Sie sind auf Seite 1von 8

FERNANDO SANTOS, Petitioner, v. Spouses ARSENIO and NIEVES REYES, Respondents.

Facts: In June 1986, Fernando Santos, Nieves Reyes and Melton Zabat orally agreed to form a partnership – a lending business.
Santos contributed 70% (as financier) while Reyes and Zabat shared 30% (as industrial partners). Later, Reyes introduced Cesar
Gragera whom they would provide loans to Gragera’s corporation particularly its employees. In return Gragera shall have a
commission based on the loan payments. The partnersdecided on August 1986 to have a written agreement but they found out that
Zabat engaged in a competitor venture thus expelled him. The two had Arsenio Reyes (husband of Nieves) replaced Zabat.
However, Santos accused the Spouses of not remitting the loans payments. He arguedthat the couple were only his employees and
there was a special arrangement between him and Gragera. The trial court and the Court of Appeals ruled against Santos.

Issue: Whether or not there was a partnership formed between Santos and the Spouses Reyes?

Held: YES. The original partnership with Zabat continued even after the expulsion of the latter from the partnership because there
was no intent to dissolve the (partnership) relationship. ” [Respondents] were industrial partners of [petitioner]. . . . Nieves herself
provided the initiative in the lending activities with Monte Maria. In consonance with the agreement between appellant, Nieves
and Zabat (later replaced by Arsenio), [respondents] contributed industry to the common fund with the intention of sharing in the
profits of the partnership. [Respondents] provided services without which the partnership would not have [had] the wherewithal to
carry on the purpose for which it was organized and as such [were] considered industrial partners (Evangelista v. Abad Santos, 51
SCRA 416 [1973]). “While concededly, the partnership between [petitioner,] Nieves and Zabat was technically dissolved by the
expulsion of Zabat therefrom, the remaining partners simply continued the business of the partnership without undergoing the
procedure relative to dissolution. Instead, they invited Arsenio to participate as a partner in their operations. There was therefore,
no intent to dissolve the earlier partnership. The partnership between [petitioner,] Nieves and Arsenio simply took over and
continued the business of the former partnership with Zabat, one of the incidents of which was the lending operations with Monte

G.R. No. 126881 October 3, 2000 HEIRS OF TAN ENG KEE, petitioners, vs. COURT OF APPEALS and BENGUET
LUMBER COMPANY, represented by its President TAN ENG LAY,respondents.

FACTS: After the second World War, Tan EngKee and Tan Eng Lay, pooling their resources and industry together,
enteredintoapartnershipengagedinthebusinessofsellinglumberandhardwareandconstruction supplies. They named their enterprise
"Benguet Lumber" which they jointly managed until Tan EngKee's death. Petitioners herein averred that the business prospered
due to the hard work and thrift of the alleged partners. However, they claimed that in 1981, Tan Eng Lay and his children caused
the conversion of the partnership"BenguetLumber"intoacorporationcalled"BenguetLumberCompany."Theincorporation was
purportedly a ruse to deprive Tan EngKee and his heirs of their rightful participation in the profits of the business. Petitioners
prayed for accounting of the partnership assets, and the dissolution, winding up and liquidation thereof, and the equal division of
the net assets of Benguet Lumber. The RTC ruled in favor of petitioners, declaring that Benguet Lumber is a joint venture which is
akin to a particular partnership. The Court of Appeals rendered the assailed decision reversing the judgment of the trial court.

ISSUE: Whether the deceased Tan EngKee and Tan Eng Lay are joint adventurers and/or partners in a
businessventureand/orparticularpartnershipcalledBenguetLumberandassuchshouldshareinthe profits and/or losses of the business
venture or particular partnership

RULING: Therewasnopartnershipwhatsoever.Exceptforafirmname,therewasnofirmaccount,nofirm letterheads submitted as

