Agad vs Mabato GR No.

L-24193 June 28, 1968

FACTS:

1.) Plaintiff Mauricio Agad alleged that he and Defendant SeverinoMabato are partners in a

fishpond business, to the capital of which Agad contributed P1000 with the right to receive

50% of profits;

2.) that from 1952up to and including 1956, Mabato who handled the partnership funds, had

yearly rendered accounts of the operations of the partnership;

3.)that despite reapeated demands Mabato had failed and refused to render accounts for

the years 1957 up to 1963.

4.) Agad prayed that judgment be rendered sentencing Mabato to pay him the sum of

P14,000 as his share in the profits of the partnership for the period from 1957 to 1963.

5.) In his Answer, MAbato admitted the formal allegations of the complaint and denied the

existence of said partnership on the ground that the contract therefor had not been perfected

because Agad had allegedly failed to give his P1000 contribution to the partnership capital.

6.) Mabato filed a motion to dismiss, upon the ground that the complaint states no cause of

action and that the lower court had no jurisdiction over the subject matter of the case,

because it involves principally the determination of rights over public lands. After due

hearing, the court issued the order appealed from, granting the motion to dismiss the

complaint for failure to state a cause of action

RTC Ruling

The complaint was subsequently dismissed upon the theory that the contract of partnership is null
and void pursuant to Art. 1773,CC because an inventory referred to had not been attached
thereto.

Art. 1771. A partnership may be constituted in any form, except where immovable property or real
rights are contributed thereto, in which case a public instrument shall be necessary.

Art. 1773. A contract of partnership is void, whenever immovable property is contributed thereto,
if inventory of said property is not made, signed by the parties; and attached to the public
instrument.
Thus, Agad brought the matter for review by record on appeal.

ISSUE

WON immovable property or real rights have been contributed to the partnership under
consideration.

Ruling: No.

None of the partners contributed either a fishpond or a real right to any fishpond. Their
contributions were limited to the sum of P1000 each. Par. 4 of Annex A provides:

that the capital of said partnership is two thousand (P2000) pesos od which one thousand
(P1000) has been contributed by Severino Mabato and one thousand (P1000) has been
contributed by Mauricio Agad.

SC HELD

The operation of the fishpond mentioned in Annex A was the purpose of the partnership. Neither
said fishpond or real right thereto was contributed to the partnership or became part of the capital
thereof, even if a fishpond or a real right thereto could become part of its assets.

Art. 1773, CC is not in point in this case.

G.R. No. 101847 May 27, 1993 LOURDES NAVARRO AND MENARDO NAVARRO,
petitioners, vs. COURT OF APPEALS, JUDGE BETHEL KATALBAS-MOSCARDON, Presiding
Judge, Regional Trial Court of Bacolod City, Branch 52, Sixth Judicial Region and Spouses
OLIVIA V. YANSON AND RICARDO B. YANSON,respondents.

G.R. No. 101847 May 27, 1993

LOURDES NAVARRO AND MENARDO NAVARRO, petitioners, vs.COURT OF APPEALS,

FACTS:

1.) Private respondent Olivia V. Yanson and Petitioner Lourdes Navarro were engaged in
the business of Air Freight Service Agency.
2.) Pursuant to the Agreement which they entered, they agreed to operate the said Agency;
3.) It is the Private Respondent Olivia Yanson who supplies the necessary equipment and
money used in the operation of the agency.
 4.) Her brother in the person of Atty. Rodolfo Villaflores was the manager thereof while
petitioner Lourdes Navarro was the Cashier;
5.) In compliance to her obligation as stated in their agreement, private respondent brought
into their business certain chattels or movables or personal properties.
6.) However, those personal properties remain to be registered in her name;
7.) Among the provisions stipulated in their agreement is the equal sharing of whatever
proceeds realized from their business;
8.) However, sometime on July 23, 1976, private respondent Olivia V. Yanson, in order for
her to recovery the above mentioned personal properties which she brought into their
business, filed a complaint against petitioner Lourdes Navarro for "Delivery of Personal
Properties With Damages and with an application for a writ of replevin.

RTC
9.) RTC) On July 27, 1976, then Executive Judge Oscar R. Victoriano (later to be promoted and
to retire as Presiding Justice of the Court of Appeals) approved private respondents'
application for a writ of replevin.
10. )For her defense, petitioner Navarro argue that she and private respondent Yanson
actually formed a verbal partnership which was engaged in the business of Air Freight
Service Agency. She contended that the decision sustaining the writ of replevin is void since
the properties belonging to the partnership do not actually belong to any of the parties until
the final disposition and winding up of the partnership.

CA

11.) On June 26, 1991, petitioners filed with respondent court a petition for annulment of the trial
court's decision, claiming that the trial judge erred in declaring the non-existence of a partnership,
contrary to the evidence on record.

12.)The appellate court, as aforesaid, out rightly dismissed the petition due to absence of extrinsic or
collateral fraud, observing further that an appeal was the proper remedy.

Supreme Court

13.)

