EUFRACIO D. ROJAS, Plaintiff-Appellant, vs. CONSTANCIO B. MAGLANA, Defendant-Appellee.

G.R. No. 30616 | December 10, 1990 | PARAS, J.:

FACTS:
Maglana and Rojas executed their Articles of Co-partnership called Eastcoast DevelopmentEnterpises (EDE) which had
an indefinite term of existence and was registered with the SEC and had a Timber License. One of the EDEs purposes
was to apply or secure timber and/or private forest lands and to operate, develop and promote such forests rights and
concessions. Maglana shall manage the business affairs while Rojas shall be the logging superintendent. All profits and
losses shall be divided share and share alike between them.
Because of the difficulties encountered, the two availed the services of Agustin Pahamotang as industrial partner and
executed another articles of co-partnership with the latter. Aside from the slight difference in the purpose of the second
partnership which is to hold and secure renewal of timber license instead of to secure the license as in the first partnership
and the term of the second partnership was fixed to thirty (30) years and a conditional sale of interest in the partnership
wherein Maglana and Rojas agreed to purchase the interest, share and participation in the partnership of Pahamotang. It
was also agreed that after payment of such including amount of loan secured by Pahamotang in favor of the partnership,
the two shall become owners of all equipment contributed by Pahamotang. After this, the two continued the partnership
without any written agreement or reconstitution of their articles of partnership.
Rojas entered into a management contract with CMS Estate Inc and abandoned EDE. Rojas withdrew equipment which
were his supposed contribution to the first partnership and transferred these to CMS through chattel mortgage. In the
letter Maglana wrote Rojas regarding his contribution to the capital investments as well as his duties as logging
superintendent, he replied that he will not be able to comply with both. Maglana then told Rojas that the latters share will
just be 20% of the net profits. Such was the sharing from 1957 to 1959 without complaint or dispute. Rojas took funds
from the partnership more than his contribution. Maglana notified Rojas that he dissolved the partnership. Rojas filed an
action against Maglana for the recovery of properties and accounting of the partnership and damages.
The Court of First Instance of Davao submitted the following decisions:
1. The partnership of Maglana and Rojas after Pahamotang retired is one of de facto and at will; the sharing of
profits and losses is on the basis of actual contributions;
2. there is no evidence these properties were acquired by the partnership funds thus it should not belong to it;
3. neither is entitled to damages; the letter of Maglana in effect dissolved the partnership;
4. sale of forest concession is valid and binding and should be considered as Maglanas contribution;
5. Rojas must pay or turn over to the partnership the profits he received from CMS and pay his personal account to
the partnership;
6. Maglana must be paid 85k which he shouldve received but was not paid to him and must be considered as his
contribution
Rojas insists that the first partnership was not novated/superseded by the second, meaning, the first still governs as to the
sharing of profits.
ISSUE:
1. WON the partnership carried on after the second partnership was a de facto partnership and at will - NO
2. WON Magalana may unilaterally dissolve the partnership - YES
HELD:
The assailed decision of the Court of First Instance of Davao, Branch III, is hereby MODIFIED in the sense that
the duly registered partnership of Eastcoast Development Enterprises continued to exist until liquidated and that
the sharing basis of the partners should be on share and share alike as provided for in its Articles of Partnership,
in accordance with the computation of the commissioners. We also hereby AFFIRM the decision of the trial court
in all other respects
1. There was no intention to dissolve the first partnership upon the constitution of the second as everything else was
the same except for the fact that they took in an industrial partner andthey pursued the same purposes, the capital
contributions call for the same amounts, all subsequent renewals of Timber License were secured in favor of the
first partnership, all businesses were carried out under the registered articles. To all intents and purposes
therefore, the First Articles of Partnership were only amended, in the form of Supplementary Articles of CoPartnership.

