inpetitioners herein.

For purposes of the tax on corporations, our National Internal

EUFEMIA EVANGELISTA, MANUELA EVANGELISTA, and FRANCISCA Revenue Code, includes these partnerships
EVANGELISTA —
,petitioners, with the exception only of duly registered general copartnerships
vs. —
THE COLLECTOR OF INTERNAL REVENUE and THE COURT OFTAX APPEALS, within the purview of the term"corporation." It is, therefore, clear to our mind that
respondents. petitioners herein constitute a partnership, insofar as saidCode is concerned and
G.R. No. L-9996, October 15, 1957 are subject to the income tax for corporations

Facts:
Petitioners borrowed sum of money from their father and together with their own
personal funds theyused said money to buy several real properties. They then
Aurbach vs. Sanitary Wares
appointed their brother (Simeon) as manager of thesaid real properties with powers (Partnership; Joint Venture; Foreign and Domestic Corp)
and authority to sell, lease or rent out said properties to third persons. Theyrealized
rental income from the said properties for the period 1945-1949.On September 24, This consolidated petition assailed the decision of the CA directing a certain
1954 respondent Collector of Internal Revenue demanded the payment of income MANNER OF ELECTION OFOFFICERS IN THE BOARD OF DIRECTORS*There are
tax oncorporations, real estate dealer's fixed tax and corporation residence tax for two groups in this case, the Lagdameo group composed of Filipino investors and the
the years 1945-1949. The letter of demand and corresponding assessments were American Standard Inc. (ASI) composed of foreign investors.The ASI Group and
delivered to petitioners on December 3, 1954, whereupon theyinstituted the present petitioner Salazar (G.R. Nos. 75975-76) contend that the actual intention of
case in the Court of Tax Appeals, with a prayer that "the decision of the respondent theparties should be viewed strictly on the "Agreement" dated August 15,1962
contained in his letter of demand dated September 24, 1954" be reversed, and that wherein it is clearly statedthat the parties' intention was to form a corporation and
they be absolved from thepayment of the taxes in question. CTA denied their not a joint venture.
petition and subsequent MR and New Trials were denied.Hence this petition.
I: The main issue hinges on who were the duly elected directors of Saniwares for the
Issue: year 1983 during itsannual stockholders' meeting held on March 8, 1983.
Whether or not petitioners have formed a partnership and consequently, are subject
to the tax oncorporations provided for in section 24 of Commonwealth Act. No. 466, To answer this question the following factorsshould be determined:*(1) the nature of
otherwise known as the NationalInternal Revenue Code, as well as to the residence the business established by the parties whether it was a joint venture or a
tax for corporations and the real estate dealers fixed tax. corporationand

Held: YES.
The essential elements of a partnership are two, namely: (a)an agreement to While certain provisions of the Agreement would make it appear that the parties
contribute money,property or industry to a common fund; and (b) intent to divide thereto disclaim being partners or joint venturers such disclaimer is directed at
the profits among the contractingparties. The first element is undoubtedly present third parties and is notinconsistent with, and does not preclude, the existence of
in the case at bar, for, admittedly, petitioners have agreed to,and did, contribute two distinct groups of stockholders inSaniwares one of which (the Philippine
money and property to a common fund. Upon consideration of all the facts Investors) shall constitute the majority, and the other ASIshall constitute the
andcircumstances surrounding the case, we are fully satisfied that their purpose minority stockholder. In any event, the evident intention of the PhilippineInvestors
was to engage in real estatetransactions for monetary gain and then divide the same and ASI in entering into the Agreement is to enter into a joint venture enterprise
among themselves, because of the followingobservations, among others: (1) Said
common fund was not something they found already in existence; (2)They invested An examination of the Agreement shows that certain provisions were inccuded to
the same, not merely in one transaction, but in a series of transactions; (3) The protect theinterests of ASI as the minority. For example, the vote of 7 out of 9
aforesaid lotswere not devoted to residential purposes, or to other personal uses, of directors is required incertain enumerated corporate acts. ASI is contractually
petitioners herein.Although, taken singly, they might not suffice to establish the entitled to designate a member of theExecutive Committee and the vote of this
intent necessary to constitute a partnership, thecollective effect of these member is required for certain transactions
circumstances is such as to leave no room for doubt on the existence of said intent
The Agreement also requires a 75% super-majority vote for the amendment of the HELD: No. Unfortunately, the civil case was filed not against the real party in
articles andby-laws of Saniwares. ASI is also given the right to designate the interest. As pointed out by Aguila, he is not the real party in interest but rather it
president and plant manager.The Agreement further provides that the sales policy of was the partnership A.C. Aguila & Sons, Co. The Rules of Court provide that “every
Saniwares shall be that which isnormally followed by ASI and that Saniwares action must be prosecuted and defended in the name of the real party in interest.” A
should not export "Standard" products otherwisethan through ASI's Export real party in interest is one who would be benefited or injured by the judgment, or
Marketing Services. Under the Agreement, ASI agreed to providetechnology and who is entitled to the avails of the suit. Any decision rendered against a person who
know-how to Saniwares and the latter paid royalties for the same. is not a real party in interest in the case cannot be executed. Hence, a complaint
filed against such a person should be dismissed for failure to state a cause of
action, as in the case at bar.
