MERCANTILE LAW CASE DIGESTS

Case Name Subject and Topic Facts Issue Ruling

Lim vs. PH Fishing Gear Partnership On behalf of a corp., Chua and Yao entered into a WON there was a Yes, there was a partnership. Lim argued
Industries Inc. contract to purchase fishing nets with respondent. Chua partnership. that he only “leased” to Chua and Yao 2
G.R. No. 136448 Art. 1767, and Yao claimed that they were engaged in a business fishing vessels which were the main assets
November 3, 1999 Definition of a venture with Lim who was not a signatory to the contract. of the partnership. No lessor would
Partnership They failed to pay, hence a case was filed. The corp. of consent to the sale of his own boats to pay
Chua and Yao was not registered with the SEC. the debts of his lessees and the excess to be
divided among themselves.

The term “money” under the definition of

partnership need not to be physical cash. It
may be in the form of “credit” or
“industry”.
Evangelista vs. CIR Partnership 3 siblings bought several properties and appointed WON there was a Yes, there was a partnership.
G.R. No. L-9996 another sibling to manage and collect rents from the said partnership. 2 elements of a partnership were present in
October 15, 1957 Art. 1767, properties. CIR demanded a payment on tax for this case, namely;
Definition of a corporations (under old NIRC, partnerships are taxed the a. An agreement to contribute money,
Partnership same as corps). The siblings alleged that they are not a property or industry to a common
corp. (partnership). fund
b. With the intent to divide the profits
among themselves.
Both are present. They are not co-owners
because the properties were not inherited
but rather bough by them, and they had the
intention to divide the rents among
themselves.
Estansilao vs. CA, et al. Partnership Pet and res are siblings who are co-owners of certain lots WON there was a Yes, there was a partnership as shown in
G.R. No. L-49982 that are being leased to Shell Co. They agreed to open partnership, so the records.
April 27, 1988 Art. 1767, and operate a gasoline station with the initial investment that res may 1. They contributed money (P15,000
Definition of a of P15,000 to be taken from the advanced rentals from demand an rentals from Shell) to a common
Partnership Shell. They executed a joint affidavit to operate their accounting fund.
business. Res agreed to help pet in the business while pet 2. They were dividing the profits
was the one who operates and manages the business. Due among themselves.
to failure of pet to render proper accounting, res filed a There is no doubt that the parties hereto
complaint that they should execute a public document formed a partnership when they bound
embodying all the provisions of the a partnership themselves to contribute money to a
document under Art. 1771 of NCC. common fund with the intention of
 MERCANTILE LAW CASE DIGESTS
dividing the profits among themselves.
Heirs of Lim vs. Juliet Lim Partnership Jose Lim, Jimmy Yu and Norberto Uy, formed a WON Elfedo was Yes, he was a partner. The extent of his
G.R. No. 172690 partnership to engage in a trucking business. Jose manage a partner control, administration and management of
March 3, 2010 the business until his death. Then his son, Elfledo and the the partnership and its business, the fact
Art. 1767, remaining partners agreed to continue the business. The that its properties were placed in his name,
Definition of a trucks of the partnership were all registered with Elfledo. and that he was not paid salary or other
Partnership When Elfledo died, his sole heir, Juliet, his wife, took compensation by the partners, are
over the administration of the business. Pet claim that indicative of the fact that Elfledo was a
Elfledo was only an assistant hired by the partnership, partner and a controlling one at that. It is
hence he was not a partner. 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 Elfredo’s 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.
Sevilla vs. CA Partnership Sevila was running the branch of Tourist World Service WON she was a She was not an employee nor a partner. No
G.R. No. 41182-3 (TWS). It was agreed that she would receive 4% of the partner or EE-ER because TWS did not control the
April 5, 1988 ticket solicitations and 3% would go to TWS. employee. means and the ends of how she manages
Art. 1767, the branch.
Definition of a She was also not a partner because a joint-
Partnership venture (partnership) presupposed
generally an equal standing between
partners in operating the business. Here,
when TWS decided to close the branch,
Sevilla only conceded because she had no
standing.
Their relationship was that of principal and
agent. When she solicited airline fares,she
did it so for and behalf of TWS.

