2. Ortega vs.

CA
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 Commision'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:
Whether or not 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.
3. Pabalan vs Velez

Pabalan received P3,000 of the purchase price. When Fitton died, he failed to pay into the partnership funds the
remainingP3,000. Owing to the failure of Fitton to comply with his obligation, the properties in question had been
entirely unproductive, resulting in losses and damages to Pabalan.Plaintiff prayed for the rescission of the double
contract (partnership and sale) entered into. Defendant Velez is the administrator of Fittons estate.
ISSUE: WON recission is the proper remedy.
RULING:
Yes, in bilateral contracts, when one of the parties fails to comply with his engagements, the party prejudiced is
entitled to choose between enforcement of the obligation or a rescission of the contract, with the payment of
damages and interest in either case. In the case at bar, enforcement cannot be had because the defaulting
partner is already dead. Justice requires the dissolution of the company and the rescission of the said sale.

4. Moran, Jr. v. CA
G.R. No. L-59956 Oct. 31, 1984
Justice Gutierrez, Jr.
Facts:

Pabalan owned two lots, a rural real estate devoted to agricultural purposes and an urban lot. In his desire to put
the two lots to productive use, he agreed to enter into a regular mercantile partnership with Walter Fitton.

The agreement stipulates that they form a partnership known by the name of AM Pabalan and Company with a
capital stock at P9,000; that Pabalan would contribute P3,000 in cash while Fitton would contribute P6,000 in real
property; that Pabalan would sell his two lots to Fitton for P6,000; that Pabalan would receive P3,000 of the
purchase price while the remaining will be his contribution to the capital; and that Fitton would contribute the said
two lots as his agreed capital contribution.

Issue:

Held:

Pecson and Moran entered into an agreement for the printing of posters featuring the delegates of the
1971 Constitutional Convention
o That 95k posters were supposed to be printed and sold at P2/each
o That each would contribute P15k
o That Moran will supervise the work, while Pecson would receive a P1k monthly commission
Pecson gave Moran P10k for which the latter issued a receipt
Only 2k posters were printed, but each was sold for P5
o Moran then executed 2 promissory notes in favor of Pecson
Pecson then filed an action for the recovery of a sum of money for the return of his P10k contribution,
payment of his share in the profits that the partnership would have earned
TC: each party is entitled to rescind the contract since both failed to fulfill their respective promises
(Moran the printing of the 95k posters; Pecson the P15k contribution)
CA: Moran must pay Pecson, among others, the amount of expected profits and the latters commission
in the partnership

WON Moran is obliged to give Pecson the amount of expected profits from their partnership.

No, he is not.
Rule: when a partner who has undertaken to contribute a sum of money fails to do so, he becomes a
debtor of the partnership for whatever he may have promised to contribute (Art. 1786) and for interests
and damages from the time he should have complied with his obligations (Art. 1788)
Being a contract of partnership, each partner must share in the profits and losses of the venture, for that
is the essence of partnership.
o Even in the assurance of the other partner that they would earn a huge amount of profits, in
the absence of fraud, the other cannot claim a right to recover the highly speculative profits
o In the present case, the fantastic nature of expected profits is obvious that various factors
need to be considered
o The failure of COMELEC to proclaim all 320 candidates of the Constitutional Convention on
time was a major factor in Morans decision not to go on with the printing of all 95,000 posters
o Hidden risks in any business venture have to be considered
However, as it was shown that Pecson gave money to Moran (P10k) which the latter used to print the
first batch of posters, and since these posters were sold and profits were realized from such sale,
Pecson is entitled to recover his share of such profits