The legal concept of a joint venture is of common law origin. It has no precise Under Art. 1768 of the Civil Code, a partnership “has a juridical personality
legal definitionbut it has been generally understood to mean an organization formed separate and distinct from that of each of the partners.” The partners cannot be
for some temporary purpose. It is in fact hardly distinguishable from the held liable for the obligations of the partnership unless it is shown that the legal
partnership, since their elements are similar community of interest in the business, fiction of a different juridical personality is being used for fraudulent, unfair, or
sharing of profits and losses, and a mutual right of control. illegal purposes. In this case, Felicidad 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 &
The main distinction cited by most opinions in common law jurisdictions is that the Sons, Co. It is the partnership, not its officers or agents, which should be impleaded
partnershipcontemplates a general business with some degree of continuity , in any litigation involving property registered in its name. A violation of this rule will
while the joint venture is formedfor the execution of a single transaction, and result in the dismissal of the complaint.
is thus of a temporary nature.

MENDIOLA vs. CA
Alfredo Aguila Jr vs Court of Appeals et al 497 SCRA 346, G.R. No. 159333, July 31, 2006, Puno, J.:p
Business Organization – Partnership, Agency, Trust – Identity Separate and Distinct FACTS: Private respondent Pacific Forest Resources, Phils., Inc. (Pacfor) is a
In April 1991, the spouses Ruben and Felicidad Abrogar entered into a loan corporation organized and existing under the laws of California, USA. Private
agreement with a lending firm called A.C. Aguila & Sons, Co., a partnership. The respondent Pacfor entered into a "Side Agreement on Representative Office known
loan was for P200k. To secure the loan, the spouses mortgaged their house and lot as Pacific Forest Resources (Phils.), Inc." with petitioner Arsenio T. Mendiola (ATM),
located in a subdivision. The terms of the loan further stipulates that in case of non- effective May 1, 1995, "assuming that Pacfor-Phils. is already approved by the
payment, the property shall be automatically appropriated to the partnership and a Securities and Exchange Commission [SEC] on the said date. Petitioner is not a
deed of sale be readily executed in favor of the partnership. She does have a 90 day part-owner of Pacfor Phils. because the latter is merely Pacfor-USA's representative
redemption period. office and not an entity separate and distinct from Pacfor-USA. "It's simply a
'theoretical company' with the purpose of dividing the income 50-50." Petitioner
Ruben died, and Felicidad failed to make payment. She refused to turn over the
presumably knew of this arrangement from the start, having been the one to
property and so the firm filed an ejectment case against her (wherein she lost). She
propose to private respondent Pacfor the setting up of a representative office, and
also failed to redeem the property within the period stipulated. She then filed a civil
"not a branch office" in the Philippines to save on taxes. On November 27, 2000,
case against Alfredo Aguila, manager of the firm, seeking for the declaration of
private respondent Pacfor, through counsel, ordered petitioner to turn over to it all
nullity of the deed of sale. The RTC retained the validity of the deed of sale. The
papers, documents, files, records, and other materials in his or ATM Marketing
Court of Appeals reversed the RTC. The CA ruled that the sale is void for it is
Corporation's possession that belong to Pacfor or Pacfor Phils. Petitioner construed
a pactum commissorium sale which is prohibited under Art. 2088 of the Civil Code
these directives as a severance of the "unregistered partnership" between him and
(note the disparity of the purchase price, which is the loan amount, with the actual
Pacfor, and the termination of his employment as resident manager of Pacfor
value of the property which is after all located in a subdivision).
Phils private respondent Pacfor placed petitioner on preventive suspension and
ISSUE: Whether or not the case filed by Felicidad shall prosper. ordered him to show cause why no disciplinary action should be taken against him.
