3. Marjorie Tocao and William Belo vs.

CA
GR 127405 October 4, 2000
Business Organization Partnership, Agency, Trust Dissolution of the Partnership

FACTS:
William Belo introduced Nenita Anay to his girlfriend, Marjorie Tocao. The three agreed
to form a joint venture for the sale of cooking wares. Belo was to contribute P2.5
million; Tocao also contributed some cash and she shall also act as president and
general manager; and Anay shall be in charge of marketing. Belo and Tocao
specifically asked Anay because of her experience and connections as a marketer.
They agreed further that Anay shall receive the following:
10% share of annual net profits
6% overriding commission for weekly sales
30% of sales Anay will make herself
2% share for her demo services
They operated under the name Geminesse Enterprise, this name was however
registered as a sole proprietorship with the Bureau of Domestic Trade under Tocao.
The joint venture agreement was not reduced to writing because Anay trusted Belos
assurances.
The venture succeeded under Anays marketing prowess.
But then the relationship between Anay and Tocao soured. One day, Tocao advised
one of the branch managers that Anay was no longer a part of the company. Anay
then demanded that the company be audited and her shares be given to her.

ISSUE:
Whether or not there is a partnership.

RULING:
Yes, the parties involved in this case formed a partnership.
The Supreme Court held that to be considered a juridical personality, a partnership
must fulfill these requisites:
(1) two or more persons bind themselves to contribute money, property or industry to
a common fund; and
(2) intention on the part of the partners to divide the profits among themselves. It may
be constituted in any form; a public instrument is necessary only where immovable
property or real rights are contributed thereto.
This implies that since a contract of partnership is consensual, an oral contract of
partnership is as good as a written one.
In the case at hand, Belo acted as capitalist while Tocao as president and general
manager, and Anay as head of the marketing department and later, vice-president for
sales. Furthermore, Anay was entitled to a percentage of the net profits of the
business.
Even though it was not reduced to writing, for a partnership can be instituted in any
form. The fact that it was registered as a sole proprietorship is of no moment for such
registration was only for the companys trade name.
Anay was not even an employee because when they ventured into the agreement, they
explicitly agreed to profit sharing this is even though Anay was receiving commissions
because this is only incidental to her efforts as a head marketer.
The Supreme Court also noted that a partner who is excluded wrongfully from a
partnership is an innocent partner. Hence, the guilty partner must give him his due
upon the dissolution of the partnership as well as damages or share in the profits
realized from the appropriation of the partnership business and goodwill. An
innocent partner thus possesses pecuniary interest in every existing contract that
was incomplete and in the trade name of the co-partnership and assets at the time he
was wrongfully expelled.
An unjustified dissolution by a partner can subject him to action for damages because
by the mutual agency that arises in a partnership, the doctrine of delectus
personae allows the partners to have the power, although not necessarily the right to
dissolve the partnership.
Tocaos unilateral exclusion of Anay from the partnership is shown by her memo to
the Cubao office plainly stating that Anay was, as of October 9, 1987, no longer the
vice-president for sales of Geminesse Enterprise. By that memo, petitioner Tocao
effected her own withdrawal from the partnership and considered herself as having
ceased to be associated with the partnership in the carrying on of the business.
Nevertheless, the partnership was not terminated thereby; it continues until the
winding up of the business.
Therefore, the parties formed a partnership.