On the other hand, there is no dispute that the second partnership was dissolved by common consent. Said
dissolution did not affect the first partnership which continued to exist. Significantly, Maglana and Rojas agreed to
purchase the interest, share and participation in the second partnership of Pahamotang and that thereafter, the
two became the owners of equipment contributed by Pahamotang. Maglana even reminded Rojas of his
obligation to contribute either in cash or in equipment, to the capital investment of the partnership as well as his
obligation to perform his duties as logging superintendent. This reminder cannot refer to any other but to the
provisions of the duly registered Articles of Co-Partnership.
The relationship of Rojas and Maglana after the withdrawal of Pahamotang can neither be considered as a De
Facto Partnership, nor a Partnership at Will, for as stressed, there is an existing partnership, duly registered.
2. As there are only two parties when Maglana notified Rojas that he dissolved the partnership, it is in effect a notice
of withdrawal.
Under Article 1830, par. 2 of the Civil Code, even if there is a specified term, one partner can cause its
dissolution by expressly withdrawing even before the expiration of the period, with or without justifiable
cause. Of course, if the cause is not justified or no cause was given, the withdrawing partner is liable for damages
but in no case can he be compelled to remain in the firm. With his withdrawal, the number of members is
decreased, hence, the dissolution. And in whatever way he may view the situation, the conclusion is inevitable
that Rojas and Maglana shall be guided in the liquidation of the partnership by the provisions of its duly registered
Articles of Co-Partnership; that is, all profits and losses of the partnership shall be divided "share and share alike"
between the partners.
But an accounting must first be made and which in fact was ordered by the trial court and accomplished by the
commissioners appointed for the purpose.
According to the Commissioners report, Rojas is not entitled to any profits as he failed to give the amount he had
undertaken to contribute thus, had become a debtor of the partnership. Maglana cannot be liable for damages as
Rojas abandoned the partnership thru his acts and also took funds in an amount more than his contribution

[G.R. No. 149844. October 13, 2004]

MIGUEL CUENCO, Substituted by MARIETTA C. CUYEGKENG, petitioner, vs. CONCEPCION CUENCO Vda. DE
MANGUERRA, respondent.
DECISION
PANGANIBAN, J.:
FACTS:
Concepcion filed the initiatory complaint herein for specific performance against her uncle Miguel Cuenco, later
substituted by petitioner. Concepcions father, the late Don Mariano Jesus Cuenco and Miguel Cuenco formed the
Cuenco and Cuenco Law Offices and served as lawyers in two (2) cases entitled Valeriano Solon versus Zoilo Solon
and Valeriano Solon versus Apolonia Solon involving a dispute among relatives over ownership of lot 903 of the Banilad
Estate. Records of said cases indicate the name of the Miguel alone as counsel of record, but in truth and in fact, the real
lawyer behind the success of said cases was the influential Don Mariano Jesus Cuenco who won and was awarded the
following as attorneys fees:
Lot 903-A: 5000 square meters (Don Mariano Jesus Cuencos attorneys fees)
Lot 903-B: 5000 square meters (Miguel Cuencos attorneys fees)
Lot 903-C: 54,000 square meters (Solons retention)
Mariano Cuenco was actively practicing law in Manila and entrusted Lot 903 A to Miguel had a title under his name and
was in under obligation to hold the title in trust for his brother Marianos children by first marriage. Lot 903-A was the
partitioned into six (6) sub-lots (Lots 903-A-1 to 903-A-6) to correspond to the six (6) children of Marianos first marriage
(Teresita, Manuel, Lourdes, Carmen, Consuelo, and Concepcion). Five deeds of donation were executed in favor of the
five children and left out Concepcion occupying Lot 903 A-6 and paid taxes for it who became the respondent of this case.
When Concepcion went to the Register of Deeds to register the Lot 903-A-6, there was an adverse claim by Miguel saying
that he was the absolute owner of said lot. Miguels alleged that he executed five deeds of donation to the five children of
his brother because of the love, care and gratitude they exhibited during his long sickness except for Concepcion. Miguel

