Anton vs Oliva

G.R. No. L-182563

Facts:
Spouses Ernest and Corazon Olivas entered into three Memoranda of
Agreement (MOA) with their daughter Gladys Miriam and their son-in-law
Jose Miguel, the Spouses Antons, for the setting up of a business
partnership covering three fast food stores, known as "Pinoy Toppings"
that were to be established at SM Megamall, SM Cubao, and SM
Southmall.
Under the MOAs, the Olivas were entitled to 30% share of the net profits
of the SM Megamall store and 20% in the cases of SM Cubao and SM
Southmall stores.
The Antons gave the Olivas a total of P2,547,000 representing their
monthly shares of the net profits from the operations of the SM Megamall
and SM Southmall stores but shares of the net profits from the store at
SM Cubao were never given.
In November 1997, the Antons all together stopped giving the Olivas all
their share in the net profits of the 3 stores.
Thus, the Olivas filed an action for accounting and specific performance
with damages against petitioner Antons before the Regional Trial Court
(RTC) of Quezon City.
The Olivas demanded an accounting of the partnership funds but in
response, Jose Miguel terminated the agreement. It is to be noted that
Gladys filed a separation case with Jose Miguel.
The Antons alleged that there was no partnership and they only borrowed
money from the Olivas to finance the opening of the stores.
The wife, Gladys, managed the operations of the business, and remitted
to the Olivas the amounts due to them even after the loans had been
paid. Moreover, the Antons paid Olivas their share in the profits of the
business.
The RTC held that there was no partnership but the Antons had an
obligation to render accounting and pay the share of Olivas. The Antons
appealed but CA affirmed the decision but modified it by deleting the
order to get an independent accountant. It further ordered to pay Olivas
the shares with interest.
Issues:
What is the relationship between the Antons and Olivas? Creditor-debtor
relationship
Do the Antons have the obligation to pay the Olivas their shares of the net
profits of the 3 stores plus legal interest on the shares? YES.

Held:
The relationship between the parties was that creditor-debtor and not
partnership.
Although MOA denominated the Olivas as partners, the amounts
they gave did not appear to be capital contributions to the
establishment of the stores.
Their obligation to pay the shares was not extinguished. Although the
Olivas were mere creditors, the Antons agreed to compensate them for
the risk they have taken. There was nothing illegal or immoral about
this compensation scheme. Thus, unless the MOAs are subsequently
terminated on valid grounds, the same remain valid and enforceable.
The Olivas have no right to demand accounting since they were not partners.
However, they have the right to know how much net profits the 3
stores were making annually since the Olivas were entitled to
percentages of those profits.
The Antons agreed to compensate them for the risks they had taken
considering that rhe Olivas granted the loans without any security and
they were to be paid such loans only if the stores made profits. If the
business suffered loses and could not pay, the Olivas would have
assumed those losses by themselves.
Furthermore, the MOAs forbade the Olivas from interfering with the
running of the stores.
The interest of 12% awarded is not interest on the loan but interest on
the unpaid shares of net profits of the 3 stores on account of Jose
Miguels unjustified refusal to pay them since 1997.