6. Tai Tong v Insurance G.R. No. L-55397 February 29, 1988

J. Gancayco
Facts:
Azucena Palomo obtained a loan from Tai Tong Chuache Inc. in the amount of P100,000.00. To secure
the payment of the loan, a mortgage was executed over the land and the building in favor of Tai Tong
Chuache & Co. Arsenio Chua, representative of Thai Tong Chuache & Co. insured the latter's interest
with Travellers Multi-Indemnity Corporation for P100,000.00 (P70,000.00 for the building and
P30,000.00 for the contents thereof)
Pedro Palomo secured a Fire Insurance Policy covering the building for P50,000.00 with respondent
Zenith Insurance Corporation. On July 16, 1975, another Fire Insurance was procured from respondent
Philippine British Assurance Company, covering the same building for P50,000.00 and the contents
thereof for P70,000.00.
The building and the contents were totally razed by fire.
Based on the computation of the loss, including the Travellers Multi- Indemnity, respondents, Zenith
Insurance, Phil. British Assurance and S.S.S. Accredited Group of Insurers, paid their corresponding
shares of the loss. Complainants were paid the following: P41,546.79 by Philippine British Assurance
Co., P11,877.14 by Zenith Insurance Corporation, and P5,936.57 by S.S.S. Group of Accredited
Insurers Demand was made from respondent Travellers Multi-Indemnity for its share in the loss but the
same was refused. Hence, complainants demanded from the other three (3) respondents the balance of

each share in the loss in the amount of P30,894.31 (P5,732.79-Zenith Insurance: P22,294.62, Phil.
British: and P2,866.90, SSS Accredited) but the same was refused, hence, this action.
In their answers, Philippine British Assurance and Zenith Insurance Corporation denied liability on the

ground that the claim of the complainants had already been waived, extinguished or paid. Both
companies set up counterclaim in the total amount of P 91,546.79.
SSS Accredited Group of Insurers informed the Commission that the claim of complainants for
the balance had been paid in the amount in full.
Travellers Insurance, on its part, admitted the issuance of a Policy and alleged defenses that Fire
Policy, covering the furniture and building of complainants was secured by a certain Arsenio Chua and
that the premium due on the fire policy was paid by Arsenio Chua.
Tai Tong Chuache & Co. also filed a complaint in intervention claiming the proceeds of the

fire Insurance Policy issued by respondent Travellers Multi-Indemnity.

As adverted to above respondent Insurance Commission dismissed spouses Palomos' complaint on the

ground that theinsurance policy subject of the complaint was taken out by Tai Tong Chuache &
Company, for its own interest only as mortgagee of the insured property and thus complainant as
mortgagors of the insured property have no right of action against the respondent. It likewise dismissed
petitioner's complaint in intervention in the following words:
From the above decision, only intervenor Tai Tong Chuache filed a motion for reconsideration but it was
likewise denied hence, the present petition.
Issue: WON Tai Tong had insurable interest
Held: Yes. Petition granted.
Ratio:
Respondent advanced an affirmative defense of lack of insurable interest on the part of the petitioner
that before the occurrence of the peril insured against, the Palomos had already paid their credit due the
petitioner. However, they were never able to prove that Tai had a lack of insurable interest. Hence, the
decision must be adverse against them.
However respondent Insurance Commission absolved respondent insurance company from liability on
the basis of thecertification issued by the then Court of First Instance of Davao, Branch II, that in a
certain civil action against the Palomos, Arsenio Lopez Chua stands as the complainant and not Tai
Tong Chuache.
From said evidence respondent commission inferred that the credit extended by petitioner to the
Palomos secured by the insured property must have been paid. These findings was based upon a mere
inference.

Spouses Realubit claimed that they have been engaged in the tube ice trading business under a single
proprietorship even before their dealings with Biondo.

The record of the case shows that the petitioner to support its claim for the insurance proceeds offered
as evidence the contract of mortgage which has not been cancelled nor released. It has been held in a
long line of cases that when thecreditor is in possession of the document of credit, he need not prove
non-payment for it is presumed. The validity of theinsurance policy taken by 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 stillindebted to herein
petitioner.
Public respondent argues however, that if the civil case really stemmed from the loan granted
to Azucena Palomo by petitioner the same should have been brought by Tai Tong Chuache or by its
representative in its own behalf. From the above premise, respondent concluded that the obligation
secured by the insured property must have been paid. However, it should be borne in mind that
petitioner being a partnership may sue and be sued in its name or by its duly authorized representative.
Petitioner's declaration that Arsenio Lopez Chua acts as the managing partner of the partnership was
corroborated by respondent insurance company. Thus Chua as the managing partner of the partnership
may execute all acts of administration including the right to sue debtors of the partnership in case of
their failure to pay their obligations when it became due and demandable. Public respondent's allegation
that the civil case flied by Arsenio Chua was in his capacity as personal creditor of spouses Palomo has
no basis. The policy, then had legal force and effect.