evidence, no certificate of partnership, no agreement as to profits and losses, and
notimefixedforthedurationofthepartnership.Therewasevennoattempttosubmitanaccounting corresponding to the period after the
war untilKee'sdeathin1984.Ithad no business book, no written account nor any memorandum for that matter and no license
mentioning the existence of a partnership. Also, the trial court determined that Tan EngKee and Tan Eng Lay had entered into a
joint venture, which it said is akin to a particular partnership. A particular partnership is distinguished from a joint adventure, to
wit:(a) A joint adventure (an American concept similar to our joint accounts) is a sort of informal partnership, with no firm name
and no legal personality.Inajointaccount,theparticipatingmerchantscantransact business under their own name, and can be
individually liable there for. (b) Usually, but not necessarily a joint adventure is limited to a SINGLE TRANSACTION, although
the business of pursuing to a successful termination may continue for a number of years; a partnership generally relates to a
continuing business of various transactions of a certain kind. A joint venture "presupposes generally a parity of standing between
the joint co-ventures or partners, in which each party has an equal proprietary interest in the capital or property contributed, and
where each party exercises equal rights in the conduct of the business. The evidence presented by petitioners falls short of the
quantum of proof required to establish a partnership. In the absence of evidence, we cannot accept as an established fact that Tan
EngKee allegedly contributed his resources to a common fund for the purpose of establishing a partnership. Besides, it is indeed
odd, if not unnatural, that despite the forty years the partnership was allegedly in existence, Tan EngKee never asked for an
accounting. The essence of a partnership is that the partners share in the profits and losses
.Eachhastherighttodemandanaccountingaslongasthepartnershipexists.Ademandforperiodic accounting is evidence of a partnership.
During his lifetime, Tan EngKee appeared never to have made any such demand for accounting from his brother, Tang Eng Lay.
We conclude that Tan EngKee was only an employee, not a partner since they did not present and offer evidence that would show
that Tan EngKee received amounts of money allegedly representing his share in the profits of the enterprise. There being no
partnership, it follows that there is no dissolution, winding up or liquidation to speak of.

Filomeno Negado, Narciso Rocha, and Juan Guirindola vs Gonzalo Makabenta 54 OG 408228 February 1958

Facts: Plaintiffsfiledasuitagainstthedefendantfortherecoveryofpossessionand management of Liberty Theater located in Leyte and

for an accounting of all money and property pertaining thereto. The plaintiffs allege that the theater is owned and operated by a
partnership known as Hemarogui Company composed of the plaintiffs and defendant. Conversely, the defendant alleges that he is
the sole and exclusive owner of the theater while the plaintiffs are merely creditor. The trial court held that no partnership exists
and the oral and material evidence (books, accounts, and papers) presented by the plaintiffs are incompetent to establish existence
of the partnership.

Issue: Whether or not a partnership exists among Negado, Rocha, Guirindola and Makabenta

Decision: There exists a partnership. In determining whether or not a particular transaction constitutes partnership, the intention as
disclosed by the entire transaction, and as gathered from the facts and from the language employed by the parties as well as their
conduct.Apartnershipmaybecreatedwithoutanydefiniteintentiontocreateit, the intention of the parties being inferred from their
conduct and dealings with each other. For the purpose of showing the existence of a partnership, books, papers, accounts and
similar writings are admissible as evidence provided that the party against whom they are offered is shown to have authorized or
ratified them .


Facts: Yang Chiao Seng proposed to form a partnership with Rosario Yulo to run and operate a theatre on the premises occupied
by Cine Oro, Plaza Sta. Cruz, Manila, the principal conditions of the offer being (1) Yang guarantees Yulo a monthly participation
of P3,000 (2) partnership shall be for a period of 2 years and 6 months with the condition that if the land is expropriated, rendered
impracticable for business, owner constructs a permanent building, then Yulo’s right to lease and partnership even if period agreed
upon has not yet expired; (3) Yulo is authorized to personally conduct business in the lobby of the building; and (4) after Dec 31,
1947, all improvements placed by partnership shall belong to Yulo but if partnership is terminated before lapse of 1 and ½ years,
Yang shall have right to remove improvements. Parties established, “Yang and Co. Ltd.”, to exist from July 1, 1945 – Dec 31,
1947. In June 1946, they executed a supplementary agreement extending the partnership for 3 years beginning Jan 1, 1948 to Dec
31, 1950. The land on which the theater was constructed was leased by Yulo from owners, Emilia Carrion and Maria Carrion
Santa Marina for an indefinite period but that after 1 year, such lease may be cancelled by either party upon 90-day notice. In Apr
1949, the owners notified Yulo of their desire to cancel the lease contract come July. Yulo and husband brought a civil action to
declare the lease for a indefinite period. Owners brought their own civil action for ejectment upon Yulo and Yang. CFI: Two cases
were heard jointly; Complaint of Yulo and Yang dismissed declaring contract of lease terminated. CA: Affirmed the judgment. In
1950, Yulo demanded from Yang her share in the profits of the business. Yang answered saying he had to suspend payment
because of pending ejectment suit. Yulo filed present action in 1954, alleging the existence of a partnership between them and that
Yang has refused to pay her shares. Defendant’s Position: The real agreement between plaintiff and defendant was one of lease
and not of partnership; that the partnership was adopted as a subterfuge to get around the prohibition contained in the contract of
lease between the owners and the plaintiff against the sublease of the property. Trial Court: Dismissal. It is not true that a
partnership was created between them because defendant has not actually contributed the sum mentioned in the Articles of
Partnership or any other amount. The agreement is a lease because plaintiff didn’t share either in the profits or in the losses of the
business as required by Art 1769 (CC) and because plaintiff was granted a “guaranteed participation” in the profits belies the
supposed existence of a partnership.

