PARTNERSHIP, AGENCY, AND TRUST CASE DIGESTS

FIRST SET OF CASES: PARTNERSHIP

1) LIM TONG LIM VS. PHILIPPINE FISHING GEAR INDUSTRIES, INC.

Lim Tong Lim, petitioner, vs. Philippine Fishing Gear Industries, Inc., respondent

FACTS:

Petitioner Lim Tong Lim requested Peter Yao who engaged in commercial fishing to join him, while Antonio Chua was already Yao's partner. After convening for a few times, Lim, Chua, and Yao verbally agreed to acquire 2 fishing boats, the FB Lourdes and the FB Nelson for the sum of P 3.35 Million. 

That they borrowed P 3.25 million from Jesus Lim, brother of Petitioner Lim Tong Lim, to finance the venture. 

That they bought the boats from CMF Fishing Corporation, which executed a Deed of Sale over these 2 boats in favor of  Petitioner Lim Tong Lim only to serve as security for the loan extended by Jesus Lim. 

That Lim, Chua and Yao agreed that the refurbishing, re-equipping, repairing, dry docking and other expenses for the boats would be shouldered by Chua and Yao.

That because of the " unavailability of funds: Jesus Lim again extended a loan to the partnership in the amount of P 1 million secured by a check, because of which, Yao and Chua entrusted the ownership papers of 2 other boats, Chua's FB Lady Anne Mel and Yao's FB Tracy to Lim Tong Lim.. 

That in pursuance of the business agreement, Peter Yao, and Chua bought nets from respondent Philippine Fishing Gear, in behalf of "Ocean Quest Fishing Corporation," their purported business name. They claimed that they were engaged in a business venture with Petitioner Lim Tong Lim, who however was no a signatory to the agreement. 

That subsequently, Chua and Yao filed a civil case against Lim Tong Lim for a) declaration of nullity of commercial documents, b) reformation of contracts, C) declaration of ownership of fishing boats, d) injunction, and 5) damage. 

The case was amicably settled through a Compromise Agreement executed between the parties-litigants, and under this agreement the parties agreed to sell the 4 vessels for 5,750,000.00 including the fishing nets and said proceeds shall be applied as full payment for P 3,250,000.00 in favor of JL Holdings and / or Lim Tong Lim. That if the same will be sold to a higher price than 5,750,000.00 whatever will be the excess will be divided equally to them three; and if the proceeds will be less than said amount, whatever deficiency shall be shouldered and paid to JL Holdings by them in the same division. 

Buyers failed to pay for the fishing nets and the floats, hence private respondent filed a collection suit aginst Chua, Yao and Petioner Lim Tong Lim with a prayer for a writ of preliminary attachment. suit was brought against the three in their capacities as general partners on the allegation that their purported corporation is nonexistent as shown by a Certification from SEC. Lower Court issued a Writ of Preliminary Attachment by by attaching the fishing nets on the board of FB Lourdes. 

Instead of answering, Chua filed a manifestation admitting his liability and requesting a reasonable time within which to pay, Yao, filed an answer but because of his failure to appear in the subsequent hearing, he waived his rights to cross examine witnesses and to present evidence ion his behalf.

Lim Tong Lim filed an answer with counterclaim and corss claim and moved for the lifting of the attachment. Trial court maintained the Writ and upon motion of the respondent ordered the sale of the fishing nets at a public auction. Fishing Gear won the bidding for P 900,000.00 and deposited the same to the court, and that the three were jointly liable to pay the respondent. 

Both lower courts ruled that a partnership among the 3 based on:

1) the testimonies of the witnesses presented and

2) Compromise Agreement executed by the three in the civil case as mentioned above. 

Lim appealed to CA, CA affirmed the RTC. 

Lim contends that he should not be held liable for the equipment purchased from respondent and there is no partnership existed between him, Yao, and Chua; and that CA based its finding on the Compromise Agreement alone. And that he disclaims any direct participation in the purchase of the nets, alleging that the negotiations were conducted by Chua and Yao and not even met the representatives of the respondent company. He further argues that he was a lessor not a partner of Chua and Yao for the Contract of Lease to the two main asset of the purported partnership, the boat F/B Lourdes.

ISSUE:

1) Whether  by their acts, Lim, Chua, and Yao could be deemed to have entered into a partnership and therefore Lim may be held jointly liable with Chua and Yao. 

