CHAPTER 1 - GENERAL PROVISIONS

PARTNERSHIP

CHAPTER 1
GENERAL PROVISIONS

Art. 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.

Two or more persons may also form a partnership for the

exercise of a profession. (1665a)

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.1

Meaning of profession
Profession is "a group of men pursuing a learned art as a common calling
in the spirit of public service, - no less a public service because it may incidentally
be a means of livelihood. "2

Essential requisites of a contract of partnership

1. There must be a valid contract;
2. There must be a contribution of money, property, or industry to a
common fund;
3. The partnership must be organized for gain or profit; and
4. The partnership should have a lawful object or purpose, and must be
established for the common benefit or interest of the partners.

What are the two tests to determine the existence of a partnership?

1. First test
Determine whether or not there is an agreement to contribute money,
property or industry to a common fund.
2. Second test
Determine whether or not there is an intent of the contracting parties to
divide the profits among themselves.

PARTNERSHIP - A JURIDICAL PERSON

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

1 Heirs of Jose Lim vs. Juliet Villa Lim, G.R. No. 172690, March 3, 2010.
2 In the matter of the Petition for Authority to Continue Use of the Firm Name "Sycip, et.al., July 30, 1979.
<:IIAP'l rm . GENERAL PROVISIONS CIIJ\PTER 1 - GENERAL PROVISIONS

o th partners to divide the profits among themselves. It may be constituted lndustry

n ny form; a public instrument is necessary only where immovable property Diligence in the performance of a task. A particular form or branch
r real rights are contributed thereto. This implies that since a contract of f productive labor. 6
partnership is consensual, an oral contract of partnership is as good as a
written one. Where no immovable property or real rights are involved, what Problem:
matters is that the parties have complied with the requisites of a Sisters X and Y, entered into a "Joint Venture Agreement (JVA)"
partnership. 3 with Z for the development of a parcel of land into a subdivision.
Pursuant to the contract, they executed a Deed of Sale covering the said
Characteristics of a contract of partnership parcel of land in favor of Z, who then had it registered in his name. By
1. Consensual mortgaging the property, Z obtained from Q Bank a loan of P400,000
It is a contract that is perfected by mere consent because all of the partners which, under the JVA, was to be used for the development of the
had a meeting of minds to enter into a contract of partnership. subdivision. All three of them also agreed to share the proceeds from the
2. Commutative sale of the subdivided lots.
The contribution of each partner, whether money, property or industry, is The project was not realized, and the land was subsequently
considered as the equivalent of the contribution of the other partners. foreclosed by Q bank.
3. Principal Is there partnership?
It is a contract that does not depend on other contracts for its existence. Answer:
4. Bilateral A reading of the terms embodied in the Agreement indubitably
It is a contract entered into by two or more persons. shows the existence of a partnership pursuant to Article 17 6 7 of the Civil
5. Onerous Code, which provides:
Each partner must contribute money, property, or industry. Of course, a
partner can contribute one, some or all of these. ART. 1767. By the contract of partnership two or more persons
6. Nominate bind themselves to contribute money, property, or industry to a common
It is a contract which has a name in law. fund, with the intention of dividing the profits among themselves.
7. Preparatory
It is a contract in preparation for another contract or contracts. Under the above-quoted Agreement, X and Y would contribute
property to the partnership in the form of land which was to be
Example: developed into a subdivision; while Z would give, in addition to his
A and B entered into a contract of partnership for the purpose of industry, the amount needed for general expenses and other
selling furniture. In this case, A and B initially entered into a contract of costs. Furthermore, the income from the said project would be divided
partnership in preparation for contract of sale. according to the stipulated percentage. Clearly, the contract manifested
the intention of the parties to form a partnership.
Money It should be stressed that the parties implemented the
The medium of exchange authorized or adopted by a government as contract. Thus, X and Y transferred the title to the land to facilitate its use
part of its currency. 4 in the name of Z. On the other hand, Z caused the subject land to be
mortgaged, the proceeds of which were used for the survey and the
Property subdivision of the land. Z developed the roads, the curbs, and the gutters
Any external thing over which the rights of possession, use, and of the subdivision.
enjoyment are exercised. 5 Z's actions clearly belie X and Y's contention that he made no
contribution to the partnership. Under Article 1767 of the Civil Code, a
partner may contribute not only money or property, but also industry.7

3 Marjorie Tocao and William T. Belo vs. CA and Nenita A. Anay, G.R. No. 127405, October 4, 2000.
•seep. 1158, Black's Law Dictionary, Tenth Edition. 6 see p. 1410, Black's Law Dictionary, Tenth Edition.
s seep. 1410, Black's Law Dictionary, Tenth Edition. 7
see Antonia Torres and Emeteria Baring vs. CA and Manuel Torres, G.R. No. 134559, December 9, 1999.

?
UIAl''l'HR :t, - GENERAL PROVISIONS CHAPTER 1 - GENERAL PROVISIONS

P u·ln rshlp vs. Joint Venture one has the right to select the person or persons with one whom one might
A partnership exists when two or more persons agree to place their form a partnership.11
m n y, effects, labor, and skill in lawful commerce or business, with the
u nd rstanding that there shall be a proportionate sharing of the profits and Partnership at will
I es between them. A contract of partnership is defined by the Civil Code as . A ~artnership that does not fix its term is a partnership at will. The
one where two or more persons bound themselves to contribute money, birth and hfe of a partnership at will is predicated on the mutual desire and
property, or industry to a common fund with the intention of dividing the consent of the partners. The right to choose with whom a person wishes to
profits among themselves. A joint venture, on the other hand, is hardly associate himself is the very foundation and essence of that partnership.12
distinguishable from, and may be likened to, a partnership since their
elements are similar, i.e., community of interests in the business and sharing Problem:
of profits and losses. Being a form of partnership, a joint venture is generally A contract of partnership of a law firm has the following
governed by the law on partnership. 8 provisions, among others:

