 in money or property, said letter cannot be presented for notarization, let alone registered with
the Securities and Exchange Commission (SEC), as called for under the Article 1772 (capitalization of a
partnership) of the Code. And inasmuch as the inventory requirement under the succeeding Article 1773
goes into the matter of validity when immovable property is contributed to the partnership, the next logical
point of inquiry turns on the nature of Aurelios contribution, if any, to the supposed partnership.
The Memorandum is also not a proof of the partnership for the same is not a public instrument and again,
no inventory was made of the immovable property and no inventory was attached to the Memorandum.
Article 1773 of the Civil Code requires that if immovable property is contributed to the partnership an
inventory shall be had and attached to the contract.

EUFEMIA EVANGELISTA, MANUELA EVANGELISTA, and FRANCISCA EVANGELISTA , petitioners,

vs.THE COLLECTOR OF INTERNAL REVENUE and THE COURT OF TAX APPEALS,
respondents.G.R. No. L-9996, October 15, 1957

Facts:Petitioners borrowed sum of money from their father and together with their own personal funds
they used said money to buy several real properties. They then appointed their brother (Simeon) as
manager of the said real properties with powers and authority to sell, lease or rent out said properties to
third persons. They realized rental income from the said properties for the period 1945-1949.

On September 24, 1954 respondent Collector of Internal Revenue demanded the payment of income tax
on corporations, real estate dealer's fixed tax and corporation residence tax for the years 1945-1949. The
letter of demand and corresponding assessments were delivered to petitioners on December 3, 1954,
whereupon they instituted the present case in the Court of Tax Appeals, with a prayer that "the decision of
the respondent contained in his letter of demand dated September 24, 1954" be reversed, and that they
be absolved from the payment of the taxes in question. CTA denied their petition and subsequent MR and
New Trials were denied. Hence this petition.

Issue: Whether or not petitioners have formed a partnership and consequently, are subject to the tax on
corporations provided for in section 24 of Commonwealth Act. No. 466, otherwise known as the National
Internal Revenue Code, as well as to the residence tax for corporations and the real estate dealers fixed
tax.

Held: YES. The essential elements of a partnership are two, namely: (a) an agreement to contribute
money, property or industry to a common fund; and (b) intent to divide the profits among the
contracting parties. The first element is undoubtedly present in the case at bar, for, admittedly,
petitioners have agreed to, and did, contribute money and property to a common fund. Upon
consideration of all the facts and circumstances surrounding the case, we are fully satisfied that their
purpose was to engage in real estate transactions for monetary gain and then divide the same among
themselves, because of the following observations, among others: (1) Said common fund was not
something they found already in existence;(2) They invested the same, not merely in one transaction, but
in a series of transactions;(3) The aforesaid lots were not devoted to residential purposes, or to other
personal uses, of petitioners herein.

Although, taken singly, they might not suffice to establish the intent necessary to constitute a partnership,
the collective effect of these circumstances is such as to leave no room for doubt on the existence of said
intent in petitioners herein.

For purposes of the tax on corporations, our National Internal Revenue Code, includes these partnerships
with the exception only of duly registered general copartnerships within the purview of the term
"corporation." It is, therefore, clear to our mind that petitioners herein constitute a partnership, insofar as
said Code is concerned and are subject to the income tax for corporations.

LIM TONG LIM vs PHILIPPINE FISHING GEAR

Business Organization Partnership, Agency, Trust Corporation by Estoppel
It was established that Lim Tong Lim requested Peter Yao to engage in commercial fishing with him and
one Antonio Chua. The three agreed to purchase two fishing boats but since they do not have the money
they borrowed from one Jesus Lim (brother of Lim Tong Lim). They again borrowed money and they
agreed to purchase fishing nets and other fishing equipments. Now, Yao and Chua represented
themselves as acting in behalf of Ocean Quest Fishing Corporation (OQFC) they contracted with
Philippine Fishing Gear Industries (PFGI) for the purchase of fishing nets amounting to more than P500k.
They were however unable to pay PFGI and so they were sued in their own names because apparently
OQFC is a non-existent corporation. Chua admitted liability and asked for some time to pay. Yao waived
his rights. Lim Tong Lim however argued that hes not liable because he was not aware that Chua and
Yao represented themselves as a corporation; that the two acted without his knowledge and consent.
ISSUE: Whether or not Lim Tong Lim is liable.
HELD: Yes. From the factual findings of both lower courts, it is clear that Chua, Yao and Lim had decided
to engage in a fishing business, which they started by buying boats worth P3.35 million, financed by a
loan secured from Jesus Lim. In their Compromise Agreement, they subsequently revealed their intention
to pay the loan with the proceeds of the sale of the boats, and to divide equally among them the excess or
loss. These boats, the purchase and the repair of which were financed with borrowed money, fell under
the term common fund under Article 1767. The contribution to such fund need not be cash or fixed
assets; it could be an intangible like credit or industry. That the parties agreed that any loss or profit from
the sale and operation of the boats would be divided equally among them also shows that they had
indeed formed a partnership.
Lim Tong Lim cannot argue that the principle of corporation by estoppels can only be imputed to Yao and
Chua. Unquestionably, Lim Tong Lim benefited from the use of the nets found in his boats, the boat which
has earlier been proven to be an asset of the partnership. Lim, Chua and Yao decided to form a
corporation. Although it was never legally formed for unknown reasons, this fact alone does not preclude
the liabilities of the three as contracting parties in representation of it. Clearly, under the law on estoppel,
those acting on behalf of a corporation and those benefited by it, knowing it to be without valid
existence, are held liable as general partners.