died before he was able to submit himself to cross-examination so his testimony was stricken off the record, thus Marietta
Cuyegkeng (her only daughter) substituted him in the case.
Marietta then alleged that she is the owner of the lot as he purchased it from his father and that she was aware of the
case because her father used to commute to Cebu to attend hearings. The lower and appellate court ruled in favor of
Concepcion who has the legal right of ownership over lot 903-A-6. The CA further ruled that the subject land "is part of the
attorneys fees of Don Mariano Cuenco, predecessor-in-interest of Concepcion Cuenco vda. de Manguerra and Miguel
merely holds such property in trust for her.
ISSUE: Whether or not Concepcion is entitled to ownership of the property (Lot 903-A-6) notwithstanding the claims of
Miguel as the lone counsel on record of the case that awarded the said lot as attorneys fees.
HELD:
Given as attorneys fees was one hectare of Lot 903, of which two five-thousand square meter portions were
identified as Lot 903-A and Lot 903-B. That only Miguel handled Civil Case No. 9040 does not mean that he alone is
entitled to the attorneys fees in the said cases. "When a client employs the services of a law firm, he does not employ the
services of the lawyer who is assigned to personally handle the case. Rather, he employs the entire law firm." Being a
partner in the law firm, Mariano -- like Miguel -- was likewise entitled to a share in the attorneys fees from the firms
clients. The Court ruled that implied trust was present, implied trust are those that without being express, are deducible
from the nature of the transaction as matters of intent or which are super induced on the transaction by operation of law
as a matter of equity. A review of the record show that indeed there was an implied trust between the parties. The
circumstances surrounding the acquisition and the subsequent partial dispositions of this property eloquently speak of the
intent that the equitable or beneficial ownership of the property should belong to Mariano and his heirs.
Lot 903-A was one half of the one-hectare portion of Lot 903 given as attorneys fees by a client of the law firm of Partners
Miguel and Mariano Cuenco. Lot 903-A was one half of the one-hectare portion of Lot 903 given as attorneys fees by a
client of the law firm of Partners Miguel and Mariano Cuenco. Miguel readily surrendered his Certificate of Title and
interposed no objection to the subdivision and the allocation of the property to Marianos six children, including
Concepcion. In addition Marianos children, including Concepcion, were the ones who shouldered the expenses incurred
for the subdivision of the property. After the subdivision of the property, Marianos children -- including Concepcion -- took
possession of their respective portions thereof. The legal titles to five portions of the property were transferred via a
gratuitous deed of conveyance to Marianos five children, following the allocations specified in the subdivision plan
prepared for Lourdes Cuenco. Respondent is not barred by laches. In the present case, respondent has persistently
asserted her right to Lot 903-A-6 against petitioner.
MARJORIE TOCAO and WILLIAM T. BELO, petitioners, vs. COURT OF APPEALS and NENITA ANAY,respondents.
FACTS:
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 cook wares.
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 joint venture agreement was not reduced to writing because
Anay trusted Belos assurances. The venture succeeded under Anays marketing prowess.
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. Respondent then attempted to contact Belo and

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 from the company.
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.
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 courts decision.
ISSUE:
Whether or not there was a partnership formed between the parties, and if Anay was part of the partnership.
HELD:
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 business even though it was not reduced to writing, for a partnership can be instituted in any form. The fact that it
was registered as a sole proprietorship is of no moment for such registration was only for the companys trade name.
Anay was not even an employee because when they ventured into the agreement, they explicitly agreed to profit sharing
this is even though Anay was receiving commissions because this is only incidental to her efforts as a head marketer.
The Supreme Court also noted that a partner who is excluded wrongfully from a partnership is an innocent partner.
Hence, the guilty partner must give him his due upon the dissolution of the partnership as well as damages or share in the
profits realized from the appropriation of the partnership business and goodwill. An innocent partner thus possesses
pecuniary interest in every existing contract that was incomplete and in the trade name of the co-partnership and assets
at the time he was wrongfully expelled.
An unjustified dissolution by a partner can subject him to action for damages because by the mutual agency that arises in
a partnership, the doctrine of delectus personae allows the partners to have the power, although not necessarily the right
to dissolve the partnership.
Tocaos unilateral exclusion of Anay from the partnership is shown by her memo to the Cubao office plainly stating that
Anay was, as of October 9, 1987, no longer the vice-president for sales of Geminesse Enterprise. By that memo,
petitioner Tocao effected her own withdrawal from the partnership and considered herself as having ceased to be
associated with the partnership in the carrying on of the business. Nevertheless, the partnership was not terminated
thereby; it continues until the winding up of the business.
Therefore, Anay was part of the partnership.

G.R. No. L-40098 August 29, 1975

ANTONIO LIM TANHU, DY OCHAY, ALFONSO LEONARDO NG SUA and CO OYO, petitioners,
vs.
HON. JOSE R. RAMOLETE as Presiding Judge, Branch III, CFI, Cebu and TAN PUT, respondents.