2) Whether notwithstanding Lim has no any direct participation in the purchase of the nets, he is stillsubject to the doctrine of Corporation by Estoppel 

HELD:

Yes. lower courts clearly showed that there existed a partnership among Chua, Yao and him based on the above facts and in pursuant to Art. 1767 of the Civil Code which provides that:

            “Article 1767—By the 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.”

A partnership may be deemed to exist among parties who agree to borrow money to pursue a business and to divide the profits or losses that may arise therefrom, even if it is shown that they have not contributed any capital of their own to common fund as their contribution to such fund could be an intangible like credit or industry. 

From the factual finding of the Lower Courts, it is clear that Chua, Yao, and Lim decided to engage in a fishing business, which they started by buying boats worth 3.35 million, financed by a loan secured from Jesus Lim was petitioner's brother. In their compromise agreement, they subsequently revealed their intention to pay the loan with the proceeds of the sale of the boats, and to divide equally among them the excess or loss. The purchase and repair of these boats were financed with borrowed money, fell under the term common fund under art. 1767.  Indeed formed partnership. Moreover, it is clear that the partnership extended not only to the purchase of the boat, but also to that of the nets and the floats. The fishing nets and the floats, both essential to fishing, were obviously acquired in furtherance of their business. It would have been inconceivable for Lim to involve himself so much in buying the boat bit not in the acquisition of the aforesaid equipment, without which the business could not have proceeded. He is also wrong in arguing that the court's sole basis for assuming th existence of partnership was the Compromise Agreement, as this Agreement was but an embodiment of the relationship extant among the parties prior to its execution. 

2) Yes

Those who act or purport to act as the representative or agents of an ostensible corporate entity who is proven to be legally nonexistent do so without authority and at their own risk may be stopped from denying its corporate existence. The doctrine of corporation by estoppel may apply to the alleged corporation and to a third party; an unincorporated association, which represents itself to be a corporation, will be stopped from denying its corporate capacity in a suit against it by third person who relies in good faith on such representation. The Third party who, knowing an association to be unincorporated, nonetheless treated it as a corporation and received benefits from it, may be barred from denying its corporate existence in a suit brought against the alleged corporation. Under this doctrine, those acting on behalf of a corporation and those benefited by it, knowing it to be without valid existence, are held liable as general partners. And a person who has reaped the benefits of a contract entered into by persons with whom he previously has an existing relations is deemed to be part of said association and is covered by the scope of the doctrine of corporation by estoppel. 

Technically, it is true that petitioner did not directly act on behalf of the corporation, however, having reaped the benefits of the contract entered into by persons with whom he previously had an existing relationship, he is deemed to be part of said association and is covered by the scope of the doctrine of corporation by estoppel. Petition denied. 

2) NAVARRO VS. COURT OF APPEALS

LOURDES NAVARRO AND MENARDO NAVARRO, petitioners, vs. COURT OF APPEALS, JUDGE BETHEL KATALBAS-MOSCARDON, Presiding Judge, Regional Trial Court of Bacolod City, Branch

G.R. No. 101847. May 27, 1993

FACTS: 

On July 23, 1976, herein private respondent Olivia Yanson filed a complain against petitioner Lourdees Navarro for " Delivery of Personal Properties with Damages". The complaint incorporated an application for a Writ of Replevin. The Complaint was docketed and was later amended to included the husband of the petioner, Ricardo Yanson as co-plaintiff and petitioner's husband as co-defendant. 

It is undeniable that both the plaintiff and the defendant wife made admission to have entered into an agreement of operating this Allied Air Freight Agency of which the plaintiff personally constituted with the Manila Office in a sense that the plaintiff did supply the necessary equipment and money while her brother Atty. Villaflores was the Manager and the defendant the cashier. It was also admitted that part of this agreement was an equal sharing of whatever proceeds realized. Consequently, the plaintiff brought into this transaction certain chattels in compliance with her obligation. The same has been done by the herein brother and the herein defendant who started to work in the business. 

In 1976, Judge Victoriano (later to be promoted and to retire as Presiding Justice of the Court of Appeals) approved private respondents' application for a writ of replevin. The Sheriff's return of service affirmed receipt by private respondents of all the pieces of personal property sought to be recovered from petitioners. 