GATCHALIAN v. COMMISSIONER OF INTERNAL REVENUE

G.R. No. 45425; April 29, 1939
Ponente: J. Imperial

FACTS:
On December 15, 1934, the plaintiffs, all 15 of them, each contributed in order to buy a
sweepstakes ticket worth Php 2.00. That immediately thereafter but prior to December 16, 1934, plaintiffs
purchased, in the ordinary course of business, from one of the duly authorized agents of the National
Charity Sweepstakes Office one ticket bearing No. 178637 for the sum of two pesos (P2) and that the
said ticket was registered in the name of Jose Gatchalian and Company. The above-mentioned ticket
bearing No. 178637 won one of the third prizes in the amount of P50,000 and that the corresponding
check covering the above-mentioned prize of P50,000 was drawn by the National Charity Sweepstakes
Office in favor of Jose Gatchalian & Company against the Philippine National Bank, which check was
cashed during the latter part of December, 1934 by Jose Gatchalian & Company. Thereafter, Jose
Gatchalian was required by income tax examiner Alfredo David to file the corresponding income tax return
covering the prize won by Jose Gatchalian & Company and that on December 29, 1934. The defendant
made an assessment against Jose Gatchalian & Company requesting the payment of the sum of
P1,499.94 to the deputy provincial treasurer of Pulilan, Bulacan. Tthe plaintiffs requested exemption from
the payment of the income tax but it was rejected. The plaintiffs paid in protest the tax assessment given
to them.

ISSUE: Whether the plaintiffs formed a partnership, thus not exempted from paying income tax

HELD: Yes, the plaintiffs formed a partnership. The Supreme Court held that according to the stipulated
facts the plaintiffs organized a partnership of a civil nature because each of them put up money to buy a
sweepstakes ticket for the sole purpose of dividing equally the prize which they may win, as they did in
fact in the amount of P50,000. The partnership was not only formed, but upon the organization thereof
and the winning of the prize, Jose Gatchalian personally appeared in the office of the Philippine Charity
Sweepstakes, in his capacity as co-partner, as such collected the prize, the office issued the check for
P50,000 in favor of Jose Gatchalian and company, and the said partner. in the same capacity, collected
the said check. Having organized and constituted a partnership of a civil nature, the said entity is the one
bound to pay the income tax which the defendant collected under the aforesaid section 10 ( a) of Act No.
2833, as amended by section 2 of Act No. 3761.

G.R. No. 31057 September 7, 1929 ADRIANO ARBES, ET AL., plaintiffs-appellees, vs. VICENTE
POLISTICO, ET AL., defendants-appellants.

FACTS: This is an action to bring about liquidation of the funds and property of the association called
"Turnuhan Polistico & Co." The plaintiffs were members or shareholders, and the defendants were
designated as president-treasurer, directors and secretary of said association. By agreement of the
parties, the court appointed a commissioner to examine all the books, documents, and accounts of
"Turnuhan Polistico & Co. The commissioner rendered his report, showing a balance of the cash on hand
in the amount of P24,607.80. The trial court in accepting the report, rendered judgment, holding that the
association "Turnuhan Polistico & Co." is unlawful, and sentencing the defendants jointly and severally to
return the amount of P24,607.80, as well as the documents showing the uncollected credits of the
association, to the plaintiffs in this case, and to the rest of the members of the said association
represented by said plaintiffs. There is no question that "Turnuhan Polistico & Co." is an unlawful
partnership, but the appellants allege that because it is so, some charitable institution to whom the
partnership funds may be ordered to be turned over, should be included, as a party defendant. The
appellants refer to article 1666 of the Civil Code, particularly the second paragraph, which provides:
When the dissolution of an unlawful partnership is decreed, the profits shall be given to charitable
institutions of the domicile of the partnership, or, in default of such, to those of the province.

