Angeles vs Secretary of Justice

G.R. No. 142612. July 29, 2005

Facts:
 In November 1996, the Angeles spouses filed a criminal complaint for Estafa against Mercado
 In November 1992, Mercado convinced the Angeles Spouses to enter into a contract of antichresis.
 It contracts covers 8 parcels of land planted with fruit-bearing lanzones trees located in Nagcarlan,
Laguna owned by Juana Suazo.
 The contract of antichresis was to last for 5 years with P210,000 as consideration.
 The parties agree that Marcado will administer since the Angeles spouses stays in Manila and only goes
to Laguna only on weekend.
 After 3 years, when the Angeles spouse asked for an accounting from Mercado, Marcado explained
that the subject and earned P46,210 in 1993 was used to buy lanzones tress.
 In 1994, Mercado reported that the trees bore no fruit.
 In 1995, Marcado gave no accounting.
 Later, the spouses learned that the contract entered, Mercado used his name together with his spouse
to perfect the contract.
 Mercado denied the allegation of the spouses.
 Mercado claimed that there exists an industrial partnership between him and the spouses.
 The industrial partnership had existed since 1991 before the contract of antichresis over the subject
land.
 Mercado claimed he used his earnings as part of the capital because the Angeles spouses didn’t want
to be identified as the financers.
 The Prosecution recommended that filing of estafa against Mercado.
 On Appeal, the Sec. of Justice reversed the decision of prosecutor and ruled otherwise.
 The Secretary posit that the spouses failed to show sufficient proof that Mercado deliberately deceived
them in the transaction.
 The secretary is also convinced that a partnership truly existed between the spouses and Mercado.
Issue:
 Whether there was partnership existed between Mercado and the Angeles spouses
Held:
 The court held it affirmatively.
 The Angeles spouses’ position that there is no partnership because of the lack of a public instrument
indicating the same and a lack of registration with the SEC which holds no water.
 Mere failure to register the contract of partnership with the SEC doesn’t invalidate a contract that has
the essential requisite of a partnership.
 The purpose of registration of the contract of partnership is to give notice to 3 rd parties.
 Failure to register the contract of partnership doesn’t affect the liability of the partnership and of the
partners to 3rd persons.
 Neither does such failure to register affect the partnership’s juridical personality
 A partnership may exist even if the partners don’t use the words “partner” or “partnership”