In 1990, Presiding Judge Moscardon rendered a decision disposing:

"All chattels already recovered by plaintiff by virtue of the Writ of Replevin and as listed in the complaint are hereby sustained to belong to plaintiff being the owner of these properties; the motor vehicle, particularly that Ford Fiesta Jeep registered in and which had remain in the possession of the defendant is likewise declared to belong to her, however, said defendant is hereby ordered to reimburse plaintiff the sum of P 6,500.00 representing the amount advanced to pay part of the price therefor; sand said defendant is likewise hereby ordered to return to plaintiff such other equipment as were brought by the latter to and during the operation of their business as were listed in the complaint and not recovered as yet by virtue of the previous writ of replevin."

Trial Court issued Writ of Execution. The sheriff's return of Service declared that the writ was sduly served and satisfied. A receipt for the amount of P 6,500.00 issued by Mrs. Lourdes Yanson, was likewise submitted by the Sheriff. 

Petitioner petitioned and claim that the trial judge ignored evidence that would show that the parties clearly intended to form and actually formed a verbal partnership engaged in the business of Air Freight Service Agency in Bacolod and that the decision sustaining the writ of replevin is void since the properties belonging to the partnership do not actually belong to any of the parties until the final disposition and winding up of the partnership. 

ISSUE:

1) Whether there was a partnership that existed between the parties based on their verbal contention. 

2) Whether the properties that were commonly used in the operation of Allied Freight belonged to this alleged partnership business. 

HELD:

1) No. Art. 1767 of the NCC defines the contract of partnership "By the 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 proceeds among themselves.Furthermore, the Code provides under Art. 1771 and 1772 that while a partnership may be constituted in any form, public instrument is necessary where immovable or any rights is constituted. Likewise, if the partnership involves a capitalization of P 3,000.00 or more in money or property, the same must appear in a public instrument which must be recorded in the office of the securities and exchange commission. Failure to comply with these requirements shall only affect liability of the partners to third persons. 

A cursory examination of the evidences presented no proof that a partnership, whether oral or written had been constituted at the inception of this transaction. True it is even that even up to the filling of this complaint those movables brought by plaintiff for the use in the operation of the business remain registered in her name. 

While there may have been co-ownership to cor-possession of some items and or any sharing of proceeds by way of advances received by both plaintiff and the defendant, these are not indicative and supportive of the existence of any partnership between them, Art. 1769 of the Civil Code is explicit. Such that is assuming that there were profits realized in 2975 after 2 year deficits were compensated, this could only be subject to an equal sharing consonant to the agreement to equally divide profit realized, besides the alleged profits was a difference found dafter valuating the assets and not arising from the real operation of the business. In accounting procedures, this could not be profit but a net worth. 

2) As to the properties sought to be recovered. This Court affirmed to the decision of the Court of Appeals. 

Petition Dismissed. 

3) VILLAREAL VS. RAMIREZ

LUZVIMINDA J. VILLAREAL, DIOGENES VILLAREAL and CARMELITO JOSE, petitioners, vs. DONALDO EFREN C. RAMIREZ and Spouses CESAR G. RAMIREZ, JR. and CARMELITA C. RAMIREZ, respondents.

G.R. No. 144214. July 14, 2003.

FACTS: 

In 1984, Villareal, Carmelito and Jesus Jose formed a partnership with a capital of P 750,000 for the operation of a restaurant and catering business under the name "Aquarius Food House and Catering Services" Villareal was appointed general manager and Carmelito as operations manager. 

Respondent Ramirez joined as a partner in the business in 1984. His capital contribution of P250,000.00 was paid by his parents, respondents Cesar and Carmelita Ramirez.

After Jesus Jose withdrew from the partnership in 1987, his capital contribution of P 250,000 was refunded to him in cash by agreement of the partners. 

In the same month, without prior knowledge of respondents, petitioners closed the restaurant, allegedly because of increased rental. The restaurant furniture and equipment were deposited in the respondents' house for storage. 

Respondents spouse wrote petitioners, saying that they were no longer interested in continuing their partnership in reopening the restaurant, and that they were accepting the latter's offer to return their capital contribution. 

Carmelita Ramirez wrote another letter informing petitioners of the deterioration of the restaurant furniture and equipment stored in their house. She also reiterated the request for the return of their one third share in the equity of the partnership, but requests left unheeded. 

Respondents subsequently filed a complaint for the collection of sum of money from the petitioners.

Petitioners contended that respondents had been paid upon the turnover to them of furniture and equipment worth P400,000.00 and that the latter had no right to demand a return of their equity because their share, together with the rest of the capital of the partnership had been spent as a result of irreversible business losses. 