Torres vs CA Partnership Pet and res entered in a joint venture agreement to WON there was a Yes, there was a partnership. In their
G.R. No. 134599 develop a parcel of land into a subdivision. They partnership agreement, pet would contribute property
December 9, 1999 mortgage the property with a bank so that the funds will in the form of land while res would give
Art. 1767, be used for its development. They also agreed to share the WON the his industry and the amount needed for
 MERCANTILE LAW CASE DIGESTS
Definition of a proceeds. However, the project did not push through and partnership is general expenses and costs. Furthermore,
Partnership the land was foreclosed by the bank. Pet alleged that the void for violation the income would be divided according to
failure was due to res’ lack of funds, means and skills. of Art. 1773 the stipulated %. Here all the elements of a
partnership contract are present.

No, it was valid. An agreement is valid

even if there was no inventory attached to
the public instrument because Art. 1773
was intended to protect primarily 3rd
parties. Here, no 3rd parties will be
prejudiced (because the project did not
push through).
Sy vs. CA and Sahot Partnership Sahot worked as a truck driver for pets’ family. Due to WON Sahot was Employee. Pet determined his wages and
G.R. No. 142293 old age, Sahot had medical problems. When he went to a partner or rest days. He also did not have freedom
February 27, 2003 Art. 1767, SSS for his premiums, he then discovered that his employee where he would go, what he would do and
Definition of a premiums were not remitted by his employer. He then how he would do it.
Partnership threatened to filed a labor case because he was dismissed
for availing his sick leave. Pet argues that the case before There was no written agreement as to the
the NLRC should be dismissed because Sahot was a contract of partnership. Sahot did not
partner and not an employee. contribute money, property, or industry for
the purpose of engaging in the supposed
business. No proof in profit sharing,
management, administration or adoption of
policies.
Aurbach vs. Sanitary Wares Partnership Saniwares is a domestic corp. It entered into an WON a joint It was a joint venture. The rules is that
G.R. No. 75875 agreement with ASI, a foreign corp. to engage in a venture was whether the parties to a particular contract
December 15, 1989 Art. 1767, business of manufacturing and selling sanitary wares. formed or a corp have established among themselves a joint
Definition of a Due to their disagreements they filed several suits as to venture or some other relation depends
Partnership the election of their officers. upon their actual intentions. The
testimonial evidence presented by
Lagdameo and Young shows that the
parties agreed to establish a joint venture.
The veto-power of ASI, the right of ASI to
designate officers and the provision that
ASI shall designate 3 out 9 directions and
the other group shall designate 6 out of 9
clearly indicates that there are 2 distinct
 MERCANTILE LAW CASE DIGESTS
groups.
Tocao and Belo vs. CA and Partnership Belo introduced Anay to Tacao, who expressed her desire WON there was a Yes, there was a partnership. Since a
Anay to enter into a joint venture for the importation and local partnership contract of partnership is consensual, it
G.R. No. 127405 Art. 1767, distribution of kitchen cookwares. Belo financed while does not need to be written. Anay
October 4, 2000 Definition of a Anay was the one marketing the cookwares and Tacao contributed her expertise in the business of
Partnership was the president and general manager. Anay organized distributorship of cookware. Hence, under
the admin and sales staff while Tacao hired and fired the law she is an industrial partner.
employees. Anay would be entitled to 10% of annual
profits, a commission of 6%, 30% of sales and 2%
demonstration services. The business was under the name
of Tacao, a sole proprietorship. Tacao then dismissed
Anay and barred her from entering into all branches.
Tacao did not also pay Anay her share in the business.
Santos vs. Sps. Reyes Partnership Santos and Nieves Reyes were introduced to each other WON the Sps. They were his partners. The partnership
G.R. No. 135813 by Zabat with regards to starting a lending business Reyes were can be deduced from the "Articles of
October 25, 2001 Art. 1767, venture. They agreed that Santos would be the financier employees or Agreement" which stipulated that the
Definition of a and Nieves Reyes and Zabat would take charge of the partners of signatories therein shall share in the profits
Partnership solicitation of members and collection of loan payments. Santos. of the business in a 70-15-15 manner. The
70% of the profits would go to Santos while Zabat and stipulation clearly proved the
Nieves would receive 15% each. Due to misappropriation establishment of a partnership due to facts
of funds, Santos filed a case against Nieves Reyes, the that there was intention to divide the
appointed bookkeeper and her husband Arsenio Reyes, profits among themselves. Nieves and
the credit investigator who replaced Zabat. The Arsenio were not mere employees rather,
controversy arose their standing in the said case filed by they were industrial partners. Nieves and
Santos was that of mere employees. Zabat, who was later replaced by Arsenio,
contributed industry to the common fund
with the intention of sharing in the profits
of the partnership. They provided services
without which the partnership would not
have had the capacity to carry on the
purpose for which it was organized and
hence, they are considered industrial
partners.
Saludo Jr. vs. PNB Partnership SAFA Law leased a portion of PNB’s Building. After the WON SAFA may Yes. SAFA is a partnership. It acquired
G.R. No. 193138 expiration of the lease, it continued to occupy the place be impleaded in a juridical personality by operation of law.
August 20, 2018 Art. 1768, for a few more years. PNB sent a demand letter for the case. The perfection and validity of a contract
Partnership as a non-payment of rentals. SAFA did not pay. PNB Filed a brings about the creation of a juridical
 MERCANTILE LAW CASE DIGESTS
Juridical Person case. Saludo, managing partner, that SAFA is a sole person separate and distinct from that of
proprietorship and should not be included in the case for the individuals comprising it. Hence, it can
it has no juridical personality. be impleaded in a case.