Petioner was dismissed.
 1946, she had entered into an agreement with the defendants to engage in business
ISSUE: WON there is partnership or employer-employee relationship? through the execution of a document denominated as "Acknowledgement of
Participating Capital”. Antonieta also alleged that she had helped in the
HELD: We hold that petitioner is an employee of private respondent Pacfor and that management of the business they co-owned without receiving any salary. Antonieta
no partnership or co-ownership exists between the parties. further claimed co-ownership of certain properties (the subject real properties) in
the name of the defendants since the only way the defendants could have purchased
In a partnership, the members become co-owners of what is contributed to the firm these properties were through the partnership as they had no other source of
capital and of all property that may be acquired thereby and through the efforts of income.The respondents did not deny the existence and validity of the
the members. The property or stock of the partnership forms a community of goods, "Acknowledgement of Participating Capital" and in fact used this as evidence to
a common fund, in which each party has a proprietary interest. In fact, the New
support their claim that Antonieta’s 8% share was limited to the businesses
Civil Code regards a partner as a co-owner of specific partnership property. Each
partner possesses a joint interest in the whole of partnership property. If the enumerated therein. The respondents denied using the partnership’s income to
relation does not have this feature, it is not one of partnership. This essential purchase the subject real properties.
element, the community of interest, or co-ownership of, or joint interest in
partnership property is absent in the relations between petitioner and private During the course of the trial at the RTC, petitioner Federico Jarantilla, Jr., who
respondent Pacfor. Petitioner is not a part-owner of Pacfor Phils. William Gleason, was one of the original defendants, entered into a compromise agreement 17 with
private respondent Pacfor's President established this fact when he said that Pacfor
Antonieta Jarantilla wherein he supported Antonieta’s claims and asserted that he
Phils. is simply a "theoretical company" for the purpose of dividing the income 50-
50. He stressed that petitioner knew of this arrangement from the very start, having too was entitled to six percent (6%) of the supposed partnership in the same manner
been the one to propose to private respondent Pacfor the setting up of a as Antonieta was.
representative office, and "not a branch office" in the Philippines to save on taxes.
Thus, the parties in this case, merely shared profits. This alone does not make a ISSUE: Whether or not the partnership subject of the Acknowledgement of
partnership. Participating Capital funded the subject real properties.

Besides, a corporation cannot become a member of a partnership in the absence of

HELD: Under Article 1767 of the Civil Code, there are two essential elements in a
express authorization by statute or charter. This doctrine is based on the following
considerations: (1) that the mutual agency between the partners, whereby the contract of partnership: (a) an agreement to contribute money, property or industry to
corporation would be bound by the acts of persons who are not its duly appointed a common fund; and (b) intent to divide the profits among the contracting parties. The
and authorized agents and officers, would be inconsistent with the policy of the law first element is undoubtedly present in the case at bar, for, admittedly, all the
that the corporation shall manage its own affairs separately and exclusively; and, (2) parties in this case have agreed to, and did, contribute money and property to a
that such an arrangement would improperly allow corporate property to become common fund. Hence, the issue narrows down to their intent in acting as they did. It
subject to risks not contemplated by the stockholders when they originally invested is not denied that all the parties in this case have agreed to contribute capital to a
in the corporation. No such authorization has been proved in the case at bar.
common fund to be able to later on share its profits. They have admitted this fact,
agreed to its veracity, and even submitted one common documentary evidence to
JARANTILLA, JR. vs. JARANTILLA prove such partnership - the Acknowledgement of Participating Capital. The
636 SCRA 299, G.R. No. 154486, December 1, 2010, Leonardo-De Castro, J.:p petitioner himself claims his share to be 6%, as stated in the Acknowledgement of
Participating Capital. However, petitioner fails to realize that this document
specifically enumerated the businesses covered by the partnership: Manila Athletic
FACTS: The present case stems from the complaint filed by Antonieta Jarantilla Supply, Remotigue Trading in Iloilo City and Remotigue Trading in Cotabato City.
against Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Since there was a clear agreement that the capital the partners contributed went to
Doroteo Jarantilla and Tomas Jarantilla, for the accounting of the assets and the three businesses, then there is no reason to deviate from such agreement and go
income of the co-ownership, for its partition and the delivery of her share beyond the stipulations in the document. There is no evidence that the subject real
corresponding to eight percent (8%), and for damages. Antonieta claimed that in
properties were assets of the partnership referred to in the Acknowledgement of
Participating Capital. Petition denied. 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. A contract of partnership is defined by the Civil Code as one
HEIRS OF JOSE LIM vs. JULIET VILLA LIM where two or more persons bind themselves to contribute money, property, or
614 SCRA 141, G.R. No. 172690, March 3, 2010, Nachura, J.:p industry to a common fund, with the intention of dividing the profits among
themselves.
