Insurance Case Digest: Tai Tong Chuache & Co. V.

Insurance Commission (1988)

G.R. No. L-55397 February 29, 1988

FACTS:

Azucena Palomo bought a parcel of land and building from Rolando Gonzales and assumed a
mortgage of the building in favor of S.S.S. which was insured with S.S.S. Accredited Group of Insurers. April
19, 1975: Azucena Palomo obtained a loan from Tai Tong Chuache Inc. in the amount of P100,000 and to
secure it, the land and building was mortgaged. June 11, 1975: Pedro Palomo secured a Fire Insurance
Policy covering the building for P50,000 with Zenith Insurance Corporation. July 16, 1975: another Fire
Insurance policy was procured from Philippine British Assurance Company, covering the same building for
P50,000 and the contents thereof for P70,000. Before the occurrence of the peril insured against the
Palomos had already paid their credit due the

July 31, 1975: building and the contents were totally razed by fire. Palomo was able to claim
P41,546.79 from Philippine British Assurance Co., P11,877.14 from Zenith Insurance Corporation and
P5,936.57 from S.S.S. Group of Accredited Insurers but Travelers Multi-Indemnity refused so it demanded
the balance from the other three but they refused so they filed against them

Insurance Commission, CFI: absolved Travelers on the basis that Arsenio Cua was claiming and
NOT Tai Tong Chuache. Palomo Appealed. Travelers reasoned that the policy is endorsed to Arsenio Chua,
mortgage creditor. Tai Tong Chuache & Co. filed a complaint in intervention claiming the proceeds of the
fire Insurance Policy issued by travelers affirmative defense of lack of insurable interest that before the
occurrence of the peril insured against the Palomos had already paid their credit due the petitioner

ISSUE: W/N Tai Tong Chuache & Co. has insurable interest

HELD:

YES. Travelers Multi-Indemnity Corporation to pay Tai Tong Chuache & Co. when the creditor is in
possession of the document of credit, he need not prove non-payment for it is presumed. The validity of
the insurance policy taken b petitioner was not assailed by private respondent. Moreover, petitioner's
claim that the loan extended to the Palomos has not yet been paid was corroborated by Azucena Palomo
who testified that they are still indebted to herein petitioner

Chua being a partner of petitioner Tai Tong Chuache & Company is an agent of the partnership.
Being an agent, it is understood that he acted for and in behalf of the firm. Upon its failure to prove the
allegation of lack of insurable interest on the part of the petitioner, Travellers must be held liable.
 Mendiola vs. Court of Appeals

Gr. No. 159333 July 31, 2006

Facts:

Premises considered, judgment is hereby rendered ordering herein respondents Cellmark AB and Pacific
Forest Resources, Inc., jointly and severally to compensate complainant Arsenio T. Mendiola separation
pay equivalent to at least one month for every year of service, whichever is higher (sic), as
reinstatement is no longer feasible by reason of the strained relations of the parties equivalent to five
(5) months in the amount of $32,000.00 plus the sum of P250,000.00; pay complainant the sum
of P500,000.00 as moral and exemplary damages and ten percent (10%) of the amounts awarded as and
for attorney's fees. All other claims are dismissed for lack of basis.

Issue: W/N partnership or co-ownership exist between the parties.

Held:

The Labor Arbiter's decision held Cellmark solidarily liable with respondent Pacfor. However, as
respondent Pacfor pointed out in its Motion for Reconsideration, the courts never acquired jurisdiction
over the person of Cellmark. Respondent Cellmark is the parent corporation of respondent Pacfor. It is a
corporation duly organized under the laws of Sweden, with principal office in Gothenburg, Sweden. It
did not receive any summons from any court or quasi-judicial body with regard to the instant case, nor
did it voluntarily submit itself to the jurisdiction of the Labor Arbiter.
 Information Technology Foundation of the Philippines vs. Commission on Elections

G.R. No. 159139 January 13, 2004

FACTS:

Petitioners were participating bidders questioning the identity and eligibility of the awarded
contractor Mega Pacific Consortium (MPC) where the competing bidder is Mega Pacific eSolutions, Inc.
(MPEI) as signed by Mr. Willy Yu of the latter. Private respondent claims that MPEI is the lead partner tied
up with other companies like SK C&C, WeSolv, Election.com and ePLDT. Respondent COMELEC obtained
copies of Memorandum of Agreements and Teaming Agreements.