DOCTRINE: Since Po Chuan was in control of the affairs of the partnership, the more logical inference is that if
defendants had obtained any portion of the funds of the partnership for themselves, it must have been with the knowledge
and consent of Po Chuan, for which reason no accounting could be demanded from them therefor, considering that Article
1807 of the Civil Code refers only to what is taken by a partner without the consent of the other partner or partners.
Even assuming there has not yet been any liquidation of the partnership, contrary to the allegation of the defendants, then
Glory Commercial Co. would have the status of a partnership in liquidation and the only right plaintiff could have would be
to what might result after such liquidation to belong to the deceased partner, and before this is finished, it is impossible to
determine, what rights or interests, if any, the deceased had. In other words, no specific amounts or properties may be
adjudicated to the heir or legal representative of the deceased partner without the liquidation being first terminated.
FACTS:
Private respondent Tan Put alleged that she is the widow of Tee Hoon Lim Po Chuan, who was a partner and
practically the owner who has controlling interest of Glory Commercial Company and a Chinese Citizen until his death.
Defendant Antonio Lim Tanhu and Alfonso Leonardo Ng Sua were partners of Po Chuan. Tan Put filed complaint against
spouses-petitoner Lim Tanhu and Dy Ochay including their son Tech Chuan and the other spouses-petitoner Ng Sua and
Co Oyo including also their son Eng Chong Leonardo, that through fraud and machination took actual and active
management of the partnership and that she alleged entitlement to share not only in the capital and profits of the
partnership but also in the other assets, both real and personal, acquired by the partnership with funds of the latter during
its lifetime." ( Basically, her allegations were that she actually gave some of her money to Po Chuan to help launch the
partnership business; that the assets of the business were never liquidated after her common-law-husbands death; that
the partners used the partnership funds to acquire several properties and to also launch the new business of Glory
Commercial Company, Inc. [as opposed to the older one which was Glory Commercial Company Partnership]; that she
was entitled to accounting and share in profits of the partnership as wife of Po Chuan; that she was fraudulently made to
sign a quitclaim for 25,000 pesos which she said she did not actually receive)
According to the petitioners, Ang Siok Tin is the legitimate wife, still living, and with whom Tee Hoon had four legitimate
children, a twin born in 1942, and two others born in 1949 and 1965, all presently residing in Hong Kong. Tee Hoon died in
1966 and as a result of which the partnership was dissolved and what corresponded to him were all given to his legitimate
wife and children.
Tan Put prior of her alleged marriage with Tee Hoon on 1949, was engaged in the drugstore business; that not long after
her marriage, upon the suggestion of the latter sold her drugstore for P125,000.00 which amount she gave to her husband
as investment in Glory Commercial Co. sometime in 1950; that after the investment of the above-stated amount in the
partnership its business flourished and it embarked in the import business and also engaged in the wholesale and retail
trade of cement and GI sheets and under huge profits.
Defendants interpose that Tan Put knew and was are that she was merely the common-law wife of Tee Hoon. Tan Put
and Tee Hoon were childless but the former had a foster child, Antonio Nunez. Defendants also said that the defendant
knew she was not entitled to the profits of the partnership but out of the goodness of their hearts, they gave her 25,000 as
evidenced by the quitclaim she signed.
ISSUES: Whether Tan Put, as she alleged being married with Tee Hoon, can claim from the company of the latters share.
HELD:
Under Article 55 of the Civil Code, the declaration of the contracting parties that they take each other as husband
and wife "shall be set forth in an instrument" signed by the parties as well as by their witnesses and the person
solemnizing the marriage. Accordingly, the primary evidence of a marriage must be an authentic copy of the marriage
contract. While a marriage may also be proved by other competent evidence, the absence of the contract must first be
satisfactorily explained. Surely, the certification of the person who allegedly solemnized a marriage is not admissible
evidence of such marriage unless proof of loss of the contract or of any other satisfactory reason for its non-production is
first presented to the court. In the case at bar, the purported certification issued by a Mons. Jose M. Recoleto, Bishop,
Philippine Independent Church, Cebu City, is not, therefore, competent evidence, there being absolutely no showing as to