DOCTRINE OF DELECTUS PERSONAE 1. ". The purpose for which the partnership is formed, is to act as legal
The right to choose with whom a person wishes to associate adviser and representative of any individual, firm, and corporation
himself is the very foundation and essence of partnership. Its continued engaged in commercial, industrial or other lawful businesses and
existence is, in turn, dependent on the constancy of that mutual resolve, along occup~tions; to counsel and advise such persons and entities with respect
with each partner's capability to give it, and the absence of cause for to their legal and other affairs; and to appear for and represent their
dissolution provided by the law itself. Verily, any one of the partners may, at principals and client in all courts ofjustice and government departments
his sole pleasure, dictate a dissolution of the partnership at will. He must, and offices in the Philippines, and elsewhere when legally authorized to do
so." and
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 2. "The partnership shall continue so long as mutually satisfactory and
damages. 9 upon the death or legal incapacity ofone of the partners, shall be continued
by the surviving partners."
An unjustified dissolution by a partner can subject him to action for
damages because by the mutual agency that arises in a partnership, the Is the purpose of the partnership, as stated in its Articles of
doctrine of delectus personae allows the partners to have partnership, the sole determinant if it is a partnership for a particular
undertaking?
the power, although not necessarily the right to dissolve the partnership.
Answer:
Among partners, mutual agency arises and the doctrine of delectus
personae allows them to have the power, although not necessarily the right, The '.'purpose" of the partnership is notthe specific undertaking
to dissolve the partnership. An unjustified dissolution by the partner can referred to m the law. Otherwise, all partnerships, which necessarily
subject him to a possible action for damages. 10 mu~t- have a purpose, would all be considered as partnerships for a
de~1mte undertakmg. There would, therefore, be no need to provide for
articles on partnership at will as none would so exist. Apparently what
Delectus personarum ("choice of persons") or delectus personae ("Choice
of the person") the law contemplates, is a specific undertaking or "project" which has a
definite or definable period of completion.13
The rule that when personal relations are important, a person cannot Problem:
be compelled to associate with another person; specifically, the principle that
On behalf of "Q Corp.," X and Y entered into a contract, for the
purchase of fishing nets of various sizes from G, Inc. They claimed that
they were engaged in a business venture with Z, who, however, was not
8 166299-300, December 13, 2005.
Aurelio K Litonjua, Jr. vs. Eduardo K. Litonjua, Sr. et.al., G.R. Nos.
11
seep. 518, Black's Law Dictionary, Tenth Edition.
9 127405, October 4, 2000.
Marjorie Toca o and William T. Belo vs. CA and Nenita A. Anay, G.R. No.
12
Gregorio F. Ortega, et.al. vs. CA, G.R. No.109248, July 3, 1995.
109248,
10 Gregorio F. Ortega, et.al. vs. CA, G.R. No. 1995.
July 3, 13
109248, July 3, 1995.
see Gregorio F. Ortega, et.al. vs. CA, G.R. No.
CIIAPTtm 1 - GENERAL PROVISIONS
. CHAPTER 1 - GENERAL PROVISIONS

ignatory to the agreement. The total price of the nets amounted to

P532,O45. 400 pieces of floats worth P68,O0O were also sold to the Corp.
The buyers, however, failed to pay for the fishing nets and the Art. 1768. The partnership has a judicial personality separate and
floats; hence, G, Inc. filed a collection suit against X, Y and Z. The suit was distinct from that of each of the partners, even in case of failure to
brought against the three in their capacities as general partners, on the comply with the requirements of Article 1772, first paragraph. (n)
allegation that "Q Corp." was a nonexistent corporation as shown by a
Certification from the Securities and Exchange Commission. Article 1772 of the New Civil Code (NCC) states:
Instead of answering the Complaint, X filed a Manifestation
admitting his liability. Y and Z filed their Answer. Art. 1772. Every contract of partnership having a capital of three thousand
The trial court ordered the sale of the fishing nets at a public pesos or more, in money or property, shall appear in a public instrument,
auction. G, Inc. won the bidding and deposited with the said court the which must be recorded in the Office of the Securities and Exchange
sales proceeds of P9OO,OOO. Commission.
Are the acts of X, Y and Z deemed to have entered into a
partnership? Failure to comply with the requirements of the preceding paragraph shall
Answer:
not affect the liability of the partnership and the members thereof to third
It is clear that X, Y and Z had decided to engage in a fishing persons.
business, which they started by buying boats. In their Compromise
Agreement, X, Y and Z subsequently revealed their intention to pay the ARTIFICIAL PERSON/ JURIDICAL PERSON
loan with the proceeds of the sale of the boats, and to divide equally An entity, such as a corporation, created by law and given certain
among them the excess or loss. These boats, the purchase and the repair legal rights and duties of a human being; a being, real or imaginary, who for
of which were financed with borrowed money, fell under the term the purpose of legal reasoning is treated more or less as a human being.16
"common fund" under Article 1767. The contribution to such fund need
Example:
not be cash or fixed assets; it could be an intangible like credit or industry.
That the parties agreed that any loss or profit from the sale and operation A, B, and C entered into a contract of partnership named ABC
Partnership. In here, there are four persons, that is three natural persons (A, B,
of the boats would be divided equally among them also shows that they
and CJ and one juridical person (ABC Partnership).
had indeed formed a partnership.
Moreover, it is clear that the partnership extended not only to the Thus, ABC Partnership can:
purchase of the boat, but also to that of the nets and the floats. The fishing 1. acquire and possess real and personal property;
nets and the floats, both essential to fishing, were obviously acquired in 2. incur obligations; and
furtherance of their business. It would have been inconceivable for Z to 3. bring civil or criminal actions.17
involve himself so much in buying the boat but not in the acquisition of
the aforesaid equipment, without which the business could not have Problem:
proceeded. 14 X introduced Z to Y, who conveyed her desire to enter into a joint
venture with her for the importation and local distribution of kitchen
BEST EVIDENCE OF THE EXISTENCE OF A PARTNERSHIP cookwares. X volunteered to finance the joint venture and assigned to z
In !dos v. Court ofAppeals, the Supreme Court said: the job of marketing the product considering her experience and
established relationship with W Co., a manufacturer of kitchen wares in
The best evidence of the existence of the partnership, which was not the U.S.A. Under the joint venture, X acted as capitalist, Y as president and
yet terminated [though in the winding up stage}, were the unsold goods and general manager, and Z as vice-president for sales. Z organized the
uncollected receivables, which were presented to the trial court. Since the administrative staff and sales force while Y hired and fired employees,
partnership has not been terminated, the petitioner and private determined commissions and/or salaries of the employees, and assigned
complainant remained as co-partners.xx x.1 5 them to different branches. The parties agreed that X's name should not