8.

JOSEFINA P. REALUBIT vs. PROSENCIO D. JASO and EDENG JASO

G.R. No. 178782
September 21, 2011

FACTS
Petitioner Josefina Realubit entered into a Joint Venture Agreement with Francis Eric Amaury Biondo, a
French national, for the operation of an ice manufacturing business. With Josefina as the industrial
partner and Biondo as the capitalist partner, the parties agreed that they would each receive 40% of the
net profit, with the remaining 20% to be used for the payment of the ice making machine which was
purchased for the business. For and in consideration of the sum of P500,000.00, however, Biondo
subsequently executed a Deed of Assignment transferring all his rights and interests in the business in
favor of respondent Eden Jaso, the wife of respondent Prosencio Jaso.With Biondos eventual
departure from the country, the Spouses Jaso caused their lawyer to send Josefina a letter apprising her
of their acquisition of said Frenchmans share in the business and formally demanding an accounting
and inventory thereof as well as the remittance of their portion of its profits.
Faulting Josefina with unjustified failure to heed their demand, the Spouses Jaso commenced the
instant suit for specific performance, accounting, examination, audit and inventory of assets and
properties, dissolution of the joint venture, appointment of a receiver and damages. The said complaint
alleged that the Spouses Realubit had no gainful occupation or business prior to their joint venture with
Biondo and that aside from appropriating for themselves the income of the business, they have
fraudulently concealed the funds and assets thereof thru their relatives, associates or dummies. The

The RTC rendered its Decision discounting the existence of sufficient evidence from which the income,
assets and the supposed dissolution of the joint venture can be adequately reckoned. Upon the finding,
however, that the Spouses Jaso had been nevertheless subrogated to Biondos rights in the business in
view of their valid acquisition of the latters share as capitalist partner. On appeal before the CA, the
foregoing decision was set aside
upon the following findings that the Spouses Jaso validly acquired Biondos share in the business which
had been transferred to and continued its operations and not dissolved as claimed by the Spouses
Realubit.

1.
2.
3.

ISSUES
Whether there was a valid assignment or rights to the joint venture
Whether the joint venture is a contract of partnership
Whether Jaso acquired the title of being a partner based on the Deed of Assignment

RULING
1.
Yes. As a public document, the Deed of Assignment Biondo executed in favor of Eden not only
enjoys a presumption of regularity but is also considered prima facie evidence of the facts therein
stated. A party assailing the authenticity and due execution of a notarized document is, consequently,
required to present evidence that is clear, convincing and more than merely preponderant. In view of the
Spouses Realubits failure to discharge this onus, we find that both the RTC and the CA correctly upheld
the authenticity and validity of said Deed of Assignment upon the combined strength of the abovediscussed disputable presumptions and the testimonies elicited from Eden and Notary Public Rolando
Diaz.
2.
Yes. Generally understood to mean an organization formed for some temporary purpose, a joint
venture is likened to a particular partnership or one which has for its object determinate things, their use
or fruits, or a specific undertaking, or the exercise of a profession or vocation. The rule is settled that
joint ventures are governed by the law on partnerships which are, in turn, based on mutual agency
or delectus personae.
3.
No. It is evident that the transfer by a partner of his partnership interest does not make the
assignee of such interest a partner of the firm, nor entitle the assignee to interfere in the management of
the partnership business or to receive anything except the assignees profits. The assignment does not
purport to transfer an interest in the partnership, but only a future contingent right to a portion of the
ultimate residue as the assignor may become entitled to receive by virtue of his proportionate interest in
the capital. Since a partners interest in the partnership includes his share in the profits, we find that the
CA committed no reversible error in ruling that the Spouses Jaso are entitled to Biondos share in the
profits, despite Juanitas lack of consent to the assignment of said Frenchmans interest in the joint
venture. Although Eden did not, moreover, become a partner as a consequence of the assignment
and/or acquire the right to require an accounting of the partnership business, the CA correctly granted

her prayer for dissolution of the joint venture conformably with the right granted to the purchaser of a
partners interest under Article 1831 of the Civil Code.