JG Summit Holdings Inc. vs. Court of Appeals[GR 124293, 20 November 2000]

Facts: On 27 January 1977, the National Investment and Development Corporation (NIDC), a government corporation, entered into a Joint Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. of Kobe, Japan (Kawasaki) for the construction, operation, and management of the Subic National Shipyard, Inc. (SNS), which subsequently became the Philippine Shipyard and Engineering Corporation (PHILSECO). Under the JVA, NIDC and Kawasaki would maintain a shareholding proportion of 60% - 40%, respectively. One of the provisions of the JVA accorded the parties the right of first refusal should either party sell, assign or transfer its interest in the joint venture. On 25 November 1986, NIDC transferred all its rights, title and interest in PHILSECO to the Philippine National Bank (PNB). 

More than two months later or on 3 February 1987, by virtue of Administrative Order 14, PNB's interest in PHILSECO was transferred to the National Government. Meanwhile, on 8 December 1986, President Corazon C. Aquino issued Proclamation 50 establishing the Committee on Privatization (COP) and the Asset Privatization Trust (APT) to take title to and possession of, conserve, manage and dispose of non-performing assets of the National Government. On 27 February 1987, a trust agreement was entered into between the National Government and the APT by virtue of which the latter was named the trustee of the National Government's share in PHILSECO. In 1989, as a result of a quasi-reorganization of PHILSECO to settle its huge obligations to PNB, the National Government's shareholdings in PHILSECO increased to 97.41% thereby reducing Kawasaki's shareholdings to 2.59%. Exercising their discretion, the COP and the APT deemed it in the best interest of the national economy and the government to privatize PHILSECO by selling 87.67% of its total outstanding capital stock to private entities. 

After a series of negotiations between the APT and Kasawaki, they agreed that the latter's right of first refusal under the JVA be "exchanged" for the right to top by 5% the highest bid for said shares. They further agreed that Kawasaki would be entitled to name a company in which it was a stockholder, which could exercise the right to top. On 7 September 1990, Kawasaki informed APT that Philyards Holdings, Inc. (PHI) would exercise its right to top by 5%. At the pre-bidding conference held on 28 September 1993, interested bidders were given copies of the JVA between NIDC and Kawasaki, and of the Asset Specific Bidding Rules (ASBR) drafted for the 87.67% equity (sic) in PHILSECO of the National Government. The provisions of the ASBR were explained to the interested bidders who were notified that bidding would be held on 2 December 1993. At the public bidding on said date, the consortium composed of JG Summit Holdings, Inc. (JGSMI), Sembawang Shipyard Ltd. of Singapore (Sembawang), and Jurong Shipyard Limited of Malaysia (Jurong), was declared the highest bidder at P2.03 billion. The following day, the COP approved the sale of 87.67% National Government shares of stock in PHILSECO to said consortium. It notified JGSMI of said approval "subject to the right of Kawasaki Heavy Industries, Inc./Philyards Holdings, Inc. to top JGSMI's bid by 5% as specified in the bidding rules." 

On 29 December 1993, JGSMI informed the APT that it was protesting the offer of PHI to top its bid on the grounds that: (a) the Kawasaki/PHI consortium composed of Kawasaki, Philyards, Mitsui, Keppel, SM Group, ICTSI and Insular Life violated the ASBR because the last four (4) companies were the losing bidders (for P1.528 billion) thereby circumventing the law and prejudicing the weak winning bidder; (b) only Kawasaki could exercise the right to top; (c) giving the same option to top to PHI constituted unwarranted benefit to a third party; (d) no right of first refusal can be exercised in a public bidding or auction sale, and (e) the JG Summit Consortium was not estopped from questioning the proceedings. On 2 February 1994, JGSMI was notified that PHI had fully paid the balance of the purchase price of the subject bidding. On 7 February 1994, the APT notified JGSMI that PHI had exercised its option to top the highest bid and that the COP had approved the same on 6 January 1994. On 24 February 1994, the APT and PHI executed a Stock Purchase Agreement. Consequently, JGSMI filed with the Supreme Court a petition for mandamus under GR 114057. On 11 May 1994, said petition was referred to the Court of Appeals. On 18 July 1995, the Court of Appeals "denied" for lack of merit the petition for mandamus. JGSMI filed a motion for the reconsideration of said Decision which was denied on 15 March 1996. JGSMI filed the petition for review on certiorari. 