FACTS: Petitioners are the heirs of the late Jose Lim (Jose). They filed a Complaint
for Partition, Accounting and Damages against respondent Juliet Villa Lim The following circumstances tend to prove that Elfledo was himself the partner of
(respondent), widow of the late Elfledo Lim (Elfledo), who was the eldest son of Jose Jimmy and Norberto: 1) Cresencia testified that Jose gave Elfledo P50,000.00, as
and Cresencia. share in the partnership, on a date that coincided with the payment of the initial
capital in the partnership; (2) Elfledo ran the affairs of the partnership, wielding
Petitioners alleged that Jose was the liaison officer of Interwood Sawmill in Cagsiay, absolute control, power and authority, without any intervention or opposition
Mauban, Quezon. Sometime in 1980, Jose, together with his friends Jimmy Yu whatsoever from any of petitioners herein; (3) all of the properties were registered in
(Jimmy) and Norberto Uy (Norberto), formed a partnership to engage in the name of Elfledo; (4) Jimmy testified that Elfledo did not receive wages or salaries
the trucking business. Initially, with a contribution of P50,000.00 each, they from the partnership, indicating that what he actually received were shares of the
purchased a truck to be used in the hauling and transport of lumber of the sawmill. profits of the business; and (5) none of the petitioners, as heirs of Jose, the
Jose managed the operations of this trucking business until his death on August alleged partner, demanded periodic accounting from Elfledo during his lifetime.
15, 1981. Thereafter, Jose's heirs, including Elfledo, and partners agreed to
continue the business under the management of Elfledo. The shares in the Furthermore, petitioners failed to adduce any evidence to show that the real and
partnership profits and income that formed part of the estate of Jose were held in personal properties acquired and registered in the names of Elfledo and Juliet
trust by Elfledo, with petitioners' authority for Elfledo to use, purchase or acquire formed part of the estate of Jose, having been derived from Jose’s alleged
properties using said funds. Petitioners alleged that Elfledo was never a partner or partnership with Jimmy and Norberto.
an investor in the business and merely supervised the purchase of additional trucks
using the income from the trucking business of the partners.
The extent of his control, administration and management of the partnership and its
On May 18, 1995, Elfledo died, leaving respondent as his sole surviving heir. business, the fact that its properties were placed in his name, and that he was not
Petitioners claimed that respondent took over the administration of the paid salary or other compensation by the partners, are indicative of the fact that
aforementioned properties, which belonged to the estate of Jose, without their Elfledo was a partner and a controlling one at that. It is apparent that the other
consent and approval. Claiming that they are co-owners of the properties, partners only contributed in the initial capital but had no say thereafter on how the
petitioners required respondent to submit an accounting of all income, profits and business was ran. Evidently it was through Elfredo’s efforts and hard work that the
rentals received from the estate of Elfledo, and to surrender the administration partnership was able to acquire more trucks and otherwise prosper. Even the
thereof. Respondent refused; thus, the filing of this case. appellant participated in the affairs of the partnership by acting as the bookkeeper
sans salary.
Respondent traversed petitioners' allegations and claimed that Elfledo was himself a
partner of Norberto and Jimmy. Respondent also alleged that when Jose died in
ANTONIA TORRES vs. COURT OF APPEALS
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 320 SCRA 428, G.R. No. 134559 December 9, 1999, Panganiban, J.:p
Elfledo could have held in trust. Respondent maintained that all the FACTS: In 1969, sisters Antonia Torres and Emeteria Baring entered into a joint
properties involved in this case were purchased and acquired through her and her venture agreement with Manuel Torres. Under the agreement, the sisters agreed to
husband’s joint efforts and hard work, and without any participation
execute a deed of sale in favor Manuel over a parcel of land, the sisters received no
or contribution from petitioners or from Jose.
cash payment from Manuel but the promise of profits (60% for the sisters and 40%
ISSUE: Whether or not a partnership exists. for Manuel) – said parcel of land is to be developed as a subdivision.