ISSUE:

Whether or not there was an existence of a consortium.

RULING:

NO. There was no documentary or other basis for Comelec to conclude that a consortium had
actually been formed amongst MPEI, SK C&C and WeSolv, along with Election.com and ePLDT. The
president of MPEI signing for allegedly in behalf of MPC without any further proof, did not by itself prove
the existence of the consortium. It did not show that MPEI or its president have been duly pre-authorized
by the other members of the putative consortium to represent them, to bid on their collective behalf and,
more important, to commit them jointly and severally to the bid undertakings. The letter is purely self-
serving and uncorroborated.
 MOBIL OIL PHILIPPINES V. CFI RIZAL

Gr. No. 40457 May 8, 1992

FACTS:

On November 8, 1972, petitioner filed a complaint in the Court of First Instance of Rizal against
the partnership La Mallorca and its general partners, which included private respondents, for collection
of a sum of money arising from gasoline purchased on credit but not paid, for damages and attorney’s
fees.

ISSUE: W/N public respondent acted with grave abuse of discretion amounting to lack of jurisdiction in
declaring null and void its earlier decision of July 25, 1974.

HELD:

Yes, respondents acted with grave abuse of discretion. The judgment was rendered in favor of the
plaintiff and against the defendants ordering the defendant La Mallorca Partnership to pay the plaintiff.
From a joint venture/partnership theory which he adopted and consistently pursued in his complaint.
Respondents shall be excluded and that only nominal attorney's fees shall be awarded. Petitioner
embraced the innominate contract theory. The defense agreed to submit the case for decision solely on
the basis of evidence adduced by plaintiff Mobil Oil but past interest in the amount of P150. An inventory
of the contributed property duly signed by the parties should be attached to the public instrument. Being
unsigned and referring to a partnership involving more than P3. MOBIL OIL PHILIPPINES. the counsel of
the defendant successfully bargained for a compromise agreement.
 Lim vs. Philippine Fishing Gear Industries Inc.

Gr. No. 136448 November 3, 1999

FACTS:

Lim Tong Lim requested Peter Yao and Antonio Chuato engage in commercial fishing with him.
The three agreed to purchase two fishing boats but since they do not have the money they borrowed
from one Jesus Lim the brother of Lim Tong Lim. Subsequently, they again borrowed money for the
purchase of fishing nets and other fishing equipments. Yao and Chua represented themselves as acting in
behalf of “Ocean Quest Fishing Corporation” (OQFC) and they contracted with Philippine Fishing Gear
Industries (PFGI) for the purchase of fishing nets amounting to more than P500k. However, they were
unable to pay PFGI and hence were sued in their own names as Ocean Quest Fishing Corporation is a non-
existent corporation. Chua admitted his liability while Lim Tong Lim refused such liability alleging that
Chua and Yao acted without his knowledge and consent in representing themselves as a corporation.

ISSUE: W/N Lim Tong Lim is liable as a partner

HELD:

Yes. It is apparent from the factual milieu that the three decided to engage in a fishing business.
Moreover, their Compromise Agreement had revealed their intention to pay the loan with the proceeds
of the sale and to divide equally among them the excess or loss. The boats and equipment used for their
business entails their common fund. 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. The principle of corporation by estoppel cannot apply in the case as Lim Tong Lim also
benefited from the use of the nets in the boat, which was an asset of the partnership. Under the law on
estoppel, those acting in behalf of a corporation and those benefited by it, knowing it to be without valid
existence are held liable as general partners. Hence, the question as to whether such was legally formed
for unknown reasons is immaterial to the case.

Ortega vs. CA

Gr. No. 109248 July 3, 1995

FACTS:

On December 19, 1980, respondent Misa associated himself together, as senior partner with
petitioners Ortega, del Castillo, Jr., and Bacorro, as junior partners. On Feb. 17, 1988, respondent Misa
wrote a letter stating that he is withdrawing and retiring from the firm and asking for a meeting with the
petitioners to discuss the mechanics of the liquidation. On June 30, 1988, petitioner filed a petition to the
Commission’s Securities Investigation and Clearing Department for the formal dissolution and liquidation
of the partnership. On March 31, 1989, the hearing officer rendered a decision ruling that the withdrawal
of the petitioner has not dissolved the partnership. On appeal, the SEC en banc reversed the decision and
was affirmed by the Court of Appeals. Hence, this petition.