*Sycip Case was declared only an orbiter

dictum (regarding law firms as
partnerships) *** yes law firms are
considered as GPP
Sunga-Chan vs. Sunga Partnership Pet’s father and res entered into a verbal agreement to put WON the Yes. A partnership may be constituted in
G.R. No. 143340 up a business of selling LPG. They both contributed partnership any form except when immovable
August 15, 2001 Art. 1768, aP100k each and intended to divide the profits among acquired juridical properties are contributed. Hence, based on
Partnership as a them. However, it was registered under the name of personality the intention of the parties, a verbal
Juridical Person Jacinto as a sole proprietorship. despite non- contract was formed. The essential
registration with elements of partnership were present:
SEC 1. Mutual contribution to a common
fund
2. Joint interest
3. Intention to divide the profits
Non-compliance with the SEC does not
render it void. It acquired juridical
personality upon the formation of a
contract.
Villareal vs. Ramirez Partnership L, C and J (pets) formed a partnership with a capital of WON pets are the No, it should have been the partnership.
G.R. No. 144214 P750,000 and was registered under Aquarious Food proper parties to Res had no right to demand from pet. Pet
July 14, 2004 Art. 1768, House and Catering Services. D joined as a partner with a the case do not personally hold the equity or assets
Partnership as a contribution of P850k. Pets then closed the business of the partnership. “The partnership has a
Juridical Person without consent of res. due to the increase of rentals. juridical personality separate and distinct
Res filed a sum of money against pets and not the from that of each of the partners. Since, the
partnership. capital was contributed to the partnership
and not to petitioners, it is the partnership
that must refund his equity.
Aguila vs. CA Partnership Aguila is the managing partner of AC Co., a lending WON Aguilar is No. It must be AC Co. AC Co. has a
G.R. No. 127347 business. AC Co. entered in an agreement with respond the proper party. separate and distinct juridical personality
November 25, 1999 Art. 1768, spouses. They agreed that AC will buy a land occupied by from each of the partners. Partners cannot
Partnership as a the spouses for P200k with right to repurchase. The be held liable for the obligations of the
Juridical Person spouses filed to repurchase. AC Co filed an ejectment partnership unless it is shown that the legal
case. Spouses filed a declaration nullity of contract fiction of a different juridical personality is
 MERCANTILE LAW CASE DIGESTS
against Aguilar (not AC). being used for fraudulent, unfair or illegal
purposes. Res did not show AC Co is
being used in an illegal manner.
Philex Mining Corp vs. CIR Partnership

Art. 1769, Rules to

Determine the
Existence of a
Partnership
Heirs of Tan Eng Kee vs. Partnership
CA
G.R. No. 126811 Art. 1769, Rules to
October 3,2000 Determine the
Existence of a
Partnership
Ona vs. CIR Partnership