unavailability of the marriage contract and, indeed, as to the authenticity of the signature of said certifier, the jurat
allegedly signed by a second assistant provincial fiscal not being authorized by law, since it is not part of the functions of
his office. Besides, inasmuch as the bishop did not testify, the same is hearsay.
An agreement with Tee Hoon was shown and signed by Tan Put that she received P40,000 for her subsistence when they
terminated their relationship of common-law marriage and promised not to interfere with each others affairs since they are
incompatible and not in the position to keep living together permanently. Hence, this document not only proves that her
relation was that of a common-law wife but had also settled property interests in the payment of P40,000.
We find no alternative but to hold that plaintiff Tan Put's allegation that she is the widow of Tee Hoon Lim Po Chuan has
not been satisfactorily established and that, on the contrary, the evidence on record convincingly shows that her relation
with said deceased was that of a common-law wife and furthermore, that all her claims against the company and its
surviving partners as well as those against the estate of the deceased have already been settled and paid.
If, as We have seen, plaintiff's evidence of her alleged status as legitimate wife of Po Chuan is not only unconvincing but
has been actually overcome by the more competent and weighty evidence in favor of the defendants, her attempt to
substantiate her main cause of action that defendants Lim Tanhu and Ng Sua have defrauded the partnership Glory
Commercial Co. and converted its properties to themselves is even more dismal. From the very evidence summarized by
His Honor in the decision in question, it is clear that not an iota of reliable proof exists of such alleged misdeeds.
If Po Chuan was in control of the affairs and the running of the partnership, how could the defendants have defrauded him
of such huge amounts as plaintiff had made his Honor believe? Upon the other hand, since Po Chuan was in control of
the affairs of the partnership, the more logical inference is that if defendants had obtained any portion of the funds of the
partnership for themselves, it must have been with the knowledge and consent of Po Chuan, for which reason no
accounting could be demanded from them therefor, considering that Article 1807 of the Civil Code refers only to what is
taken by a partner without the consent of the other partner or partners. Incidentally again, this theory about Po Chuan
having been actively managing the partnership up to his death is a substantial deviation from the allegation in the
amended complaint to the effect that "defendants Antonio Lim Tanhu, Alfonso Leonardo Ng Sua, Lim Teck Chuan and Eng
Chong Leonardo, through fraud and machination, took actual and active management of the partnership and although Tee
Hoon Lim Po Chuan was the manager of Glory Commercial Co., defendants managed to use the funds of the partnership
to purchase lands and buildings etc. (Par. 4, p. 2 of amended complaint, Annex B of petition) and should not have been
permitted to be proven by the hearing officer, who naturally did not know any better.
Moreover, it is very significant that according to the very tax declarations and land titles listed in the decision, most if not
all of the properties supposed to have been acquired by the defendants Lim Tanhu and Ng Sua with funds of the
partnership appear to have been transferred to their names only in 1969 or later, that is, long after the partnership had
been automatically dissolved as a result of the death of Po Chuan. Accordingly, defendants have no obligation to account
to anyone for such acquisitions in the absence of clear proof that they had violated the trust of Po Chuan during the
existence of the partnership.
Besides, assuming there has not yet been any liquidation of the partnership, contrary to the allegation of the defendants,
then Glory Commercial Co. would have the status of a partnership in liquidation and the only right plaintiff could have
would be to what might result after such liquidation to belong to the deceased partner, and before this is finished, it is
impossible to determine, what rights or interests, if any, the deceased had. In other words, no specific amounts or
properties may be adjudicated to the heir or legal representative of the deceased partner without the liquidation being first
terminated.
DISPOSITION: IN VIEW OF ALL THE FOREGOING, the petition is granted. All proceedings held in respondent court in its
Civil Case No. 12328 subsequent to the order of dismissal of October 21, 1974 are hereby annulled and set aside,
particularly the ex-parteproceedings against petitioners and the decision on December 20, 1974. Respondent court is
hereby ordered to enter an order extending the effects of its order of dismissal of the action dated October 21, 1974 to
herein petitioners Antonio Lim Tanhu, Dy Ochay, Alfonso Leonardo Ng Sua and Co Oyo. And respondent court is hereby
permanently enjoined from taking any further action in said civil case gave and except as herein indicated. Costs against
private respondent.