Issue: Whether PHILSECO, as a shipyard, is a public utility and, hence, could be operated only by a corporation at least 60% of whose capital is owned by Filipino citizens, in accordance with Article XII, Section 10 of the Constitution. 

Held: A shipyard such as PHILSECO being a public utility as provided by law, Section 11 of the Article XII of the Constitution applies. The provision states that "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." The progenitor of this constitutional provision, Article XIV, Section 5 of the 1973 Constitution, required the same proportion of 60% - 40% capitalization. The JVA between NIDC and Kawasaki entered into on 27 January 1977 manifests the intention of the parties to abide by the constitutional mandate on capitalization of public utilities. The joint venture created between NIDC and Kawasaki falls within the purview of an "association" pursuant to Section 5 of Article XIV of the 1973 Constitution and Section 11 of Article XII of the 1987 Constitution. Consequently, a joint venture that would engage in the business of operating a public utility, such as a shipyard, must observe the proportion of 60%-40% Filipino-foreign capitalization. Further, 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 capitalization. Kawasaki was bound by its contractual obligation under the JVA that limits its right of first refusal to 40% of the total capitalization of PHILSECO. Thus, Kawasaki cannot purchase beyond 40% of the capitalization of the joint venture on account of both constitutional and contractual proscriptions. From the facts on record, it appears that at the outset, the APT and Kawasaki respected the 60%-40% capitalization proportion in PHILSECO. However, APT subsequently encouraged Kawasaki to participate in the public bidding of the National Government's shareholdings of 87.67% of the total PHILSECO shares, definitely over and above the 40% limit of its shareholdings. In so doing, the APT went beyond the ambit of its authority.Email This

R. No. 109248 July 3, 1995 GREGORIO F. ORTEGA, TOMAS O. DEL CASTILLO, JR., and BENJAMIN T. BACORRO, petitioners, vs. HON. COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION and JOAQUIN L. MISA, respondents. FACTS: Ortega, then a senior partner in the law firm Bito, Misa, and Lozada withdrew from the said firm. He filed with SEC a petition for dissolution and liquidation of the partnership. The 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 anytime, 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. 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 regardlessof his good or bad faith HELD: 1. Yes. The partnership agreement of the firm provides that ”[t]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.” 2. 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 damages

TOCAO V. COURT OF APPEALS 342 SCRA 20 (2000) Facts: Petitioner William T. Bello introduced private respondent  Nenita Anay to petitioner Tocao, who conveyed her desire to enter into a joint venture with her for the importation and local distribution of kitchen cookwares. Belo acted the capitalist, Tocao as president and general manager, and Anay as head of the marketing department (considering her experience and established relationship with West Bend Company,c a manufacturer of kitchen wares in Wisconsin, U.S.A) and later, vice-president for sales. 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 same was not reduced to writing on the strength of Belo’s assurances. Later, Anay was able to secure the distributorship of cookware  products from the West Bend Company. They operated under the name of Geminesse Enterprise, a sole proprietorship registered in Marjorie Tocao’s name. Anay attended distributor/dealer meetings with West Bend Company with the consent of Tocao. Due to Anay’s excellent job performance she was given a plaque of appreciation. Also, in a memo signed by Belo, Anay was given 37% commission for her personal sales "up Dec 31/87,” apart from the 10% share in profits. On October 9, 1987, Anay learned that Marjorie Tocao terminated her as 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. Belo did not answer. 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 P13,300,360.00. On April 5, 1988, Nenita A. Anay filed a complaint for sum of money with damages against Tocao and Belo before the RTC of Makati. She prayed that she be paid (1) P32,00.00 as unpaid overriding commission from January 8, 1988 to February 5, 1988; (2) P100,000.00 as moral damages, and (3) P100,000.00 as exemplary damages. The plaintiff also prayed for an audit of the finances of Geminesse Enterprise from the inception of its business operation until she was “illegally dismissed” to determine her ten percent (10%) share in the net profits. She further prayed that she be paid the five percent (5%) “overriding commission“ on the remaining 150 West Bend cookware sets before her “dismissal.” However, Tocao and Belo asserted that the alleged agreement was not reduced to writing nor ratified, hence, unenforceable, void, or nonexistent. Also, they denied the existence of a  partnership because, as Anay herself admitted, Geminesse Enterprise was the sole proprietorship of Marjorie Tocao. Belo also contended that he merely acted as a guarantor of Tocao and denied contributing capital. Tocao, on the other hand, denied that they agreed on a ten