14 s ee Lim Tong Lim vs. Philippine Fishing Gear Industries, Inc., G.R. No. 136448, November 3, 1999.
15 cited in Marjorie Tocao and William T. Belo vs. CA and Nenita A Anay, G.R. No. 127405, October 4, 2000. 16 seep. 1325, Black's Law Dictionary, Tenth edition.
11 Art. 46, New Civil Code (NCC).
CHAPTER 1 - GENERAL PROVISIONS II l'THR - GENERAL PROVISIONS

appear in any documents relating to their transactions with W ht tw n the parties. In the first place, Z had a voice in the management
Company. Instead, they agreed to use Z's name in securing of Ih affairs of the cookware distributorship, including selection of
distributorship of cookware from that company. The parties agreed p c>ple who would constitute the administrative staff and the sales force.
further that Z would be entitled to: (1) 10% of the annual net profits of S ondly, Y's admissions militate against an employer-employee
the business; (2) commission of 6% of the overall weekly production; (3) r lationship. She admitted that Z received only commissions and
30% of the sales she would make; and (4) 2% for her demonstration tr nsportation and representation allowances and not a fixed salary.
services. The agreement was not reduced to writing on the strength of X Undoubtedly, Y unilaterally excluded Z from the parj:nership to
assurances that he was sincere, dependable, and honest when it came to r ap for herself and/or for X financial gains resulting from Z's efforts to
financial commitments. make the business venture a success. Her instruction to the marketing
Z having secured the distributorship of cookware products from manager, not to allow Z to hold office in both the Makati and Cubao sales
W Co. and organized the administrative staff and the sales force, the offices concretely spoke of her perception that Z was no longer necessary
cookware business took off successfully. They operated under the name In the business operation, and resulted in a falling out between the two.
of Y Enterprise, a sole proprietorship registered in Y's name. X made good However, a mere falling out or misunderstanding between partners does
his monetary commitments to Z. not convert the partnership into a sham organization. The partnership
Subsequently, Z learned that Y had signed a letter addressed to exists until dissolved under the law. Since the partnership created by X
the Cubao sales office to the effect that she was no longer the vice- and Y and Z has no fixed term and is therefore a partnership at will
president of Y Enterprise. The following day, she received a note that Y predicated on their mutual desire and consent, it may be dissolved by the
had barred her from holding office and conducting demonstrations in will of a partner.is
both Makati and Cubao offices. Consequently, Z filed a complaint against
Xand Y. Problem:
Does partnership exist? X filed a complaint against V and Y, daughter and wife,
Answer: respectively of the deceased Z, for Winding Up of Partnership Affairs and
The fact that there appears to be no record in the Securities and Accounting.
Exchange Commission of a public instrument embodying the partnership X alleged that he verbally entered into a partnership with Zin the
agreement pursuant to Article 1772 of the Civil Code did not cause the distribution of LPG in Manila. For business convenience, X and Z allegedly
nullification of the partnership. The pertinent provision of the Civil Code agreed to register the business name of their partnership, Shellite, under
on the matter states: the name of Z as a sole proprietorship. The partnership allegedly had z as
manager. As compensation, Z would receive a manager's fee of 10% of
Art. 1768. The partnership has a juridical personality separate and the gross profit.
distinct from that of each of the partners, even in case of failure to Allegedly, from the time that Shellite opened for business, its
comply with the requirements of article 1772, first paragraph. business operation was profitable.
Upon Z's death, his surviving wife, Y and particularly his
X and Y admitted that Z had the expertise to engage in the daughter, V, took over the operations and management of Shellite
business of distributorship of cookware. Z contributed such expertise to without X's consent. Despite X's repeated demands upon Y and V for
the partnership and hence, under the law, she was the industrial or accounting and winding up of the partnership, Y and V failed to comply.
managing partner. It was through her reputation with W Co. that the Did X and Z enter into a contract of partnership?
partnership was able to open the business of distributorship of that Answer:
company's cookware products; it was through the same efforts that the The action for accounting filed by X 3 years after Z's death was
business was propelled to financial success. well within the prescribed period. The Civil Code provides that an action
The business venture operated under Y Enterprise did not result to enforce an oral contract prescribes in 6 years while the right to
in an employer-employee relationship between X and Y and Z. While it is demand an accounting for a partner's interest as against the person
true that the receipt of a percentage of net profits constitutes only prima continuing the business accrues at the date of dissolution, in the absence
facie evidence that the recipient is a partner in the business, the evidence
in the case at bar controverts an employer-employee relationship 18
see Marjorie Tocao and William T. Belo vs. CA and Nenita A. Anay, G.R. No. 127405, October 4, 2000.
CHAPTER 1 - GENERAL PROVISIONS IIA l'TER 1 - GENERAL PROVISIONS