Issue: Was the agreement a contract a lease or a partnership?

Ruling: Dismissal. The agreement was a sublease not a partnership. The following are the requisites of partnership: (1) two or
more persons who bind themselves to contribute money, property or industry to a common fund; (2) the intention on the part of
the partners to divide the profits among themselves (Article 1761, CC) Plaintiff did not furnish the supposed P20,000 capital nor
did she furnish any help or intervention in the management of the theatre. Neither has she demanded from defendant any
accounting of the expenses and earnings of the business. She was absolutely silent with respect to any of the acts that a partner
should have done; all she did was to receive her share of P3,000 a month which cannot be interpreted in any manner than a
payment for the use of premises which she had leased from the owners.

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.



Private respondent Nenita A. Anay met petitioner William T. Belo, then the vice-president for operations of Ultra Clean
Water Purifier, through her former employer in Bangkok. Belo introduced Anay to petitioner Marjorie Tocao, who conveyed her
desire to enter into a joint venture with her for the importation and local distribution of kitchen cookwares

Under the joint venture, Belo acted as capitalist, Tocao as president and general manager, and Anay as head of the
marketing department and later, vice-president for sales

The parties agreed that Belo's name should not appear in any documents relating to their transactions with West Bend Company.
Anay having secured the distributorship of cookware products from the West Bend Company and organized the administrative
staff and the sales force, the cookware business took off successfully. They operated under the name of Geminesse Enterprise, a
sole proprietorship registered in Marjorie Tocao's name.

The parties agreed further that Anay would be entitled to:

(1) ten percent (10%) of the annual net profits of the business;
(2) overriding commission of six percent (6%) of the overall weekly production;
(3) thirty percent (30%) of the sales she would make; and
(4) two percent (2%) for her demonstration services. The agreement was not reduced to writing on the strength of Belo's
assurances that he was sincere, dependable and honest when it came to financial commitments.

On October 9, 1987, Anay learned that Marjorie Tocao had signed a letter addressed to the Cubao sales office to the
effect that she was no longer the vice-president of Geminesse Enterprise.

Anay attempted to contact Belo. She wrote him twice to demand her overriding commission for the period of January 8,
1988 to February 5, 1988 and the audit of the company to determine her share in the net profits.

Anay still received her five percent (5%) overriding commission up to December 1987. The following year, 1988, she did not
receive the same commission although the company netted a gross sales of P 13,300,360.00.

On April 5, 1988, Nenita A. Anay filed Civil Case No. 88-509, a complaint for sum of money with damages against
Marjorie D. Tocao and William Belo before the Regional Trial Court of Makati, Branch 140

The trial court held that there was indeed an "oral partnership agreement between the plaintiff and the defendants. The
Court of Appeals affirmed the lower court’s decision.

Whether the parties formed a partnership

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

Therefore, the parties formed a partnership.



National Investment and Development Corporation (NIDC) and Kawasaki Heavy Industries entered into a Joint Venture
Agreement in a shipyard business named PHILSECO, with a shareholding of 60-40 respectively. NIDC’s interest was later
transferred to the National Government.

Pursuant to President Aquino’s Proclamation No.5, which established the Committee on Privatization (COP) and Asset
Privatization Trust (APT), and allowed for the disposition of the government’s non-performing assets, the latter allowed Kawasaki
Heavy Industries to choose a company to which it has stockholdings, to top the winning bid of JG Summit Holdings over
PHILSECO. JG Summit protested alleging that such act would effectively increase Kawasaki’s interest in PHILSECO—a
shipyard is a public utility–and thus violative of the Constitution.