percent (10%) commission on the net profits. Both trial court and court of appeals ruled that a business  partnership existed and ordered the defendants to pay. Issue: Whether or not a partnership existed – YES Ratio: 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. Private respondent Anay contributed her expertise in the  business of distributorship of cookware to the partnership and hence, under the law, she was the industrial or managing  partner. Petitioner Belo had an proprietary interest. He presided over meetings regarding matters affecting the operation of the  business. Moreover, his having authorized in writing giving Anay 37% of the proceeds of her personal sales, could not be interpreted otherwise than that he had a proprietary interest in the business. This is inconsistent with his claim that he merely acted as a guarantor. If indeed he was, he should have  presented documentary evidence. Also, Art. 2055 requires that a guaranty must be express and the Statute of Frauds requires that it must be in writing. Petitioner Tocao was also a capitalist in the partnership. She claimed that she herself financed the business. The business venture operated under Geminesse Enterprise did not result in an employer-employee relationship between  petitioners and private respondent. First, Anay had a voice in the management of the affairs of the cookware distributorship and second, Tocao admitted that Anay, like her, received only commissions and transportation and representation allowances and not a fixed salary. If Anay was an employee, it is difficult to believe that they recieve the same income. Also, the fact that they operated under the name of Geminesse   BUSORG CASE DIGESTS Atty. Charlie Mendoza 2 Enterprise, a sole proprietorship, is of no moment. Said  business name was used only for practical reasons - it was utilized as the common name for petitioner Tocao’s various  business activities, which included the distributorship of cookware. The partnership exists until dissolved under the law. Since the  partnership created by petitioners and private respondent has no fixed term and is therefore a partnership at will predicated on their mutual desire and consent, it may be dissolved by the will of a partner. Petitioners Tocao’s unilateral exclusion of private respondent from the partnership is shown by her memo to the Cubao office plainly stating that private respondent 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. The partnership among petitioners and private respondent is ordered dissolved, and the parties are ordered to effect the winding up and liquidation of the partnership pursuant to the  pertinent provisions of the Civil Code. Petitioners are ordered to pay Anay’s 10% share in the profits, after accounting, 5% overriding commission for the 150 cookware sets available for disposition since the time private respondent was wrongfully excluded from the partnership by petitioner, overriding commission on the total production, as well as moral and exemplary damages, and attorney’s fees JM TUAZON and CO v. BOLANOS 95 PHIL 106 Facts: This is an action to recover possession of registered land situated in Barrio Tatalon, Quezon City. The complaint of  plaintiff JM Tuason & Co Inc was amended 3 times with respect to the extent and description of the land sough to be recovered. Originally, the land sought to be recovered was said to be more or less 13 hectares, but it was later amended to 6 hectares, after the defendant had indicated the plaintiff 's surveyors the portion of land claimed and occupied by him. The second amendment is that the portion of the said land was covered in another TCT and the 3rd amendment was made after the defendant' surveyor and a witness, Quirino Feria testified that the land occupied by the defendant was about 13 hectares. Defendant raised the defense of prescription and title thru "open, continuous, exclusive and public and notorious  possession of land in dispute. He also alleged that the registration of the land was obtained by plaintiff 's predecessor through fraud or error. The lower court rendered judgment in favor of the plaintiff and ordered the defendant to restore possession of the land to the plaintiff, as well as to pay corresponding rent from January 1940 until he vacates the land. On appeal defendant raised a number of assignments or errors in the decision, one of which is that the trial court erred in not dismissing the case on the ground that the case was not brought by the real party in interest. Issue: Whether or not the lower court erred in not dismissing the case on the ground that it was not brought by the real party in interest? – NO Ratio: What the Rules of Court require is that an action be broughtin the name of, but not necessarily by, the real party in interest. In fact the practice is for an attorney-at-law to bring the action, that is to file the complaint, in the name of the plaintiff. That  practice appears to have been followed in this case, since the complaint is signed by the law firm of Araneta and Araneta, "counsel for plaintiff" and commences with the statement "comes now plaintiff, through its undersigned counsel." It is true that the complaint also states that the plaintiff is "represented herein by its Managing Partner Gregorio Araneta, Inc.", another corporation, but