ISSUE: WHETHER OR NOT A CHARITABLE INSTITUTION IS A NECESSARY PARTY IN THIS CASE.

RULING: NO, no charitable institution is a necessary party in the present case of determination of the
rights of the parties. The action which may arise from said article, in the case of unlawful partnership, is
that for the recovery of the amounts paid by the member from those in charge of the administration of said
partnership, and it is not necessary for the said parties to base their action to the existence of the
partnership, but on the fact that of having contributed some money to the partnership capital. Hence, the
charitable institution of the domicile of the partnership, and in the default thereof, those of the province are
not necessary parties in this case. In so ruling, the court had the occasion of explaining the scope and
spirit of the provision of Article 1666 of the Civil Code (now Article 1770 of the New Civil Code).

With regard to Contributions of an Illegal Partnership: the court holds that (1) The partner who limits
himself to demanding only the amount contributed by him need not resort to the partnership contract on
which to base his action since said contract does not exist in the eyes of the law, the purpose from which
the contribution was made has not come into existence, and the administrator of the partnership holding
said contribution retains what belongs to others, without any consideration; for which reason he is not
bound to return it and he who has paid in his share is entitled to recover it. (2) Our Code does not state
whether, upon the dissolution of the unlawful partnership, the amounts contributed are to be returned by
the partners, because it only deals with the disposition of the profits; but the fact that said contributions
are not included in the disposal prescribed profits, shows that in consequences of said exclusion, the
general law must be followed, and hence the partners should reimburse the amount of their respective
contributions. (3) Any other solution is immoral, and the law will not consent to the latter remaining in the
possession of the manager or administrator who has refused to return them, by denying to the partners
the action to demand them. With regard to Profits of an Illegal Partnership: the court holds that (1) The
article cited above permits no action for the purpose of obtaining the earnings made by the unlawful
partnership, during its existence as result of the business in which it was engaged, because for the
purpose, the partner will have to base his action upon the partnership contract, which is to annul and
without legal existence by reason of its unlawful object; and it is self evident that what does not exist
cannot be a cause of action. (2) Profits earned in the course of the partnership, because they do not
constitute or represent the partner's contribution but are the result of the industry, business or speculation
which is the object of the partnership, and therefor, in order to demand the proportional part of the said
profits, the partner would have to base his action on the contract which is null and void, since this partition
or distribution of the profits is one of the juridical effects thereof. (3) Furthermore, it would be immoral and
unjust for the law to permit a profit from an industry prohibited by it.
ALFREDO AGUILA JR vs COURT OF APPEALS et al GR 127347
FACTS: 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.
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.

OA V. COMMISSIONER OF INTERNAL REVENUE

G.R. No. L-19342; May 25, 1972
Ponente: J. BARREDO

FACTS: Julia Buales died on March 23, 1944, leaving as heirs her surviving spouse, Lorenzo T. Oa
and her five children. Because three of the heirs, namely Luz, Virginia and Lorenzo, Jr., all surnamed
Oa, were still minors when the project of partition was approved, Lorenzo T. Oa, their father and
administrator of the estate, filed a petition in Civil Case No. 9637 of the Court of First Instance of Manila
for appointment as guardian of said minors. On November 14, 1949, the Court appointed him guardian of
the persons and property of the aforenamed minors. The project of partition shows that the heirs have
undivided one-half (1/2) interest in ten parcels of land with a total assessed value of P87,860.00, six
houses with a total assessed value of P17,590.00 and an undetermined amount to be collected from the
War Damage Commission. Although the project of partition was approved by the Court on May 16, 1949,
no attempt was made to divide the properties therein listed. Instead, the properties remained under the
management of Lorenzo T. Oa who used said properties in business by leasing or selling them and
investing the income derived therefrom and the proceeds from the sales thereof in real properties and
securities. As a result, petitioners' properties and investments gradually increased from P105,450.00 in
1949 to P480,005.20 in 1956. From said investments and properties petitioners derived such incomes as
profits from installment sales of subdivided lots, profits from sales of stocks, dividends, rentals and
interests The said incomes are recorded in the books of account kept by Lorenzo T. Oa, where the
corresponding shares of the petitioners in the net income for the year are also known. On the basis of the
foregoing facts, respondent (Commissioner of Internal Revenue) decided that petitioners formed an
unregistered partnership and therefore, subject to the corporate income tax.