Manuel then had the title of the land transferred in his name and he subsequently against OQF. PFG also alleged that OQF is a non-existent corporation by virtue of a
mortgaged the property. He used the proceeds from the mortgage to start building certification by the SEC. RTC issued the writ of attachment on the nets, and was
sold at a public auction with the proceeds deposited to the court. RTC ruled there
roads, curbs and gutters. Manuel also contracted an engineering firm for the
was partnership between the three (Chua, Yao, Lim) anchoring on the Compromise
building of housing units. But due to adverse claims in the land, prospective buyers
Agreement they executed in the civil case filed by Chua and Yao against Lim for the
were scared off and the subdivision project eventually failed. declaration of ownership of the fishing boats, among other things. CA affirmed.
The sisters then filed a civil case against Manuel for damages equivalent to 60% of ISSUE: Whether or not by their acts, Lim, Chua, and Yao are deemed to have
the value of the property, which according to the sisters, is what’s due them as per entered into a partnership.
the contract. HELD: Yes. A partnership is a contract where two or more persons bind themselves
The lower court ruled in favor of Manuel and the Court of Appeals affirmed the lower to contribute money, property, or industry to a common fund, with the intention of
court. dividing the profits among themselves. The three engaged in a commercial venture
The sisters then appealed before the Supreme Court where they argued that there is for commercial fishing and contracted loans to buy two fishing boats, and the nets
and floats needed to operate the fishing business. In their Compromise Agreement,
no partnership between them and Manuel because the joint venture agreement is
they subsequently revealed their intention to pay the loan with the proceeds of the
void.
sale of the boats, and to divide equally among them the excess or loss. These boats,
ISSUE: Whether or not there exists a partnership. the purchase and the repair of which were financed with borrowed money, fell under
HELD: Yes. The joint venture agreement the sisters entered into with Manuel is a the term "common fund" under Article 1767. The contribution to such fund need
partnership agreement whereby they agreed to contribute property (their land) not be cash or fixed assets; it could be an intangible like credit or industry. That the
which was to be developed as a subdivision. While on the other hand, though parties agreed that any loss or profit from the sale and operation of the boats would
Manuel did not contribute capital, he is an industrial partner for his contribution be divided equally among them also shows that they had indeed formed a
for general expenses and other costs. Furthermore, the income from the said project partnership. It extended to the fishing nets and the floats, both essential to fishing,
would be divided according to the stipulated percentage (60-40). Clearly, the which were obviously acquired in furtherance of their business.
Petitioner’s defense that he was a mere lessor does not hold water. In effect, he
contract manifested the intention of the parties to form a partnership. Further still,
would like this Court to believe that he consented to the sale of his own boats to pay
the sisters cannot invoke their right to the 60% value of the property and at the
a debt of Chua and Yao, with the excess of the proceeds to be divided among the
same time deny the same contract which entitles them to it. three of them. No lessor would do what petitioner did. Indeed, his consent to the
At any rate, the failure of the partnership cannot be blamed on the sisters, nor can sale proved that there was a preexisting partnership among all three.
it be blamed to Manuel (the sisters on their appeal did not show evidence as to Corporation by estoppels: Although the partnership/corporation was never legally
Manuel’s fault in the failure of the partnership). The sisters must then bear their formed for unknown reasons, this fact alone does not preclude the liabilities of the
loss (which is 60%). Manuel does not bear the loss of the other 40% because as an three as contracting parties in representation of it. Clearly, under the law on
industrial partner he is exempt from losses. estoppel, 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.

LIM TONG LIM vs. PHILIPPINE FISHING GEAR INDUSTRIES, INC. ONA vs. CIR
45 SCRA 24, G.R. No. L-19342 May 25, 1972, Barredo, J.:p
317 SCRA 728, G.R. No. 136448, Nov. 3, 1999, Panganiban, J.:p
FACTS: Julia Bunales died leaving as heirs her husband, petitioner Lorenzo, and
FACTS: Antonio Chua and Peter Yap bought nets of various sizes and floats from her five children. Lorenzo was appointed as the administrator of his wife’s estate
Philippine Fishing Gear (PFG) for Ocean Quest Fishing Corporation (OQF), saying and also the guardian of their three minor children. Although the project of partition
that petitioner was also involved with OQF despite not being a signatory to the was approved by the court, there was no attempt to divide the properties. The
agreement. They failed to pay the purchase price, hence PFG filed a collection case properties remained under the management of Lorenzo who used it in business by
leasing or selling them and investing the income or proceeds derived therefrom in FACTS: Nenita A. Anay met petitioner William T. Belo. Belo introduced Anay to
real properties and securities. As a result, petitioner’s properties and investments petitioner Marjorie Tocao, who conveyed her desire to enter into a joint venture with
increased. Petitioners did not actually receive their shares in the yearly income. The her for the importation and local distribution of kitchen cook wares. Belo
income was always left in the hands of Lorenzo T. Oña who, as heretofore pointed volunteered to finance the joint venture and assigned to Anay the job of marketing
out, invested them in real properties and securities. The Commissioner of Internal
the product considering her experience and established relationship with West Bend
Revenue (CIR) decided that petitioners formed an unregistered partnership and
Company, a manufacturer of kitchen wares in Wisconsin, U.S.A. Under the joint
therefore subject to corporate income tax.
