5. Angeles v. Secretary of Justice (MEOW) a.
Angeles to enter into a 5-year
29 July 2005 | Carpio, J. | Form required for partnership
PETITIONER: Oscar Angeles, Emerita Angeles
RESPONDENTS: Secretary of Justice, Felino Mercado
SUMMARY:
Sps. Angeles filed an estafa complaint against Mercado, who administers the land
subject of a contract of antichresis. The Sps. claim that Mercado swindled them in
placing the antichresis contract in Mercado and his wife’s names. On the other
hand, Mercado claims that there was an industrial partnership between him and
his spouse and that the Sps. Angeles were financiers before the execution of the
contract of antichresis. Mercado allegedly used his name in the transactions
because Sps. Angeles did not want to be identified as financiers. The prosecution
first recommended the filing of an information but recommended for the dismissal
in its amended version. The SOJ resolved to dismiss the complaint as well.
The issue is W/N there was a partnership between Mercado and Sps. Angeles
despite there being no document evidencing the same. The SC ruled that the lack
of a public instrument indicating partnership and a lack of registration with the
SEC does not mean that there is no partnership. The purpose of registration of the
contract of partnership is to give notice to third parties. As between the partners,
it is enough that it be shown that (a) there was contribution of money or industry
to a common fund and (b) division of profits.
DOCTRINE:
Mere failure to register the contract of partnership with the SEC does not
invalidate a contract that has the essential requisites of a partnership
FACTS:
1. Angeles spouses filed a criminal complaint for estafa against Mercado,
the brother-in-law of the Angeles spouses.
2. According to Sps. Angeles:
Mercado convinced the Sps.
contract of antichresis (“sanglaang-perde”) covering eight
parcels of land planted with fruit-bearing lanzones trees located
in Laguna and owned by Juana Suazo. It was agreed that Mercado
would administer the land and complete the necessary
paperwork.
b. After 3 years, the Sps. Angeles asked for an accounting from
Mercado. Mercado explained that the subject land earned
P46,210 in 1993, which he used to buy more lanzones trees.
Mercado also reported that the trees bore no fruit in 1994.
Mercado gave no accounting for 1995. The Angeles spouses
claim that only after this demand for an accounting did they
discover that Mercado had put the contract of sanglaang-perde
over the subject land under Mercado and his spouse’s names.
3. According to Mercado:
a. There was an industrial partnership, (“sosyo industrial”) between
him and his spouse as industrial partners and the Angeles spouses
as the financiers since 1991 before the contract of antichresis over
the subject land.
b. It was their practice to enter into business transactions with other
people under the name of Mercado because the Angeles spouses
did not want to be identified as the financiers.
c. Mercado attached bank receipts showing deposits in behalf of
Emerita Angeles and contracts under his name for the Sps.
Angeles and the minutes of the barangay conciliation
proceedings, where Oscar Angeles stated that there was a written
sosyo industrial agreement: capital would come from the Angeles
spouses while the profit would be divided evenly between
Mercado and the Angeles spouses.
4. Prosecution’s Resolution
a. First resolution recommended filing of the information
b. Amended resolution after Mercado filed his counter-affidavit
recommended dismissal of the complaint.
5. SOJ resolution: dismiss appeal
 a. Angeles spouses failed to show sufficient proof that Mercado
deliberately deceived them in the sanglaang perde transaction.
The document alone, which was in the name of Mercado and his
spouse does not show deceit or false representation on the part of
Mercado that induced the Sps. Angeles to part with their money.
b. Mercado satisfactorily explained that Sps. Angeles do not want
to be revealed as the financiers. It is difficult to believe that the
Sps. Angeles would readily part with their money without
holding on to some document to evidence the receipt of money,
or at least to inspect the document involved in the said
transaction.
c. A partnership truly existed between the 2 parties which is clear
from the fact that they contributed money to a common fund and
divided the profits among themselves. Mercado was able to make
deposits for the account of Sps. Angeles. These deposits
represented their share in the profits of their business venture.
6. Before the Supreme Court, Sps. Angeles argue that they had no partnership
with Mercado.
ISSUES:
1. [Main] W/N a partnership existed between Mercado and Sps. Angeles
– YES
2. W/N there was a misappropriation - NO
RULING: WHEREFORE, we AFFIRM the decision of the Secretary of Justice.
The present petition for certiorari is DISMISSED.
RATIO:
[Main] W/N a partnership existed between Mercado and Sps. Angeles – YES
1. Lack of a public instrument indicating partnership and a lack of
registration with the Securities and Exchange Commission (SEC) does not
mean that there is no partnership.
2. The following facts evince the existence of a partnership:
a. Angeles spouses contributed money to the partnership and not
immovable property.
b. Mere failure to register the contract of partnership with the SEC
does not invalidate a contract that has the essential requisites of a
partnership.
3. The purpose of registration of the contract of partnership is to give notice
to third parties. Failure to register the contract of partnership does
not affect the liability of the partnership and of the partners to third
persons. Neither does such failure to register affect the partnerships
juridical personality. A partnership may exist even if the partners do not
use the words partner or partnership.
4. Indeed, the Angeles spouses admit to facts that prove the existence of a
partnership:
a. a contract showing a sosyo industrial or industrial partnership,
contribution of money and industry to a common fund, and
b. division of profits between the Angeles spouses and Mercado
W/N there was a misappropriation - NO
1. The document alone does not show deceit or false representation by
Mercado that induced Sps. Angeles to part with their money. Mercado
satisfactorily explained that Sps. Angeles did not want to be revealed as
financiers.
2. (Why did they decide not to reveal Sps. Angeles as financiers?) Scared sila
baka ma-kidnap ng NPA or ma-question ng BIR yung business deals, or
worse ma-sequester yung assets nila.
SEPARATE OPINIONS: None.