In their Reply, respondents alleged that they did not know of any loan encumbrance on the restaurant. According to them, if such allegation were true, then the loans incurred by petitioners should be regarded as purely personal and, as such, not chargeable to the partnership. The former further averred that they had not received any regular report or accounting from the latter, who had solely managed the business. Respondents also alleged that they expected the equipment and the furniture stored in their house to be removed by petitioners as soon as the latter found a better location for the restaurant

Respondents filed an Urgent Motion for Leave to Sell or Otherwise Dispose of Restaurant Furniture and Equipment on July 8, 1988. The furniture and the equipment stored in their house were inventoried and appraised at P29,000.15 The display freezer was sold for P5,000 and the proceeds were paid to them.

Both the trial and the appellate courts found that a partnership had indeed existed, and that it was dissolved on March 1, 1987. They found that the dissolution took place when respondents informed petitioners of the intention to discontinue it because of the former’s dissatisfaction with, and loss of trust in, the latter’s management of the partnership affairs. Both ruled in favor of the respondents and against the petitioners.

Petitioners raised that issue that whether the Court of Appeals decision ordering the distribution of the capital contribution, instead of the net capital after the dissolution and liquidation of a partnership, thereby treating the capital contribution like a loan, is in accordance with law and jurisprudence. 

ISSUE:

1) Whether petitioners are liable to respondents for the latter's share in the partnership

2) Whether the CA's computation of P 253, 114 as respondent's share is correct.

HELD:

1) No, respondents have no right to demand from petitioners the return of their equity share. Except as managers of the partnership, petitioners did not personally hold its equity or assets. The partnership has a judicial personality separate and distinct from that of each of the partners. Since the capital was contributed to the partnership, not to petitioners, it is the partnership that must refund the equity of the retiring partners.  

2) No. What must be returned. Since it is the partnership, as a separate and distinct entity, that must refund the shares of the partners, the amount to be refunded is necessarily limited to its total resources. In other words, it can only pay out what it has in its coffers, which consists of all its assets. However, before the partners can be paid their shares, the creditors of the partnership must first be compensated. After all the creditors have been paid, whatever is left of the partnership assets becomes available for the payment of the partners’ shares.

Evidently, in the present case, the exact amount of refund equivalent to respondents’ one-third share in the partnership cannot be determined until all the partnership assets will have been liquidated—in other words, sold and converted to cash—and all partnership creditors, if any, paid. The CA’s computation of the amount to be refunded to respondents as their share was thus erroneous.

Generally, in the pursuit of a partnership business, its capital is either increased by profits earned or decreased by losses sustained. It does not remain static and unaffected by the changing fortunes of the business. Because of the facts presented facts, the partnership capital was actually reduced. When petitioners and respondents ventured into business together, they should have prepared for the fact that their investment would either grow or shrink. In the present case, the investment of respondents substantially dwindled. The original amount of P250,000 which they had invested could no longer be returned to them, because one third of the partnership properties at the time of dissolution did not amount to that much.

Court disagree. The delivery of the store furniture and equipment to private respondents was for the purpose of storage. They were unaware that the restaurant would no longer be reopened by petitioners. Hence, the former cannot be faulted for not disposing of the stored items to recover their capital investment.

Petition Granted, assailed decision is set aside without prejudice to a proper proceedings for the accounting, liquidation and the distribution of the remaining partnership, if any. 

4) PHILEX MINING CORPORATION VS. CIR

G.R. 148187. 2008 

FACTS:

Petitioner Philex Mining Corporation entered into an agreement with Baguio Gold Mining Company for the former to manage and operate the latter's mining claim, known as the Sto. Nino mine located in Benguet Province. The parties agreement was denominated as "Power of Attorney. 

In course of managing and operating the project, Philex Mining made advances of cash and property in accordance with par. 5 of the agreement which provides that:

"Whenever the MANAGERS shall deem it necessary and convenient in connection with the MANAGEMENT of the STO. NINO MINE, they may transfer their own funds or property to the Sto. Nino PROJECT, in accordance with the following arrangements:xxx"

However the mine suffered continuing losses over the years which resulted to petitioner's withdrawal as manager of the mine and the eventual cessation of the mine operations.