of any contrary agreement. Considering that the death of a partner (d) ~s interest on a loan, though the amount of payment vary
results in the dissolution of the partnership, in this case, it was Z's death with the profits of the business;
that X as the surviving partner had the right to an account of his interest (e) As the consideration for the sale of a goodwill of a business
as against V and Y. or other property by installments or otherwise. (n)
In a desperate bid to cast doubt on the validity of the oral
partnership between X and Z, Y and V maintain that said partnership that Ibale 1: Persons who are not partners as to each other are not partners
had initial capital of P200,000 should have been registered with the to third persons
Securities and Exchange Commission (SEC) since registration is
mandated by the Civil Code, True, Article 1772 of the Civil Code requires Example:
that partnerships with a capital of P3,000.00 or more must register with . X and Y are not partners as to each other. Thus, as to z, a third person,
the SEC, however, this registration requirement is not mandatory. Article it follows that they are not also partners.
1768 of the Civil Code explicitly provides that the partnership
retains its juridical personality even if it fails to register. The failure The exception is that ifX misrepresents to Z that they are partners with
to register the contract of partnership does not invalidate the same as Y and the latter consented or Y did not object; then, as to z, X and y will be
among the partners, so long as the contract has the essential requisites, considered as partners by operation of law. This is the concept of partnership
because the main purpose ofregistration is to give notice to third parties, byestoppel.
and it can be assumed that the members themselves knew of the contents
of their contract. In the case at bar, non-compliance with this directory Partnership by Estoppel
provision of the law will not invalidate the partnership considering that . . "'?1ere ~ partnership not duly organized has been recognized as such
the totality of the evidence proves that X and Z indeed forged the m its dealings with certain persons, it shall be considered as "partnership by
partn_ership in question. 19 estoppel" and the persons dealing with it are estopped from denying its
partnership existence.20
Art.1769. In determining whether a partnership exists, these rules shall
apply: Rule 2: Co-ownership or co-possession does not of itself establish a
(1) Except as provided by Article 1825, persons who are not partnership
partners as to each other are not partners as to third persons;
Example:
(2) Co-ownership or co-possession does not of itself establish a
partnership, whether such-co-owners or co-possessors do or do X and Yare recipients ofa gift consisting ofan undivided parcel of/and
not share any profits made by the use of the property; from Z. In this case, X and Y are co-owners and not partners.
(3) The sharing of gross returns does not of itself establish a
partnership, whether or not the persons sharing them have a joint
or common right or interest in any property from which the
returns are derived;
(4) The receipt by a person of a share of the profits of a business is
prima facie evidence that he is a partner in the business, but no
such inference shall be drawn ·if such profits were received in juridical It has no juridical personality.
payment: personality. Thus it can sue Thus it cannot sue or be sued.
(a) As a debt by installments or otherwise; and be sued.
(b) As wages of an employee or rent to a landlord; J>ur ose
(c) As an annuity to a widow or representative of a deceased For profit Common enjoyment of a thing or
partner; right. It is not necessarily for profit.

19 see Lili beth Sunga-Chanand Cecilia Sunga vs. Lamberto T. Chua, G.R. No. 143340, August 15, 2001 20
see Paul MacDonal, eta!., vs. The National City Bank of NewYork, G.R. No. L-7991, May 21, 1956.
 ...
CHAPTER 1 - GENERAL PROVISIONS CHAPTER 1 - GENERAL PROVISIONS
)
Profit ,j ltule 4 : Th e receipt by a person of a share of the profits of a business is
It may be stipulated upon. Profits must always depend on the prima faci e evidence that he is a partner in the business
proportionate shares. Any
sti ulation to the contra is VOID. Prima faci e
Dissolution ii Sufficient to establish a fact or raise a presumption unless disproved
It is dissolved by death or It is not dissolved by the death or r rebutte d; based on what seems to be true on first examination, even
incapacity of co-owner. though it may later be proved to be untrue. 21
Form 11
Example:
It may appear in any form. No public instrument is needed
Xr eceived from Y PS0,000 as his share in the net profit of their business
However, when real property is even if real property is the object o f amounting to P100,000. In this case, there is a disputable presumption that X
contributed, a public co-ownership. and Ya re partners in a contract of partnership.
instrument is re uired. ~~I
No te:
From the above, it appears that the fact that those who agree to
Rule 3: The sharing of gross returns does not of itself establish a for m a co-ownership share or do not share any profits made by the use of
partnership the property held in common does not convert their venture into a
partnership. Or the sharing of the gross returns does not of itself establish
Note: There is a disputable presumption of establishing a contract of ap artnership whether or not the persons sharing therein have a joint or
partnership if what is being shared by two or more persons are net profiIt. co mmon right or interest in the property. This only means that, aside from
However, if what is being shared by two or more persons are gross returns the circumstance of profit, the presence of other elements constituting
or gross profit, then there is no presumption of partnership. partnership is necessary, such as the clear intent to form a partnership, the
· i; existence of a juridical personality different from that of the individual
Example: pa rtners, and the freedom to transfer or assign any interest in the property
In a merchandising business, we have a basic formula for net profit, tow it: by one with the consent of the others.
Gross Sales P xx
Less: Cost of Sales (xx] j It is evident that an isolated transaction whereby two or more
Gross Profit xx persons co ntribute funds to buy certain real estate for profit in the absence
Less: Expenses [xx] of other circumstances showing a contrary intention cannot be considered a
Net Profit or Net Loss xx or CxxJ partnershi p.