there is nothing against one corporation being represented by another person, natural or  juridical, in a suit in court. The contention that Gregorio Araneta, Inc. can not act as managing partner for plaintiff on the theory that it is illegal for two corporations to enter into a  partnership is without merit, for the true rule is that "though a corporation has no power to enter into a partnership, it may nevertheless enter into a joint venture with another where the nature of that venture is in line with the business authorized by its charter." AGUILA, JR. v. COURT OF APPEALS 316 SCRA 246 (1999) Facts: Alfredo N. Aguilar, Jr. (petitioner) is the manager of A.C. Aguila & Sons, Co., a partnership engaged in lending activities. Felicidad S. Vda. de Abrogar (private respondent) and her late husband, Ruben M. Abrogar, were the registered owners of a house and lot, covered by Transfer Certificate of Title No. 195101, in Marikina, Metro Manila. On April 18, 1991, private respondent, with the consent of her late husband, and A.C. Aguila & Sons, Co., represented by petitioner, entered into a Memorandum of Agreement which provided that A.C. Aguila & Sons, Co. shall buy the property from  private respondent for P200,000 subject to an option to repurchase for P230,000 (valid for 90 days), etc. On the same day, the parties likewise executed a deed of absolute sale, dated June 11, 1991, wherein private respondent, with the consent of her late husband, sold the subject property to A.C. Aguila & Sons, Co., represented by petitioner, for P200,000,00. In a special power of attorney dated the same day, April 18, 1991, private respondent authorized petitioner   BUSORG CASE DIGESTS Atty. Charlie Mendoza 3 to cause the cancellation of TCT No. 195101 and the issuance of a new certificate of title in the name of A.C. Aguila and Sons, Co., in the event she failed to redeem the subject  property as provided in the Memorandum of Agreement. Private respondent failed to redeem the property. Pursuant to the special power of attorney mentioned above, petitioner caused the cancellation of TCT No. 195101 and the issuance of a new certificate of title in the name of A.C. Aguila and Sons, Co. Private respondent then received a letter dated August 10, 1991 from Atty. Lamberto C. Nanquil, counsel for A.C. Aguila & Sons, Co., demanding that she vacate the  premises within 15 days after receipt of the letter and surrender its possession peacefully to A.C. Aguila & Sons, Co. Otherwise, the latter would bring the appropriate action in court. Upon the refusal of private respondent to vacate the subject premises, A.C. Aguila & Sons, Co. filed an ejectment case against her in the Metropolitan Trial Court, Branch 76, Marikina, Metro Manila. MeTC, Marikina, MM (April 3, 1992): Ruled in favor of A.C. Aguila & Sons, Co. Private respondent appealed to RTC Pasig, CA, and then SC but she still lost. Private respondent then filed a petition for declaration of nullity of a deed of sale filed by Felicidad S. Vda. de Abrogar against Alfredo N. Aguila, Jr. She alleged that the signature of her husband on the deed of sale was a forgery because he was already dead when the deed was supposed to have been executed on June 11, 1991. •RTC,Marikina,MM(April11,1995):Dismissed. •