Thereafter, the parties executed a "Compromise with Dation in Payment" followed by an Amendment to Compromise with Dation in Payment” where the parties determined that Baguio Gold’s indebtedness to petitioner actually amounted to P259,137,245.00, which sum included liabilities of Baguio Gold to other creditors that petitioner had assumed as guarantor. These liabilities pertained to long-term loans amounting to US$11,000,000.00 contracted by Baguio Gold from the Bank of America NT & SA and Citibank N.A. This time, Baguio Gold undertook to pay petitioner in two segments by first assigning its tangible assets for P127,838,051.00 and then transferring its equitable title in its Philodrill assets for P16,302,426.00. The parties then ascertained that Baguio Gold had a remaining outstanding indebtedness to petitioner in the amount of P114,996,768.00.

In its 1982 annual income tax return, petitioner deducted from gross income the amount of P 112,136,000.00 as loss on settlement of receivable from Baguio Gold against reserves and allowances; however, BIR disallowed the amount as deduction for bad debt and assessed petitioner a deficiency income tax of P62,811, 161.39.

Petitioner protested before the BIR arguing Petitioner emphasized that the debt arose out of a valid management contract it entered into with Baguio Gold. The bad debt deduction represented advances made by petitioner which, pursuant to the management contract, formed part of Baguio Gold’s “pecuniary obligations” to petitioner. It also included payments made by petitioner as guarantor of Baguio Gold’s long-term loans which legally entitled petitioner to be subrogated to the rights of the original creditor. 

BIR denied. appealed before Court of Tax Appeals is also denied. Court of Appeals affirmed the decision of the CTA. 

Petitioner insists that in determining the nature of its business relationship with Baguio Gold, court should not only rely on the Power of Attorney but also on the subsequent Compromise with Dation in Payment and Amended Compromise with Dation in Payment that the parties executed. These documents, allegedly evinced the parties intent to treat the advances and payments as a loan and establish a creditor debtor relationship between them.

ISSUE:

Whether the Power of Attorney is an instrument material in determining the true nature of the business relationship between the petitioner the Baguio Gold.

HELD:

Yes.  Before resort may be had to the two compromise agreements, the parties’ contractual intent

must first be discovered from the expressed language of the primary contract under which the parties’ business relations were founded. It should be noted that the compromise agreements were mere collateral documents executed by the parties pursuant to the termination of their business relationship created under the “Power of Attorney”. On the other hand, it is the latter which established the juridical relation of the parties and defined the parameters of their dealings with one another.

The parties entered into the compromise agreements as a consequence of the dissolution of their business relationship. It did not define that relationship or indicate its real character.

An examination of the “Power of Attorney” reveals that a partnership or joint venture was indeed intended by the parties. Under 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. While a corporation, like petitioner, cannot generally enter into a contract of partnership unless authorized by law or its charter, it has been held that it may enter into a joint venture which is akin to a particular partnership.

Under the “Power of Attorney”, petitioner and Baguio Gold undertook to contribute money, property and industry to the common fund known as the Sto. Niño mine. In this regard, we note that there is a substantive equivalence in the respective contributions of the parties to the development and operation of the mine. Pursuant to paragraphs 4 and 5 of the agreement, petitioner and Baguio Gold were to contribute equally to the joint venture assets under their respective accounts. Baguio Gold would contribute P11M under its owner’s account plus any of its

income that is left in the project, in addition to its actual mining claim. Meanwhile, petitioner’s contribution would consist of its expertise in the management and operation of mines, as well as the manager’s account which is comprised of P11M in funds and property and petitioner’s “compensation” as manager that cannot be paid in cash.

It should be stressed that the main object of the “Power of Attorney” was not to confer a power in favor of petitioner to contract with third persons on behalf of Baguio Gold but to create a business relationship between petitioner and Baguio Gold, in which the former was to manage and operate the latter’s mine through the parties’ mutual contribution of material resources and industry. The essence of an agency, even one that is coupled with interest, is the agent’s ability to represent his principal and bring about business relations between the latter and third persons. Where representation for and in behalf of the principal is merely incidental or necessary for the

proper discharge of one’s paramount undertaking under a contract, the latter may not necessarily be a contract of agency, but some other agreement depending on the ultimate undertaking of the parties.

5) Heirs of Jose Lim, represented by Elenito Lim, petitioners, vs. Juliet Villa Lim, respondent. 

G.R. 172690. March 3, 2010

FACTS:

Petitioners are the hiers of the late Jose Lim, namely: Jose’s widow Cresencia Palad (Cresencia); and their children Elenito, Evelia, Imelda, Edelyna and Edison, all surnamed Lim (petitioners), represented by Elenito Lim (Elenito). They filed a Complaint for Partition, Accounting and Damages against respondent Juliet Villa Lim (respondent), widow of the late Elfledo Lim (Elfledo), who was the eldest son of Jose and Cresencia.