Note: Pe rsons who contribute property or funds for a common enterprise

It can be observed from the illustration that even if there is a and agree t o share the gross returns of that enterprise in proportion to their
positive amount or figure for Gross Profit, you cannot still ascertain if it contributio n, but who severally retain the title to their respective
will arrive at Net Profit because it may still turn out to be Net Loss as the contributio n, are not thereby rendered partners. They have no common stock
expenses are controlling factor. or capital, and no community of interest as principal proprietors in the
business itself which the proceeds derived.
For example, if the Gross Profit is PS0,000 and the Expenses is
P20,000, then there is a Net Profit of P30,000. However, if the Gross Profit
Aj oint purchase ofland, by two, does not constitute a co-partnership
remains at PS0,000 and the Expenses amounts to P60,000 then there 1·s a
in respect t hereto; nor does an agreement to share the profits and losses on
Net Loss of P10,000. Hence, the sharing ofgross returns does not of its elf
the sale ofl and create a partnership; the parties are only tenants in common.
establish a partnership.

21 see p. 1382, Bl ack's Law Dictionary, Tenth Edition.

 CHAPTER 1 - GENERAL PROVISIONS
CHAPTER 1 - GENERAL PROVISIONS

Where plaintiff, his brother, and another agreed to become owners of the net income of the partnership pending liquidation. Wwill not become
a partner.
a single tract of realty, holding as tenants in common, and to divide the profits
of disposing it, the brother and the other not being entitled to share in
plaintiffs' commission, no partnership existed as between the three parties,
d. As an interest on a loan
whatever their relation may have been as to third parties.
Example:
X, Y, and Z formed XYZ partnership. One of its creditors is W. The
In order to constitute a partnership inter se, there must be: (a) An intent to
credit is Pl00,000 with a stipulation as to interesto/6% per annum. /twas
form the same; (b) generally participating in both profits and losses; (c) and
agreed between XYZ partnership and W that the payment of interest will
such a community of interest, as far as third persons are concerned as enables
come from the annual net profit of XYZ partnership. Wis not a partner in
each party to make contract, manage the business, and dispose of the whole
XYZ partnership.
property. xx x.

The common ownership of property does not itself create a

e. As the consideration for the sale of a goodwill of a business or
other property
partnership between the owners, though they may use it for the purpose of
making gains; and they may, without becoming partners, agree among
Example:
themselves as to the management, and use of such property and the
X, Y, and Zformed XYZ partnership. Q sold his only parcel of land
application of the proceeds therefrom.22 to XYZ partnership. In their contract of sale, it was agreed that the
payment will come from the annual profit of XYZ partnership. Q is not a
Exceptions to Rule 4: partner in XYZ partnership.
a. As a debt by installments or otherwise
Problem:
Example: The heirs of the late X, namely: X's widow Y; and their
A partnership named ABC Co. earned a net profit of Pl00,000 for
children A, and B filed a Complaint against W, widow of the late H,
its first year ofoperation. Xis a creditor ofABC Co. in the amount ofPS,000.
who was the eldest son of X and Y.
Later, ABC Co. paid the PS,000 to X and this amount was taken from its net
Y, A and B alleged that sometime in 1980, X, together with
profit for the year. ls X a partner in the ABC Co.? No, even though X
received PS,000 which came from the net profit of ABC Co., he is not a his ~riends U _a_nd V, formed a partnership to engage in the trucking
busmess. Imtially, with a contribution of P.50,000 each, they
partner because this is in payment of its debt to X.
purchased a truck to be used in the hauling and transport of lumber
b. As wages of an employee or rent to a landlord of the sawmill. X managed the operations of this trucking business
until his death on August 15, 1981. Thereafter, X's heirs, including H,
and partners agreed to continue the business under the management
Example:
X, Y and Z formed XYZ partnership. V is the accountant of the ofH.
partnership. In the contract of employment between XYZ partnership and On May 18, 1995, H died, leaving Was his sole surviving heir.
V, it was stipulated that the latter will receive 15% of the net profit of the Y, A and B claimed that W took over the administration of the
partnership. Is Va partner? No, Vis an employee even though his salary aforementioned properties, which belonged to the estate of X
will come from the net profit of the partnership. Their agreement is a without their consent and approval. '
contract of employment. W claimed that H was himself a partner of U and V. W also
claimed that per testimony ofY, sometime in 1980, X gave H P.50,000
c. As an annuity to a widow or representative of a deceased partner as the latter's capital in an informal partnership with U and V. When
Example: H and W got married in 1981, the partnership only had one truck;
H, I, J formed HI] partnership. Subsequently, H died survived by but through the efforts of H, the business flourished.
his widow, W. It was agreed between I,], and W that W will receive 5% of W also alleged that when X died in 1981, he left no known
assets, and the partnership with U and V ceased upon his demise. W
also stressed that X left no properties that H could have held in trust.
22 Federico Jarantilla, Jr. vs. Antonieta ]arantilla, G.R. No. 154486, December 1, 2010.
CHAPTER 1 - GENERAL PROVISIONS CHAPTER 1 - GENERAL PROVISIONS