Gregorio Ortega, Tomas del Castillo, Jr. and Benjamin Bacorro v. CA, SEC and Joaquin Misa
G.R. No. 109248 July 3, 1995
Vitug, J.
Facts:
Ortega, then a senior partner in the law firm Bito, Misa, and Lozada withdrew in said firm who filed with SEC a petition for
dissolution and liquidation of partnership. SEC en banc ruled that withdrawal of Misa from the firm had dissolved the
partnership since it is partnership at will, the law firm could be dissolved by any partner at any time, such as by withdrawal
therefrom, regardless of good faith or bad faith, since no partner can be forced to continue in the partnership against his
will. SEC reversed the decision ruling that the withdrawal had in fact dissolved the partnership as a partnership at will, the
law firm can be dissolved by any partner at any time by his withdrawal regardless of good faith or bad faith. The case was
remanded to the Hearing Officer to determine rights and obligations of parties. On appeal Court of Appeals affirmed in toto
the SEC decision and that there is no need for the appointment of a receiver as no sufficient proof had been shown to
indicate that the partnership assets were in any such danger of being lost, removed or materially impaired.
Issue:
1. WON the partnership of Bito, Misa & Lozada (now Bito, Lozada, Ortega & Castillo) is a partnership at will; 2. WON the
withdrawal of Misa dissolved the partnership regardless of his good or bad faith;
Held:
1. Yes. The partnership agreement of the firm provides that he partnership shall continue so long as mutually satisfactory
and upon the death or legal incapacity of one of the partners, shall be continued by the surviving partners.
3. Yes. Any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will (e.g. by way
of withdrawal of a partner). 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 damage. In the case at bar, it was not done
out of bad faith as it was spurred by an interpersonal conflict among the partners.

G.R. No. L-27343 February 28, 1979

MANUEL G. SINGSONG, JOSE BELZUNCE, AGUSTIN E. TONSAY, JOSE L. ESPINOS, BACOLOD SOUTHERN
LUMBER YARD, and OPPEN, ESTEBAN, INC., plaintiffs-appellees,
vs.
ISABELA SAWMILL, MARGARITA G. SALDAJENO and her husband CECILIO SALDAJENO LEON GARIBAY,
TIMOTEO TUBUNGBANUA, and THE PROVINCIAL SHERIFF OF NEGROS OCCIDENTAL, defendants, MARGARITA
G. SALDAJENO and her husband CECILIO SALDAJENO, defendants-appellants.
FACTS:
Isabela Sawmill was formed by partners Saldajeno, Lon and Timoteo. Saldajeno withdrew from the partnership and after
dissolution, L and T continued the business still under the name Isabela Sawmill. The partnership is indebted to various
creditors and that Sheriff sold the assets of Isabela Sawmill to S and was subsequently sold to a separate company.
ISSUE:
Whether or not Isabela Sawmill ceased to be a partnership and that creditors could no longer demand payment.
HELD:
On dissolution, the partnership is not terminated but continues until the winding up of the business. It does not appear that
the withdrawal of Saldajeno from the partnership was published in the newspapers. The appellee and the public had a
right to expect that whatever credit they extended to Lon and Timoteo doing business in the name of Isabela Sawmill