Petitioners claim that the trial judge ignored evidence that would show that the parties "clearly
intended to form, and (in fact) actually formed a verbal partnership engaged in the business of Air
Freight Service Agency in Bacolod"; and that the decision sustaining the writ of replevin is void since
the properties belonging to the partnership do not actually belong to any of the parties until the final
disposition and winding up of the partnership

ISSUE:

1. Whether or not there was a partnership that existed between the parties.

2. Whether the properties that were commonly used in the operation of Allied Air Freight
belonged to the alleged partnership business.
RULING:

Article 1767 of the New Civil Code defines the contract of partnership: Art. 1767. 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 proceeds among themselves.

A cursory examination of the evidences presented no proof that a partnership, whether oral or
written had been constituted.

In fact, those movables brought by the plaintiff for the use in the operation of the business
remain registered in her name.

While there may have been co-ownership or co-possession of some items and/or any sharing
of proceeds by way of advances received by both plaintiff and the defendant, these are not
indicative and supportive of the existence of any partnership between them. Art. 1769 par. 2
provides:

Co-ownership or co-possession does not of itself establish a partnership, whether such co-
owners or co-possessors do or do not share any profits made by the use of the property
Besides, the alleged profit was a difference found after valuating the assets and not arising from
the real operation of the business. In accounting procedures, strictly, this could not be profit but
a net worth.

G.R. No. 134559 December 9, 1999

ANTONIA TORRES assisted by her husband, ANGELO TORRES; and EMETERIA

BARING, petitioners,
vs.
COURT OF APPEALS and MANUEL TORRES, respondents.

1.)In 1969, sisters Antonia Torres and Emeteria Baring entered into a joint venture agreement
with Manuel Torres.

2.)Under the agreement, the sisters agreed to execute a deed of sale in favor Manuel over a
parcel of land,
3.) the sisters received no cash payment from Manuel but the promise of profits (60% for the
sisters and 40% for Manuel) said parcel of land is to be developed as a subdivision.

4.)Manuel then had the title of the land transferred in his name and he subsequently mortgaged
the property.

5.) He used the proceeds from the mortgage to start building roads, curbs and gutters.

6.) Manuel also contracted an engineering firm for the building of housing units. But due to
adverse claims in the land, prospective buyers were scared off and the subdivision project
eventually failed.

7.) petitioners filed a criminal case for estafa against respondent and his wife, who were however
acquitted.

8.) The sisters then filed a civil case against Manuel for damages equivalent to 60% of the value
of the property, which according to the sisters, is whats due them as per the contract.
Petitioners deny having formed a partnership with respondent. They contend that the Joint Venture
Agreement and the earlier Deed of Sale, both of which were the bases of the appellate court's
finding of a partnership, were void.

RTC Ruling

The lower court ruled in favor of Manuel and the Court of Appeals affirmed the CA

In affirming the trial court, the Court of Appeals held that petitioners and respondent had formed a
partnership for the development of the subdivision. Thus, they must bear the loss suffered by the
partnership in the same proportion as their share in the profits stipulated in the contract. Disagreeing
with the trial court's pronouncement that losses as well as profits in a joint venture should be
distributed equally

The sisters , petitioners then appealed before the Supreme Court where they argued that there
is no partnership between them and Manuel because the joint venture agreement is void.

ISSUE: Whether or not there exists a partnership.

The Petition is bereft of merit, and denied for damages.

HELD: Yes. The joint venture agreement the sisters entered into with Manuel is a partnership
agreement whereby they agreed to contribute property (their land) which was to be developed
as a subdivision.

While on the other hand, though Manuel did not contribute capital, he is an industrial partner for
his contribution for general expenses and other costs.
Furthermore, the income from the said project would be divided according to the stipulated
percentage (60-40).

Clearly, the contract manifested the intention of the parties to form a partnership. Further still,
the sisters cannot invoke their right to the 60% value of the property and at the same time deny
the same contract which entitles them to it.

A reading of the terms embodied in the Agreement indubitably shows the existence of a partnership
pursuant to Article 1767 of the Civil Code, which provides:

Art. 1767. 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.

Under the above-quoted Agreement, petitioners would contribute property to the partnership in the
form of land which was to be developed into a subdivision; while respondent would give, in addition
to his industry, the amount needed for general expenses and other costs. Furthermore, the income
from the said project would be divided according to the stipulated percentage. Clearly, the contract
manifested the intention of the parties to form a partnership

Liability of the Parties

Claiming that respondent was solely responsible for the failure of the subdivision project, petitioners
maintain that he should be made to pay damages equivalent to 60 percent of the value of the
property, which was their share in the profits under the Joint Venture Agreement.

At any rate, the failure of the partnership cannot be blamed on the sisters, nor can it be blamed
to Manuel (the sisters on their appeal did not show evidence as to Manuels fault in the failure of
the partnership). The sisters must then bear their loss (which is 60%). Manuel does not bear the
loss of the other 40% because as an industrial partner he is exempt from losses.

WHEREFORE, the Perition is hereby DENIED and the challenged Decision AFFIRMED. Costs
against petitioners.

SO ORDERED