Who is the partner in the trucking business, X or H? 2. The profits shall be confiscated in favor of the government;
Answer:
Applying Article 17 69 of the Civil Code to the facts of this 3. The instruments or tools and proceeds of the crime shall be forfeited
case, the following circumstances tend to prove that H was himself in favor of the government25; and
the partner of U and V: 1) Y testified that X gave H .P.50,000, as share 4. The contributions of the partners shall not be confiscated unless they
in the partnership, on a date that coincided with the payment of the fall under no. 3.
initial capital in the partnership; (2) H ran the affairs of the
partnership, wielding absolute control, power and authority, without Art. 1771. A partnership may be constituted in any form, except where
any intervention or opposition whatsoever from any ofY, A and B; (3) immovable property or real rights are contributed thereto, in which
all of the properties, particularly the nine trucks of the partnership, case a public instrument shall be necessary. (1667a)
were registered in the name of H; (4) U testified that H did not receive
wages or salaries from the partnership, indicating that what he FORM OF CONTRACT OF PARTNERSHIP
actually received were shares of the profits of the business; and (5)
none of Y, A and B, as heirs of X, the alleged partner, demanded General Rule:
periodic accounting from H during his lifetime. A demand for No form is required. Thus, the contract may be oral or in writing.
periodic accounting is evidence of a partnership. 23
Exception:
Art. 1770. A partnership must have a lawful object or purpose, and must If real properties or real rights in real properties are contributed
be established for the common benefit or interest of the partners. regardless of the value. A public instrument is needed; otherwise, the
When an unlawful partnership is dissolved by a judicial decree, contract of partnership is void.
the profits shall be confiscated in favor of the State, without prejudice
to the provisions of the Penal Code governing the confiscation of the REAL RIGHTS
instruments and effects of a crime. (1666a) A right that is connected with a thing rather than a person. Real
rights include ownership, use, habitation, usufruct, predial servitude, pledge,
Lawful object or purpose and real mortgage.26
The object or purpose of a partnership must be within the commerce
of man, not impossible, and it must not be contrary to law, morals, good PUBLIC INSTRUMENT
customs, public order or public policy. A document prepared by a notary public in the presence of the
parties who sign it before witnesses.27
Examples of Unlawful Partnership
1. A partnership formed for gambling purposes. Example:
2. A partnership formed to furnish houses for prostitution purposes. A and B agreed to form a partnership where A promised to contribute
3. A partnership formed to create illegal monopolies or combinations in his only parcel of land while B undertook to contribute Pl 00,000. In this case
restraint of trade. since A will contribute his only parcel of land, a real property, their contract
must be executed in a public instrument. Otherwise, it is void.
Effects of an unlawful partnership
1. The contract is void from the very beginning; 24 What ifA will contribute his only car while Bwill contribute Pl00,000?
The contract may be oral or in writing whether private or public instrument
Note: and the contract of partnership is valid.
A void contract is as if it never existed from the very beginning.
Thus, it has no legal personality.

2s Art 45, Revised Penal Code

23 see Heirs of Jose Lim vs. Juliet Villa Lim, G.R. No. 172690, March 3, 2010. 26 seep. 1519, Black's Law Dictionary, Tenth Edition.
2• Art 1409, NCC. 27 seep. 1427, Black's Law Dictionary, Tenth Edition.
CHAPTER 1 - GENERAL PROVISIONS '_HAPTER 1 - GENERAL PROVISIONS

ll trument, which must be recorded in the Office of the Securities and

A partnership may be constituted in any form lbcchange Commission.
Failure to comply with the requirements of the preceding
Problem: paragraph shall not affect the liability of the partnership and the
X, Y, and Z, are brother and sisters, who are co-owners of certain members thereof to third persons. (n)
lots which were then being leased to SHELL Co. They agreed to open and
operate a gas station thereat to be known as XYZ Shell Service Station Partnership having a capital of P3,000 or more (personal property only)
with an initial investment of P950,000 to be taken from the advance The contract of partnership must appear in a public instrument and
rentals due to them from SHELL for the occupancy of the said lots owned must be recorded in the office of the SEC. Take note that non-compliance with
in common by them. A joint affidavit was executed by them which was he requirement of execution in a public instrument will not make the
prepared by Atty. W. ontract void. Hence, it is still valid.
Y and Z agreed to help their brother Xby allowing him to operate
and manage the gasoline service station of the family. They negotiated Partnership having a capital of below P3,000 (personal property only)
with SHELL. For practical purposes and in order not to run counter to the No form is required. Thus, it may be verbal.
company's policy of appointing only one dealer, it was agreed that X
would apply for the dealership. Y helped in managing the business. Purpose of registration
The registration is to set "a condition for the issuance of licenses to
For some time, X submitted financial statements regarding the ngage in business or trade. In this way, the tax liabilities of big partnerships
operation of the business to Y and Z, but thereafter X failed to render annot be evaded, and the public can also determine more accurately their
subsequent accounting. Hence, a demand was made on X to render an membership and capital before dealing with them." 29
accounting of the profits. Thereafter, Y and Z filed a complaint.
Does a partnership exist between members of the same family Problem:
arising from their joint ownership of certain properties? X filed a complaint against V and Y, daughter and wife,
Answer: respectively of the deceased Z, for Winding Up of Partnership Affairs and
Let it be noted that it is against the policy of SHELL that the Accounting.
business of the dealer is a partnership. It should be a sole proprietorship. X alleged that in 1977, he verbally entered into a partnership
Evidence in the record shows that there was in fact such with Z in the distribution of LPG in Manila. For business convenience, X
partnership agreement between the parties. This is attested by the and Z allegedly agreed to register the business name of their partnership,
testimonies of Y and Atty. W. X submitted to Y and Z periodic accounting Shellite, under the name of Z as a sole proprietorship. The partnership
of the business. X gave a written authority to Y, his sister, to examine and allegedly had Z as manager. As compensation, Z would receive a
audit the books of their "common business". Yassisted in the running of manager's fee of 10% of the gross profit.
the business. There is no doubt that the parties hereto formed a Allegedly, from the time that Shellite opened for business on July
partnership when they bound themselves to contribute money to a 8, 1977, its business operation was profitable.
common fund with the intention of dividing the profits among Upon Z's death in the later part of 1989, his surviving wife, Y and
themselves. The sole dealership by X and the issuance of all government particularly his daughter, V, took over the operations and management of
permits and licenses in the name of X was in compliance with the afore- Shellite without X's consent. Despite X's repeated demands upon Y and V
stated policy of SHELL and the understanding of the parties of having for accounting and winding up of the partnership, Y and V failed to
only one dealer of the SHELL products. 28 comply. Did X and Y form a partnership?
Answer:
Art. 1772. Every contract of partnership having a capital of three In a desperate bid to ··cast doubt on the validity of the oral
thousand pesos or more, in money or property, shall appear in a public partnership between X and Z, Y and V maintain that said partnership had
initial capital of P200,000 which should have been registered with the