Whether or not respondents’ act is valid.

A shipyard such as PHILSECO being a public utility as provided by law, the following provision of the Article XII of the
Constitution applies:

“Sec. 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to
citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum
of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a
longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be
subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity
participation in public utilities by the general public. The participation of foreign investors in the governing body of any public
utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such
corporation or association shall be citizens of the Philippines.”

Notably, paragraph 1.4 of the JVA accorded the parties the right of first refusal “under the same terms.” This phrase implies that
when either party exercises the right of first refusal under paragraph 1.4, they can only do so to the extent allowed them by
paragraphs 1.2 and 1.3 of the JVA or under the proportion of 60%-40% of the shares of stock. Thus, should the NIDC opt to sell
its shares of stock to a third party, Kawasaki could only exercise its right of first refusal to the extent that its total shares of stock
would not exceed 40% of the entire shares of stock of SNS or PHILSECO. The NIDC, on the other hand, may purchase even
beyond 60% of the total shares. As a government corporation and necessarily a 100% Filipino-owned corporation, there is nothing
to prevent its purchase of stocks even beyond 60% of the capitalization as the Constitution clearly limits only foreign
Pacific Commercial vs. Aboitiz


In 1919, Arnaldo de Silva, Guillermo Aboitiz, Vidal Aboitiz and Jose Martinez formed a partnership. De Silva, Guillermo, and Vidal were the
capitalist partners while Martinez was the industrial partner. The articles of partnership contained, among others, that Martinez may also be liable
for losses but only to the extent of his shares in the profits which was at 30%.

The partnership incurred loans from Pacific Commercial Company which the partnership failed to pay. The partnership’s property was exhausted
but there remained an unpaid balance for which PCC sued the partnership. The trial court issued a judgment where it ordered that the deficiency
should be satisfied by the properties of the three capitalist partners; that in the event the properties of the three will not be enough, the remaining
balance shall issue against the property of Martinez. Martinez appealed the decision.

ISSUE: Whether or not Martinez is liable for the said debt.

HELD: Yes. As held in the case of La Compañia Maritama vs Francisco Muñoz et al, all the members of a general partnership are liable with
all their property for the results of the duly authorized transactions made in the name and for the account of the partnership. All the members of
the general copartnership, be they or be they not managing partners of the same are liable personally and in solidum with all their property for
the results of the transaction made in the name and for the account of the partnership.

The Supreme Court also emphasized that liability for losses relates merely to the distribution of losses among the partners themselves in the
settlement of the partnership affairs and has no reference to partnership obligations or liabilities to third parties.

NOTE: An industrial partner is not liable for losses. A provision exempting an industrial partner from losses is naturally valid but the same
provision exempting a capitalist partner is void. A provision making an industrial partner liable for losses is permissible. An industrial partner
may be held liable by third persons but he may recover from the capitalist partners for after all, he is not liable for losses.

Island Sales vs. United Pioneers

FACTS: United Pioneers General Construction Company is a general partnership formed by Benjamin Daco, Daniel Guizona, Noel Sim,
Augusto Palisoc and Romulo Lumauig. In 1961, United Pioneers purchased by installment a motor vehicle from Island Sales, Inc. United
Pioneers defaulted in its payment hence it was sued and the 5 partners were impleaded as co-defendants.

Upon motion of Island Sales, Lumauig was removed as a defendant.

United Pioneers lost the civil case and the trial court rendered judgment ordering United Pioneers to pay the outstanding balance plus interest
and costs. It further decreed that the remaining 4 co-defendants shall pay Island Sales in case United Pioneers’ property will not be enough to
satisfy its indebtedness to Island Sales.

ISSUE: What is the extent of the liability of the partners considering that one partner was removed as a co-defendant on motion of Island Sales?

HELD: Their liability is pro-rata pursuant to Article 1816 of the Civil Code. But is should be noted that since there were 5 partners when the
purchase was made in behalf of the partnership, the liability of each partner should be 1/5 th (of the company’s obligation) each. The fact that the
complaint against Lumauig was dismissed, upon motion of the Island Sales, does not unmake Lumauig as a general partner in the company. In so
moving to dismiss the complaint, Island Sales merely condoned Lumauig’s individual liability to them.