ISSUE: Whether the petitioners formed an unregistered partnership

HELD: Yes, the petitioners formed an unregistered partnership. The Supreme Court held that that instead
of actually distributing the estate of the deceased among themselves pursuant to the project of partition
approved in 1949, "the properties remained under the management of Lorenzo T. Oa who used said
properties in business by leasing or selling them and investing the income derived therefrom and the
proceeds from the sales thereof in real properties and securities. It is thus incontrovertible that petitioners
did not, contrary to their contention, merely limit themselves to holding the properties inherited by them.
Indeed, it is admitted that during the material years herein involved, some of the said properties were sold
at considerable profit, and that with said profit, petitioners engaged, thru Lorenzo T. Oa, in the purchase
and sale of corporate securities. It is likewise admitted that all the profits from these ventures were divided
among petitioners proportionately in accordance with their respective shares in the inheritance.
As already indicated, for tax purposes, the co-ownership of inherited properties is automatically converted
into an unregistered partnership the moment the said common properties and/or the incomes derived
therefrom are used as a common fund with intent to produce profits for the heirs in proportion to their
respective shares in the inheritance as determined in a project partition either duly executed in an
extrajudicial settlement or approved by the court in the corresponding testate or intestate proceeding.

G.R. No. L-68118 October 29, 1985

JOSE P. OBILLOS, JR., SARAH P. OBILLOS, ROMEO P. OBILLOS and REMEDIOS P. OBILLOS,
brothers and sisters, petitioners
vs. COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS, respondents.

Facts: On March 2, 1973 Jose Obillos, Sr. bought two lots with areas of 1,124 and 963 square metersof
located at Greenhills, San Juan, Rizal. The next day he transferred his rights to his four children, the
petitioners, to enable them to build their residences. The Torrens titles issued to them showed that they
were co-owners of the two lots.

In 1974, or after having held the two lots for more than a year, the petitioners resold them to the Walled
City Securities Corporation and Olga Cruz Canada for the total sum of P313,050. They derived from the
sale a total profit of P134, 341.88 or P33,584 for each of them. They treated the profit as a capital gain
and paid an income tax on one-half thereof or of P16,792.

In April, 1980, the Commissioner of Internal Revenue required the four petitioners to pay corporate
income tax on the total profit of P134,336 in addition to individual income tax on their shares thereof.The
petitioners are being held liable for deficiency income taxes and penalties totalling P127,781.76 on their
profit of P134,336, in addition to the tax on capital gains already paid by them.

The Commissioner acted on the theory that the four petitioners had formed an unregistered partnership or
joint venture The petitioners contested the assessments. Two Judges of the Tax Court sustained the
same. Hence, the instant appeal.

Issue: Whether or not the petitioners had indeed formed a partnership or joint venture and thus liable for
corporate tax.

Held: The Supreme Court held that the petitioners should not be considered to have formed a partnership
just because they allegedly contributed P178,708.12 to buy the two lots, resold the same and divided the
profit among themselves. To regard so would result in oppressive taxation and confirm the dictum that the
power to tax involves the power to destroy. That eventuality should be obviated.

As testified by Jose Obillos, Jr., they had no such intention. They were co-owners pure and simple. To
consider them as partners would obliterate the distinction between a co-ownership and a partnership. The
petitioners were not engaged in any joint venture by reason of that isolated transaction.

*Article 1769(3) of the Civil Code provides that "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 from which the returns are derived". There must be an unmistakable
intention to form a partnership or joint venture.*

Their original purpose was to divide the lots for residential purposes. If later on they found it not feasible
to build their residences on the lots because of the high cost of construction, then they had no choice but
to resell the same to dissolve the co-ownership. The division of the profit was merely incidental to the
dissolution of the co-ownership which was in the nature of things a temporary state. It had to be
terminated sooner or later.

They did not contribute or invest additional ' capital to increase or expand the properties, nor was there an
unmistakable intention to form partnership or joint venture.

WHEREFORE, the judgment of the Tax Court is reversed and set aside. The assessments are cancelled.
No costs.

All co-ownerships are not deemed unregistered partnership.Co-Ownership who own properties
which produce income should not automatically be considered partners of an unregistered partnership, or
a corporation, within the purview of the income tax law. To hold otherwise, would be to subject the income
of all

Co-ownerships of inherited properties to the tax on corporations, inasmuch as if a property does not
produce an income at all, it is not subject to any kind of income tax, whether the income tax on individuals
or the income tax on corporation.