could be enforced against the properties of said partnership. The judicial foreclosure of the chattel mortgage executed in
favor of Saldajeno did not relieve her from liability to the creditors of the partnership.
It may be presumed that Saldajeno acted in good faith, the appellees also acted in good faith in extending credit to the
partnership. Where one of the 2 innocent persons must suffer, that person who gave occasion for the damages to be
caused must bear the consequences.
CHOITHRAM JETHMAL RAMNANI AND/OR NIRMLA V. RAMNANI AND MOTI G. RAMNANI VS. COURT OF
APPEALS, SPOUSES ISHWAR JETHMAL RAMNANI, SONYA JETHMAL RAMNANI AND OVERSEAS HOLDING
CO., LTD.,
G.R. No. 85494 May 7, 1991
FACTS: Ishwar Jethmal Ramnani and his wife Sonya had their main business based in New York. Ishwar received
US $150,000.00 from his father-in-law in Switzerland.
In 1965, Ishwar Jethmal Ramnani sent the amount of US $150,000.00 to Choithram in two bank drafts of
US$65,000.00 and US$85,000.00 for the purpose of investing the same in real estate in the Philippines.
Subsequently, spouses Ishwar executed a general power of attorney appointing Ishwars full blood brothers
Choithram and Navalrai as attorneys-in-fact, empowering them to manage and conduct their business concerns in
the Philippines.
Choithram, as attorney-in-factr, entered into two agreements for the purchase of two parcels of land located in Pasig
Rizal from Ortigas & Company, Ltd. Partnership (Ortigas Ltd.) with a total area of approximately 10,048 square
meters.
Three buildings were constructed thereon and were leased out by Choithram as attorney-in-fact of spouses Ishwar.
Two of these buildings were later burned.
In 1970 Ishwar asked Choithram to account for the income and expenses relative to these properties during the
period 1967 to 1970.
Choithram failed and refused to render such accounting which prompted Ishwar to revoke the general power of
attorney.
Choithram and Ortigas Ltd. were duly notified by notice in writing of such revocation. It was also registered with
the Securities and Exchange Commission and published in The Manila Times.
Nevertheless, Choithram as such attorney-in-fact of Ishwar, transferred all rights and interests of Ishwar spouses in
favor of Nirmla Ramnani, the wife of Choitrams son, Moti.
Ortigas also executed the corresponding deeds of sale in favor of Nirmla and the TCT ISSUEd in her favour..
Thus, spouses Ishwar filed a complaint in the Court of First Instance of Rizal against Choithram and spouses Nirmla
and Moti (Choithram et al.) and Ortigas Ltd. for reconveyance of said properties or payment of its value and
damages.
Trial court dismissed the complaint ruling that the lone testimony of Ishwar regarding the cash remittance is
unworthy of faith and credit because the cash remittance was made before the execution of the general power of
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attorney. Ishwar also failed to corroborate this lone testimony and did not exhibit any commercial document as
regard to the alleged remittances.
It believed the claim of Choitram that he and Ishwar entered into a temporary arrangement in order to enable
Choithram, then a British citizen, to purchase the properties in the name of Ishwar who was an American citizen and
who was then qualified to purchase property in the Philippines under the then Parity Amendment.
Upon appeal, the CA reversed the decision and gave credence to Ishwar.
It upHELD the validity of Ishwars testimony and gave cognizance to a letter written by Choihtram imploring
Ishwar to renew the power of attorney after it was revoked. It states therein that Choithram reassures his brother that
he is not after his money and that the revocation is hurting the reputation of Ishwar. Choithram also made no
mention of his claimed temporary arrangement in the letter..
The CA ruled that Choithram is also estopped in pais or by deed from claiming an interest over the properties.
Because of Choitrams admissions from (1) power of attorney, (2) the Agreements, and (3) the Contract of Lease
It furthermore HELD that Choithram's 'temporary arrangement, by which he claimed purchasing the two (2) parcels
in question in 1966 and placing them in the name of Ishwar who is an American citizen circumvents the
disqualification provision of aliens acquiring real properties in the Philippines. Upholding the supposed "temporary
arrangement" with Ishwar would be sanctioning the perpetration of an illegal act and culpable violation of the
Constitution.
During the pendency of the case, Choithram made several attempts to dispose of his properties by way of donation
and also mortgaged the properties under litigation for 3 million USD to a shell partnership with a mere capital of
100 USD.
The Supreme Court affirms the findings of the Court of Appeals.

ISSUE:
Whether or not there was a partnership between the brothers Ishwar and Choithram
HELD:
Yes, Even without a written agreement, the scenario is clear. Spouses Ishwar supplied the capital of
$150,000.00 for the business. They entrusted the money to Choithram to invest in a profitable business venture in
the Philippines. For this purpose they appointed Choithram as their attorney-in-fact.
Choithram in turn decided to invest in the real estate business. He bought the two (2) parcels of land in question
from Ortigas as attorney-in-fact of Ishwar- Instead of paying for the lots in cash, he paid in installments and used the
balance of the capital entrusted to him, plus a loan, to build two buildings. Although the buildings were burned later,
Choithram was able to build two other buildings on the property. He rented them out and collected the rentals.
Through the industry and genius of Choithram, Ishwar's property was developed and improved into what it is now
a valuable asset worth millions of pesos.
We have a situation where two brothers engaged in a business venture. One furnished the capital, the other
contributed his industry and talent. Justice and equity dictate that the two share equally the fruit of their joint
investment and efforts. Perhaps this Solomonic solution may pave the way towards their reconciliation. Both would
stand to gain. No one would end up the loser. After all, blood is thicker than water.
However, because of the devious machinations and schemes that Choithram employed he should pay moral and
exemplary damages as well as attorney's fees to spouses Ishwar.