Elmo Muñasque filed a complaint for payment of sum of money and damages against respondents Celestino Galan, Tropical Commercial, Co.,
Inc. (Tropical) and Ramon Pons, alleging that the petitioner entered into a contract with respondent Tropical through its Cebu Branch Manager
Pons for remodeling a portion of its building without exchanging or expecting any consideration from Galan although the latter was casually
named as partner in the contract; that by virtue of his having introduced the petitioner to the employing company (Tropical), Galan would
receive some kind of compensation in the form of some percentages or commission.

Tropical agreed to give petitioner the amount of P7,000.00 soon after the construction began and thereafter the amount of P6,000.00 every
fifteen (15) days during the construction to make a total sum of P25,000.00.
On January 9, 1967, Tropical and/or Pons delivered a check for P7,000.00 not to the plaintiff but to a stranger to the contract, Galan, who
succeeded in getting petitioner's indorsement on the same check persuading the latter that the same be deposited in a joint account.

On January 26, 1967, when the second check for P6,000.00 was due, petitioner refused to indorse said check presented to him by Galan but
through later manipulations, respondent Pons succeeded in changing the payee's name to Galan and Associates, thus enabling Galan to cash the
same at the Cebu Branch of the Philippine Commercial and Industrial Bank (PCIB) placing the petitioner in great financial difficulty in his
construction business and subjecting him to demands of creditors to pay for construction materials, the payment of which should have been made
from the P13,000.00 received by Galan.
Due to the unauthorized disbursement by respondents Tropical and Pons of the sum of P13,000.00 to Galan, petitioner demanded that said
amount be paid to him by respondents under the terms of the written contract between the petitioner and respondent company.

Whether there was a breach of trust when Tropical disbursed the money to Galan instead of Muñasque

HELD: No, there was no breach of trust when Tropical disbursed the money to Galan instead of Muñasque.

The Supreme Court held that there is nothing in the records to indicate that the partnership organized by the two men was not a genuine one. A
falling out or misunderstanding between the partners does not convert the partnership into a sham organization.

In the case at bar the respondent Tropical had every reason to believe that a partnership existed between the petitioner and Galan and no fault or
error can be imputed against it for making payments to "Galan and Associates" and delivering the same to Galan because as far as it was
concerned, Galan was a true partner with real authority to transact on behalf of the partnership with which it was dealing.

Appellants Benito Liwanag and Maria Liwanag Reyes are co-owners of Liwanag Auto Supply. A commercial guard who while in line of duty,
was killed by criminal hands. His widow and minor children, in due time filed a claim for compensation with the Workmen's Compensation
Commission, which ordered appellants to pay jointly and severally P3,494.40 to the claimants. Hence this appeal, arguing that there is nothing in
the compensation Act which provides that the obligation of an employer arising from compensable injury or death of an employee should be
solidary obligation,and that, in absence of such, the responsibility of appellants should not be solidary but merely joint.

Issue: whether or not the appellants should pay jointly the amount awarded to the widow and children ?

Ruling: Although the Workmen's Compensation Act does not contain any provision expressly declaring solidary obligation of business partners
like the herein appellants, there are other provisions of law from which it could be gathered that their liability must be solidary. Arts. 1711and
1712 of the new Civil Code provide:

ART. 1711. Owners of enterprises and other employers are obliged to pay compensation for the death of or injuries to their laborers, workmen,
mechanics or other employees, even though the event may have been purely accidental or entirely due to a fortuitous cause,if the death or
personal injury arose out of and in the course of the employment. . . . .

ART. 1712. If the death or injury is due to the negligence of a fellow-worker, the latter and the employer shall be solidarily liable for
compensation. . . . .And section 2 of the Workmen's Compensation Act, as amended reads in part as follows: . . . The right to compensation as
provided in this Act shall not be defeated or impaired on the ground that the death, injury or disease was due to the negligence of a fellow servant
or employee, without prejudice to the right of the employer to proceed against the negligence party. The provisions of the new Civil Code above
quoted taken together with those of Section 2 of the Workmen's Compensation Act, reasonably indicate that in compensation cases, the liability
of business partners, like appellants, should be solidary; otherwise, the right of the employee may be defeated, or at least crippled. If the
responsibility of appellants were to be merely joint and solidary, and one of them happens to be insolvent, the amount awarded to the appellees
would only be partially satisfied, which is evidently contrary to the intent and purposes of the Act.Moreover, Art. 1207 of the new Civil Code
provides:. . . . There is solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires
solidarity. Wherefore, award appealed from is affirmed.