CA(November29,1990):Reversed ruling of the RTC. Hence, this petition for review on certiorari. Petitioner now contends that: (1) he is not the real party in interest but A.C. Aguila & Co., against which this case should have been brought; (2) the judgment in the ejectment case is a  bar to the filing of the complaint for declaration of nullity of a deed of sale in this case; and (3) the contract between A.C. Aguila & Sons, Co. and private respondent is a  pacto de retro sale and not an equitable mortgage as held by the appellate court. Issue: Whether the real party in interest is A.C. Aguila & Co. and not petitioner. – YES Ratio: Under Art. 1768 of the Civil Code, a partnership "has a  juridical personality separate and distinct from that of each of the partners." The partners cannot be held liable for the obligations of the partnership unless it is shown that the legal fiction of a different juridical personality is being used for fraudulent, unfair, or illegal purposes. In this case, private respondent has not shown that A.C. Aguila & Sons, Co., as a separate juridical entity, is being used for fraudulent, unfair, or illegal purposes. Moreover, the title to the subject property is in the name of A.C. Aguila & Sons, Co. and the Memorandum of Agreement was executed between private respondent, with the consent of her late husband, and A.C. Aguila & Sons, Co., represented by petitioner. Hence, it is the partnership, not its officers or agents, which should be impleaded in any litigation involving property registered in its name. A violation of this rule will result in the dismissal of the complaint. HEIRS OF TAN ENG KEE v. COURT OF APPEALS 341 SCRA 740 (2000) Facts: The heirs of Tan Eng Kee filed a suit against the decedent’s  brother Tan Eng Lay. The complaint alleged that after the Second World War, the brothers, pooling their resources and industry together, entered into a partnership engaged in the selling of lumber and hardware and construction supplies. They named their enterprise “Benguet Lumber” which they  jointly managed until Tan Kee’s death. Petitioners 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 “Benguet Lumber” into a corporation called “Benguet Lumber Company.” The incorporation was purportedly a ruse to deprive Tan Eng Kee and his heirs of their rightful  participation in the profits of the business. Petitioners prayed for accounting of the partnership assets, and the dissolution, and winding up of the alleged partnership formed after the World War II between Tan Eng Kee and Tan Eng Lay. The Regional Trial court found that Benguet Lumber is a joint venture which is akin to a particular partnership, and declared that the assets of Benguet Lumber are the same assets turned over to Benguet lumber Co. and as such the heirs or legal representatives of the deceased

Tan Eng Kee have a legal right to share in the said assets. The Court of Appeals reversed the  judgment of the Trial Court. Issue: Whether or not a partnership existed between Tan Eng Kee and Tan Eng Lay- NO Ratio: In order to constitute a partnership, it must be established that (1) two or more persons bound themselves to contribute money, property, or industry to a common fund, and (2) they intend to divide the profits among themselves. The best evidence of the partnership’s existence would have been the contract of partnership itself, or the articles of partnership but there is none. The alleged partnership, though, was never formally organized. In addition, petitioners point out that the  New Civil Code was not yet in effect when the partnership was allegedly formed sometime in 1945, although the contrary may well be argued that nothing prevented the parties from complying with the provisions of the New Civil Code when it took effect on August 30, 1950. A review of the record  persuades us that the Court of Appeals correctly reversed the decision of the trial court. The evidence presented by  petitioners falls short of the quantum of proof required to establish a partnership. It is indeed odd, if not unnatural, that despite the forty years the partnership was allegedly in existence, Tan Eng Kee never asked for an accounting. The essence of a partnership is that the partners share in the profits and losses. Each has the right to demand an accounting as long as the partnership exists. A You're reading a free preview. Pages 4 to 34 are not shown in this preview.

Read the full version

TOCAO V. CAG.R. No. 127405; October 4, 2000

Ponente: J. Ynares-Santiago

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 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.

ISSUE:          Whether the parties formed a 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.

Therefore, the parties formed a partnership.