zs see Eligio Estanislao, Jr. vs. CA, et.al., G.R. No. L-49982, April 27, 1988. iv Dean Capistrano, IV Civil Code of the Philippines, p. 260.
CHAPTER 1 - GENERAL PROVISIONS CHAPTER 1 - GENERAL PROVISIONS

SEC since registration is mandated by the Civil Code, True, Article 1772 WHAT IS THE INTENTION OF ARTICLE 1773?
of the Civil Code requires that partnerships with a capital of P3,000 Article 1773 was intended primarily to protect third persons. Thus, the
or more must register with the SEC, however, this registration minent Arturo M. Tolentino states that under the aforecited provision which
requirement is not mandatory. Article 17 68 of the Civil Code explicitly · a complement of Article 1771, the execution of a public instrument would
provides that the partnership retains its juridical personality e~en if it b useless if there is no inventory of the property contributed, because
fails to register. The failure to register the contract of partnership does without its designation and description, they cannot be subject to inscription
not invalidate the same as among the partners, so long as the contract has n the Registry of Property, and their contribution cannot prejudice third
the essential requisites, because the main purpose of registration is to persons. This will result in fraud to those who contract with the partnership
give notice to third parties, and it can be assumed that the members In the belief in the efficacy of the guaranty in which the immovables may
themselves knew of the contents of their contract. In the case at bar, non- onsist. Thus, the contract is declared void by the law when no such inventory
compliance with this directory provision of the law will not invalidate the I made. The case at bar does not involve third parties who may be
partnership considering that the totality of the evidence proves that X prejudiced.33
and Z indeed forged the partnership in question. 30
Art. 1774. Any immovable property or an interest therein may be
Art. 1773. A contract of partnership is void, whenever immovable acquired in the partnership name. Title so acquired can be conveyed
property is contributed thereto, if an inventory of said property is not only in the partnership name. (n)
made, signed by the parties, and attached to the public instrument
(1668a) The reason for the above-stated provision is that a partnership has a
judicial personality separate and distinct from that of each of the partners;
Note: hence, immovable property to be acquired must be in the name of the
An inventory is still required if aside from real property, personal partnership and if conveyed must also be in the partnership name.
property is contributed. However, the inventory need not include the
personal property. Example:
A, B, and C formed ABC partnership. Thus, if ABC partnership will be
A partnership may be constituted in any form, save when immovable a donee or a buyer of a specific real property then it shall be registered in its
property or real rights are contributed thereto or when the partnership has name and not in the name of one or some or all of the partners. Consequently,
a capital of at least ¥3,000, in which case a public instrument shall be if this will be conveyed, like sale or donation, the seller or donor must only be in
necessary. And an inventory to be signed by the parties and attached to the the name of the partnership.
public instrument is also indispensable to the validity of the partnership
whenever immovable property is contributed to it. 31 Art. 1775. Associations and societies, whose articles are kept secret
among the members, and wherein any one of the members may contract
Lest it be overlooked, the contract-validating inventory requirement in his own name with third persons, shall have no juridical personality,
under Article 1773 of the Civil Code applies as long as real property or real and shall be governed by the provisions relating to co-ownership.
rights are initially brought into the partnership. In short, it is really of no (1669)
moment which of the partners, contributed immovables. In context, the
more important consideration is that real property was contributed, in which
case an inventory of the contributed property duly signed by the parties
should be attached to the public instrument, else there is legally no
partnership to speak of. 3 2

It is for profit. It may not be for profit.

,o see Lilibeth Sunga-Chan and Cecilia Sunga vs. Lamberto T. Chua, G.R. No. 143340, August 15, 2001.
J I Aurelio K. Litonjua, Jr. vs. Eduardo K. Litonjua, Sr. et.al., G.R. Nos. 166299·300, December 13, 2005.
32 Aurelio K. Litonjua, Jr. vs. Eduardo K. Litonjua, Sr. et.al., G.R. Nos. 166299-300, December 13, 2005 . 33 see Antonia Torres a nd Emeteria Baring vs. CA and Manuel Torres, G.R. No. 134559, December 9, 1999.
 11 It I • GENERAL PROVISIONS
CHAPTER 1 - GENERAL PROVISIONS

h, 1,hnlted partnership
Contribution of M,embers
There is a contribution of money, There is no contribution of capital I Is one where there is at least one general partner and one limited
property, or industry or a although fees are usually collected P rtner. A general partner is liable beyond his contribution while
combination of these. from the members to maintain the a limited partner is liable only to the extent of his contribution.
Note: This will be discussed in chapter 4.