venture, Belo acted as capitalist, Tocao as president and general manager, and Anay
ISSUE: WON the petitioners formed an unregistered partnership as head of the marketing department and later, vice-president for sales. Anay
organized the administrative staff and sales force while Tocao hired and fired
HELD: Petitioners did not merely limit themselves to holding the properties employees, determined commissions and/or salaries of the employees, and assigned
inherited by them. In fact, some were sold at considerable profit, and with said them to different branches. The parties agreed that Anay would be entitled to: 1. ten
profit, petitioners engaged, thru Lorenzo T. Oña, in the purchase and sale of percent (10%) of the annual net profits of the business; 2. overriding commission of
corporate securities. It is likewise admitted that all the profits from these ventures six percent (6%) of the overall weekly production; 3. thirty percent (30%) of the sales
were divided among petitioners proportionately in accordance with their respective she would make; and 4. two percent (2%) for her demonstration services.
shares in the inheritance. It is thus manifest that there was a common fund to
undertake several businesses, with the intention of deriving profit to be shared by
Anay having secured the distributorship of cookware products from the West Bend
them proportionally, such act was tantamount to actually contributing such
Company and organized the administrative staff and the sales force, the cookware
incomes to a common fund and, in effect, they thereby formed an unregistered
partnership. business took off successfully. They operated under the name of Geminesse
Enterprise, a sole proprietorship registered in Marjorie Tocao's name.
Petitioners' reliance on Article 1769, paragraph (3), of the Civil Code, providing that:
"The sharing of gross returns does not of itself establish a partnership, whether or On October 9, 1987, Anay learned that Marjorie Tocao had signed a letter addressed
not the persons sharing them have a joint or common right or interest in any to the Cubao sales office to the effect that she was no longer the vice-president of
property from which the returns are derived," is unavailing. In Evangelista case, the Geminesse Enterprise.
SC clearly differentiated the concept of partnerships under the Civil Code from that
of unregistered partnerships which are considered as "corporations" under Sections
ISSUE: Whether or not Anay was a partner of Tocao and Belo.
24 and 84(b) of the National Internal Revenue Code. Mr. Justice Roberto
Concepcion, now Chief Justice, elucidated on this point thus: "To begin with, the
tax in question is one imposed upon 'corporations', which, strictly speaking, are HELD: Yes. Anay is an industrial partner. Tocao and Belo admitted that Anay had
distinct and different from 'partnerships'. When our Internal Revenue Code includes the expertise to engage in the business of distributorship of cookware. Anay
'partnerships' among the entities subject to the tax on 'corporations', said Code contributed such expertise to the partnership and, hence, under the law, she was
must allude, therefore, to organizations which are not necessarily 'partnerships', in the industrial or managing partner. It was through her reputation that the
the technical sense of the term. Thus, for instance, section 24 of said Code exempts partnership was able to open the business of distributorship; it was through the
from the aforementioned tax 'duly registered general partnerships', which constitute same efforts that the business was propelled to financial success. Moreover, Anay
precisely one of the most typical forms of partnerships in this jurisdiction. Likewise,
had a voice in the management of the affairs of the business, including selection of
as defined in section 84(b) of said Code, 'the term corporation includes
partnerships, no matter how created or organized.' This qualifying expression clearly people who would constitute the administrative staff and the sales force. Likewise,
indicates that a joint venture need not be undertaken in any of the standard forms, Tocao admitted that, like her who owned Gimenesse Enterprises, Anay received only
or in conformity with the usual requirements of the law on partnerships, in order commissions and transportation and representation allowances and not a fixed
that one could be deemed constituted for purposes of the tax on corporation. salary. If indeed Tocao was Anay's employer, it was difficult to believe that they shall
receive the same income in the business.

BELO vs. CA and ANAY

342 SCRA 20, G.R. No. 127405, October 4, 2000, Ynares-Santiago, J.:p