On May 18, 1995, Elfledo died, leaving respondent as his sole surviving heir. Petitioners claimed that respondent took over the administration of the aforementioned properties, which belonged to the estate of Jose, without their consent and approval. Claiming that they are co-owners of the properties, petitioners required respondent to submit an accounting of all income, profits and rentals received from the estate of Elfledo, and to surrender the administration thereof. Respondent refused; thus, the filing of this case.

Petitioners alleged that sometime in 1980, Jose, together with his friends Jimmy and Nirberto, formed a partnership engaged in the trucking business.  Jose managed the operations of this trucking business until his death on August 15, 1981.  Thereafter, Jose's heirs, including El-fledo, and partners agreed to continue the business under the management of Elfledo. The shares in the partnership profits and income that formed part of the estate of Jose were held trust by Elfledo, with petitioners' authority for Elfledo to use, purchase or acquire properties using said funds. He was never a partner or an investor in the business and merely supervised the purchase of additional trucks using the income from the trucking business of the partners; hence, Elfredo is not a partner. and that Jimmy, the sole surviving partner testify that Elfledo was not a partner, and that he and Norberto entered into a partnership with Jose.

Respondent alleged that Elfledo was himself a partner of Norberto and Jimmy. Other than this trucking business, Elfledo, together with respondent, engaged in other business ventures. Thus, they were able to buy real properties and to put up their own car assembly and repair business. Respondent also alleged that when Jose died in 1981, he left no known assets, and the partnership with Jimmy and Norberto ceased upon his demise. Respondent also stressed that Jose left no properties that Elfledo could have held in trust. Respondent maintained that all the properties involved in this case were purchased and acquired through her and her husband’s joint efforts and hard work, and without any participation or contribution from petitioners or from Jose. Respondent submitted that these are conjugal partnership properties; and thus, she had the right to refuse to render an accounting for the income or profits of their own business.

Trial Court ruled in favor of the petitioner ordering partition of the properties and accounting of all incomes and profits received from said properties. 

CA reversed, set aside the RTC's decision, dismissing petitioners complaint for lack of merit. 

ISSUE: Whether Elfledo was himself the partner of Jimmy and Norberto

HELD:

Yes. 

A partnership exists when two or more persons agree to place their money, effects, labor, and skill in lawful commerce or business, with the understanding that there shall be a proportionate sharing of the profits and losses among them.

Undoubtedly, the best evidence would have been the contract of partnership or the articles of partnership. Unfortunately, there is none in this case, because the alleged partnership was never formally organized. Nonetheless, we are asked to determine who between Jose and Elfledo was the “partner” in the trucking business.

A careful review of the records persuades us to affirm the CA decision. The evidence presented by petitioners falls short of the quantum of proof required to establish that: (1) Jose was the partner and not Elfledo; and (2) all the properties acquired by Elfledo and respondent form part of the estate of Jose, having been derived from the alleged partnership.

Petitioners heavily rely on Jimmy’s testimony. But that testimony is just one piece of evidence against respondent. It must be considered and weighed along with petitioners’ other evidence vis-à-vis respondent’s contrary evidence.

Applying the legal provision to the facts of this case, the following circumstances tend to prove that Elfledo was himself the partner of Jimmy and Norberto: 1) Cresencia testified that Jose gave Elfledo P50,000.00, as share in the partnership, on a date that coincided with the payment of the initial capital in the partnership;15 (2) Elfledo ran the affairs of the partnership, wielding absolute control, power and authority, without any intervention or opposition whatsoever from any of petitioners herein;16 (3) all of the properties, particularly the nine trucks of the partnership, were registered in the name of Elfledo; (4) Jimmy testified that Elfledo did not receive wages or salaries from the partnership, indicating that what he actually received were shares of the profits of the business;17 and (5) none of the petitioners, as heirs of Jose, the alleged partner, demanded periodic accounting from Elfledo during his lifetime. As repeatedly stressed in Heirs of Tan Eng Kee,18 a demand for periodic accounting is evidence of a partnership.

WHEREFORE, the instant Petition is DENIED. The assailed Court of Appeals Decision dated June 29, 2005 is AFFIRMED. Costs against petitioners.