Art. 1769, Rules to

Determine the
Existence of a
Partnership
Obillos vs. CIR Partnership

Art. 1769, Rules to

Determine the
Existence of a
Partnership
Deluao vs. Casteel Partnership

Art. 1770, Object

or Purpose of
Partnership
Agad vs. Mabato Partnership Agad and Mabato are partners in a fishpond business WON the No, it is valid. It is stated in the instrument
G.R. No. L-24193 pursuant to a public instrument. Mabato was managing partnership is that that partnership was established to
June 28, 1968 Art. 1773, the business. He failed to render accounting despite the void. “operate as a fishpond” not to “engage in a
Contribution of demands of Agad. When Agad filed a case, Mabato raised fishpond business”. None of the parties
Immovable the defense that there was no partnership for the contributed a fishpond or a real property
 MERCANTILE LAW CASE DIGESTS
Property instrument was not attached with an inventory of the real right to any fishpond. Hence, it is valid
properties contributed. (weird case lol)
Navarro vs. CA Partnership Pet alleges that it formed a verbal partnership with WON a No. SC examined the evidence and it
G.R. No. 101847 defendant in the business of Air Freight Service Agency partnership concluded that there is no proof that a
May 27, 1993 Art. 1773, in Bacolod. Pet claims that the writ of replevin is void existed. partnership had been constituted at the
Contribution of since the properties belonging to the partnership do not inception of the transaction. (SC did not
Immovable belong to any of the parties. elaborate on why lol)
Property
Torres vs. CA Partnership Pet entered into a “joint venture agreement” with Manuel WON the
No. Article 1773 was intended primarily to
G.R. No. 134559 Torres for the development of a parcel of land into a partnership was protect third persons. Thus, the eminent
December 9, 1999 Art. 1773, subdivision. The land was registered into Manuel’s name. void for violation
Arturo M. Tolentino states that under the
Contribution of They mortgaged the property to a bank for P400k so that of Art. 1773 aforecited provision which is a
Immovable the money will be used as funding. All three of them complement of Article 1771, "The
Property agreed to share in the profits. Pet argued that there was no execution of a public instrument would be
partnership because Art. 1773 was not complied for there useless if there is no inventory of the
was no inventory attached to the public instrument. property contributed, because without its
designation and description, they cannot be
subject to inscription in the Registry of
Property, and their contribution cannot
prejudice third persons. This will result in
fraud to those who contract with the
partnership in the belief [in] the efficacy of
the guaranty in which the immovables may
consist. Thus, the contract is declared void
by the law when no such inventory is
made." The case at bar does not involve
third parties who may be prejudiced.
Angeles vs. Hon. Sec. of Partnership Sps. Angeles filed an estafa case against Mercado (res). WON there was a Yes, there was a partnership.
Justice They allege that Mercado tricked them into entering into partnership and 1. Angeles contributed money to the
G.R. No. 1426612 Art. 1773, a contract of antichresis over 8 parcels of land with was it valid partnership and not real property
July 29, 2005 Contribution of lanzones trees. Mercado failed to render accounting 2. Mere failure to register with SEC
Immovable despite demands. When the complaint was appealed to does invalidate a partner
Property Sec of Justice, it ruled that estafa cannot be sustained *the antichresis was AFTER the formation
because they are partners. Sps. Angeles argued that the of the partnership ***hence it was not
contract or agreement was void for non-compliance with contributed
Art. 1772 for not registering with SEC.
Litonjua vs. Litonjua Partnership A and E are brothers. A filed several suits against E and WON the Yes, it is void. The agreement was
 MERCANTILE LAW CASE DIGESTS
G.R. No. 166299-300 Yang, partner of E. A alleged that he and E entered into a partnership is 1. Undated and unsigned, hence not a
December 13, 2005 Art. 1773, joint venture/partnership agreement in a theater business void for violation public instrument
Contribution of which later on expanded. In their agreement, A is to be of 1773. 2. Not registered with SEC
Immovable given 10% or P1M whichever is higher in the business. 3. No inventory was attached despite
Property For 28 years A and E had accumulated various assets, their contribution of real properties
mostly real property. E, however registered them in his A’s share in the partnership was his share
name. A, asked for accounting but E did not heed. E in their family business which owned
argued that there was no partnership for the agreement several immovable properties (real rights)
violated the inventory requirement in Art. 1773. and his industry. Hence, an inventory is
need for the document to be valid.