ISSUE: W/N the Court of Appeals has erred in holding that the partnership is a partnership at will and
whether or not the Court of Appeals has erred in holding that the withdrawal of private respondent
dissolved the partnership regardless of his good or bad faith

HELD:

No. The SC upheld the ruling of the CA regarding the nature of the partnership. The SC further
stated that a partnership that does not fix its term is a partnership at will. The birth and life of a partnership
at will is predicated on the mutual desire and consent of the partners. The right to choose with whom a
person wishes to associate himself is the very foundation and essence of that partnership. Its continued
existence is, in turn, dependent on the constancy of that mutual resolve, along with each partner's
capability to give it, and the absence of a cause for dissolution provided by the law itself. Verily, any one
of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will. He must, however,
act in good faith, not that the attendance of bad faith can prevent the dissolution of the partnership but
that it can result in a liability for damages.

DAN FUE LEUNG VS IAC and LEUNG YIU

Gr. No. 70926 July 3, 1995

FACTS:

Dan Fue Leung. The Sun Wah Panciteria was registered as a single proprietorship and its licenses
and permits were issued to and in favor of petitioner Dan Fue Leung as the sole proprietor. Respondent
Leung Yiu adduced evidence during the trial of the case to show that Sun Wah Panciteria was actually a
partnership and that he was one of the partners having contributed P4,000.00 to its initial establishment.
Lower court ruled in favor of the private respondent. Petitioner appealed the trial court's amended
decision. However, the questioned decision was further modified and affirmed by the appellate court.

Both the trial court and the appellate court declared that the private petitioner is a partner and is
entitled to a share of the annual profits of the restaurant. Hence, an appeal to the SC. The petitioner
argues that private respondent extended 'financial assistance' to herein petitioner at the time of the
establishment of the Sun Wah Panciteria, in return of which private respondent allegedly will receive a
share in the profits of the restaurant. It was, therefore, error for the Appellate Court to interpreter
construe 'financial assistance' to mean the contribution of capital by a partner to a partnership.

ISSUE: W/N he private respondent is a partner of the petitioner in the establishment of Sun Wah
Panciteria.

HELD:
 In essence, the private respondent alleged that when Sun Wah Panciteria was established, he
gave P4,000.00 to the petitioner with the understanding that he would be entitled to twenty-two percent
(22%) of the annual profit derived from the operation of the said panciteria. These allegations, which were
proved, make the private respondent and the petitioner partners in the establishment of Sun Wah
Panciteria because Article 1767 of the Civil Code provides that “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". Therefore, the lower courts did not err in construing
the complaint as one wherein the private respondent asserted his rights as partner of the petitioner in
the establishment of the Sun Wah Panciteria, notwithstanding the use of the term financial assistance
therein.SC affirmed appellate court's decision and ordered the dissolution of the partnership.

EMNACE vs. CA

Gr. No. 126334 November 23, 2001

FACTS:

Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a business concern
known as Ma. Nelma Fishing Industry. Sometime in January of 1986, they decided to dissolve their
partnership and executed an agreement of partition and distribution of the partnership properties among
them.

Petitioner failed to submit to Tabanao's heirs any statement of assets and liabilities of the
partnership, and to render an accounting of the partnership's finances. Petitioner also reneged on his
promise to turn over to Tabanao's heirs the deceased's 1/3 share in the total assets of the partnership.
Tabanao's filed against petitioner an action for accounting, payment of shares, division of assets and
damages.

ISSUE: W/N the heirs of Vicente Tabanao Lacks the capacity to sue the petitioner.

HELD:

No. The surviving spouse does not need to be appointed as executrix or administratrix of the
estate before she can file the action. She and her children are complainants in their own right as
successors of Vicente Tabanao. From the very moment of Vicente Tabanao's death, his rights insofar as
the partnership was concerned were transmitted to his heirs, for rights to the succession are transmitted
from the moment of death of the decedent.
 Whatever claims and rights Vicente Tabanao had against the partnership and petitioner were
transmitted to respondents by operation of law, more particularly by succession, which is a mode of
acquisition by virtue of which the property, rights and obligations to the extent of the value of the
inheritance of a person are transmitted. Moreover, respondents became owners of their respective
hereditary shares from the moment Vicente Tabanao died.