As compared to other cases:

Commissioner of Internal Revenue, L-19342, May 25, 1972, 45 SCRA 74, where after an extrajudicial
settlement the co-heirs used the inheritance or the incomes derived therefrom as a common fund to
produce profits for themselves, it was held that they were taxable as an unregistered partnership.

This case is different from Reyes vs. Commissioner of Internal Revenue, 24 SCRA 198, where father and
son purchased a lot and building, entrusted the administration of the building to an administrator and
divided equally the net income, and from Evangelista vs. Collector of Internal Revenue, 102 Phil. 140,
where the three Evangelista sisters bought four pieces of real property which they leased to various
tenants and derived rentals therefrom. Clearly, the petitioners in these two cases had formed an
unregistered partnership.

HEIRS OF JOSE LIM vs JULIET LIM GR 172690

FACTS: In 1980, the heirs of Jose Lim alleged that Jose Lim entered into a partnership agreement with
Jimmy Yu and Norberto Uy. The three contributed P50,000.00 each and used the funds to purchase a
truck to start their trucking business. A year later however, Jose Lim died. The eldest son of Jose Lim,
Elfledo Lim, took over the trucking business and under his management, the trucking business prospered.
Elfledo was able to but real properties in his name. From one truck, he increased it to 9 trucks, all trucks
were in his name however. He also acquired other motor vehicles in his name.
In 1993, Norberto Uy was killed. In 1995, Elfledo Lim died of a heart attack. Elfledos wife, Juliet Lim, took
over the properties but she intimated to Jimmy and the heirs of Norberto that she could not go on with the
business. So the properties in the partnership were divided among them.
Now the other heirs of Jose Lim, represented by Elenito Lim, required Juliet to do an accounting of all
income, profits, and properties from the estate of Elfledo Lim as they claimed that they are co-owners
thereof. Juliet refused hence they sued her.
The heirs of Jose Lim argued that Elfledo Lim acquired his properties from the partnership that Jose Lim
formed with Norberto and Jimmy. In court, Jimmy Yu testified that Jose Lim was the partner and not
Elfledo Lim. The heirs testified that Elfledo was merely the driver of Jose Lim.
ISSUE: Who is the partner between Jose Lim and Elfledo Lim?
HELD: It is Elfledo Lim based on the evidence presented regardless of Jimmy Yus testimony in court that
Jose Lim was the partner. If Jose Lim was the partner, then the partnership would have been dissolved
upon his death (in fact, though the SC did not say so, I believe it should have been dissolved upon
Norbertos death in 1993). A partnership is dissolved upon the death of the partner. Further, no evidence
was presented as to the articles of partnership or contract of partnership between Jose, Norberto and
Jimmy. Unfortunately, there is none in this case, because the alleged partnership was never formally
organized.
But at any rate, the Supreme Court noted that based on the functions performed by Elfledo, he is the
actual partner.
The following circumstances tend to prove that Elfledo was himself the partner of Jimmy and Norberto:
1.) Cresencia testified that Jose gave Elfledo P50,000.00, as share in the partnership, on a date that
coincided with the payment of the initial capital in the partnership;
2.) Elfledo ran the affairs of the partnership, wielding absolute control, power and authority, without any
intervention or opposition whatsoever from any of petitioners herein;
3.) all of the properties, particularly the nine trucks of the partnership, were registered in the name of
Elfledo;
4.) Jimmy testified that Elfledo did not receive wages or salaries from the partnership, indicating that what
he actually received were shares of the profits of the business; and
5.) none of the heirs of Jose, the alleged partner, demanded periodic accounting from Elfledo during his
lifetime. As repeatedly stressed in the case of Heirs of Tan Eng Kee, a demand for periodic accounting is
evidence of a partnership.
Furthermore, petitioners failed to adduce any evidence to show that the real and personal properties
acquired and registered in the names of Elfledo and Juliet formed part of the estate of Jose, having been
derived from Joses alleged partnership with Jimmy and Norberto.
Elfledo was not just a hired help but one of the partners in the trucking business, active and visible in the
running of its affairs from day one until this ceased operations upon his demise. The extent of his control,
administration and management of the partnership and its business, the fact that its properties were
placed in his name, and that he was not paid salary or other compensation by the partners, are indicative
of the fact that Elfledo was a partner and a controlling one at that. It is apparent that the other partners
only contributed in the initial capital but had no say thereafter on how the business was ran. Evidently it
was through Elfredos efforts and hard work that the partnership was able to acquire more trucks and
otherwise prosper. Even the appellant participated in the affairs of the partnership by acting as the
bookkeeper sans salary.