FACTS: Sometime in 1958, private respondent Jaime Sahot[5] started working as a truck helper for petitioners’ family-owned trucking business
named Vicente Sy Trucking. In 1965, he became a truck driver of the same family business, renamed T. Paulino Trucking Service, later 6B’s
Trucking Corporation in 1985, and thereafter known as SBT Trucking Corporation since 1994. Throughout all these changes in names and for 36
years, private respondent continuously served the trucking business of petitioners. When Sahot was 59 years old, he incurred several absences
due to various ailments. Particularly causing him pain was his left thigh, which greatly affected the performance of his task as a driver. He
inquired about his medical and retirement benefits with the Social Security System (SSS) on April 25, 1994, but discovered that his premium
payments had not been remitted by his employer.Sahot filed a week-long leave to get medical attention. He was treated for EOR, presleyopia,
hypertensive retinopathy G II and heart enlargement. Because of such, Belen Paulino of the SBT Trucking Service management told him to file a
formal request for extension of his leave. When Sahot applied for an extended leave, he was threatened of termination of employment should he
refuse to go back to work. Eventually, Sahot was dismissed from employment which prompted the latter to file an illegal dismissal case with the
NLRC. For their part, petitioners admitted they had a trucking business in the 1950s but denied employing helpers and drivers. They contend
that private respondent was not illegally dismissed as a driver because he was in fact petitioner’s industrial partner. They add that it was not until
the year 1994, when SBT Trucking Corporation was established, and only then did respondent Sahot become an employee of the company, with
a monthly salary that reached P4,160.00 at the time of his separation. The NLRC and the CA ruled that Sahot was an employee of the petitioner.

ISSUE: Whether Sahot is an industrial partner


No. Article 1767 of the Civil Code states that in a 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. Not one of these circumstances is present in this case.
No written agreement exists to prove the partnership between the parties. Private respondent did not contribute money, property or industry for
the purpose of engaging in the supposed business. There is no proof that he was receiving a share in the profits as a matter of course, during the
period when the trucking business was under operation. Neither is there any proof that he had actively participated in the management,
administration and adoption of policies of the business. Thus, the NLRC and the CA did not err in reversing the finding of the Labor Arbiter that
private respondent was an industrial partner from 1958 to 1994. On this point, the Court affirmed the findings of the appellate court and the
NLRC. Private respondent Jaime Sahot was not an industrial partner but an employee of petitioners from 1958 to 1994. The existence of an
employer-employee relationship is ultimately a question of fact and the findings thereon by the NLRC, as affirmed by the Court of Appeals,
deserve not only respect but finality when supported by substantial evidence. Substantial evidence is such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.



Maglana and Rojas executed their Articles of Co-Partnership called Eastcoast Development Enterprises (EDE). It was a partnership with an
indefinite term of existence. Maglana shall manage the business affairs while Rojas shall be the logging superintendant and shall manage the
logging operation. They shall share in all profits and loss equally. Due to difficulties encountered they decided to avail of the sources of
Pahamatong as industrial partners. They again executed their Articles of Co-Partnership under EDE. The term is 30 years. After sometime
Pamahatong sold his interest to Maglana and Rojas including equipment contributed. After withdrawal of Pamahatong, Maglana and Rojas
continued the partnership. After 3 months, Rojas entered into a management contract with another logging enterprise. He left and abandoned the
partnership. He even withdrew his equipment from the partnership and was transferred to CMS. He never told Maglana that he will not be able
to comply with the promised contributions and he will not work as logging superintendent. Maglana then told Rojas that the latter share will just
be 20% of the net profits. Rojas took funds from the partnership more than his contribution. Thus, Maglana notified Rojas that he dissolved the

Issue: What is the nature of the partnership and legal relationship of Maglana and Rojas after Pahamatong retired from the second partnership


It was not the intention of the partners to dissolve the first partnership, upon the constitution of the second one, which they unmistakably called
“additional agreement.” Otherwise stated even during the existence of the second partnership, all business transactions were carried out under
the duly registered articles. No rights and obligations accrued in the name of the second partnership except in favor of Pahamatong which was
fully paid by the duly registered partnership.