or :,. According to duration

he debts of the association. u. Partnership at will
It is one where there is no fixed term or it is not formed for a
The associations or societies here cannot sue because it has no lega particular undertaking or it is one for a fixed term or particular
personality. However, the fact that it has no legal personality as a partnershi undertaking which is continued after the termination of such term
cannot be invoked by the "partners" for the purpose of evading complianc or particular undertaking without any express agreement.
with obligations contracted by them, because they who caused the nullity o
a contract are prohibited from availing of its benefits. 34 Example:
A, B, and C formed a partnership where A contributed
Art. 1776. As to its object, a partnership is either universal or particular cash of P500,000. For B, computers valued at P200,000 and c, his
As regards the liability of the partners, a partnership may be general o only truck valued at P300,000. In here, there is no fixed term agreed
limited. (1671a) upon nor it is for a particular undertaking so that it can be dissolved
anytime.
CLASSIFICATION OF PARTNERSHIP
1. According to object b. Partnership with a fixed term
a. Universal partnership It is one where the life or period of existence of the partnership has
Two Kinds been agreed upon by the partners.
(1) Universal partnership of all present property
The partners contribute all the property which actually Example:
belongs to them to a common fund, with the intention of A, B, and Cformed a partnership where A contributed cash
dividing the same among themselves, as well as all the profits of ?500,000. For B, computers valued at P200,000 and C, his only
which they may acquire therewith. truck valued at ?300,000. The partners agreed that the life of the
(2) Universal partnership of all profits partnership will be 15 years. In here, the partnership, as a rule, can
It comprises all that the partners may acquire by their be dissolved after the lapse of 15 years.
industry or work during the existence of the partnership.
b. Particular partnership c. Partnership for a particular undertaking
A particular partnership has for its object determinate things, their It is one where it will exist until the purpose is accomplished.
use or fruits, or specific undertaking, or the exercise of a profession
Example:
or vocation.
A, B, and Cformed a partnership for the manufacture of300
2. According to liability tables for a particular school where A contributed cash of P150,000,
a. General partnership B contributed lumber valued at ?200,000 and C, the use of his truck.
It is one where all the partners are general partners. All general In here, the partnership will be dissolved after the completion of the
300 tables.
partners here are liable up to the extent of their separate
properties after the assets of the partnership have been exhausted.

34 11 Ma nresa 289-290.
CHAPTER 1 - GENERAL PROVISIONS c.llAPTER 1- GENERAL PROVISIONS

4. According to representation to others Example:

a. Ordinary partnership A, B, and C formed ABC Partnership where A contributed cash of
It is one where two or more persons bind themselves to contribut Pl,000,000, B contributed his only car and C will contribute his industry
money, property, or industry to a common fund, with the intention o during the term of the partnership. Their agreement is verbal. In here, the
dividing the profits among themselves. partnership is a de facto partnership as it was not written in a public
instrument and it was not registered in the SEC.
Example:
A, B, and C established a partnership where A contribute Ar ·. 1777. A universal partnership may refer to all the present property
cash of PS0,000, B contributed a specific car worth P200,000 and C, hi or to all the profits. (1672)
industry.
I Inds of Universal Partnerships
b. Partnership by estoppel 1. Partnership of all present property
It is one where persons, by words spoken or written or by condu 2. Partnership of all profits
represent themselves, or consent to another representing them t
anyone, as partners in an existing partnership or with one or mor Art. 1778. A partnership of all present property is that in which the
persons not actual partners. partners contribute all the property which actually belongs to them to
, common fund, with the intention of dividing the same among
Example: themselves, as well as all the profits which they may acquire therewith.
A, B, and Care partners in ABC partnership. Subsequently, ( 1673)
misrepresented to Y that he is a partner in ABC partnership. When
inquired from A, B and C if X is one of their partner, A, B, and The contributions of the partners here are the following:
answered in the affirmative. In here A, B, C and X are partners b l .All the properties actually belonging to the partners; and
estoppel so that if Y suffered damages because of tha 2. The profits acquired with said properties.
misrepresentation, the net assets of ABC partnership is liabl
together with the separate property of X. Art. 1779. In a universal partnership of all present property, the
J>roperty which belongs to each of the partners at the time of the
5. According to the legality of its existence ·onstitution of the partnership, becomes the common property of all the
a. De jure partnership partners, as well as all the profits which they may acquire therewith .
. It is one which has complied with all the legal requirements for it
creation. A stipulation for the common enjoyment of any other profits
may also be made; but the property which the partners may acquire
Example:
subsequently by inheritance, legacy, or donation cannot be included in
A, B, and C formed ABC Partnership where A contribute
uch stipulation, except the fruits thereof. (1674a)
cash of Pl,000,000, B contributed his only parcel of land and C wil
contribute his industry during the term of the partnership which i
10 years. The contract of partnership was written in a publi Future Property (Inheritance, Legacy, or Donation)
instrument. The partners made also an inventory which they al Future properties cannot be included because:
signed and thereafter they attached it to their contract o
partnership. In here, we have a de jure partnership. 1. As a rule, contracts regarding successional rights cannot be made;
2. A partnership demands that the contributed things be determinate,
b. De facto partnership known, and certain;
It is one which has not complied with all the legal requirements fo 3. A universal partnership of all present properties really implies a
its creation. donation, and it is well-known that generally, future property cannot be
donated. 35

35 11 Manresa 304-314; Art. 751, NCC.

'JC:
CU/\l'Tm 1 - GENERAL PROVISIONS UIAPTER 1 - GENERAL PROVISIONS

Exception:
Example: If stipulated, the profits from other
A, B, and C entered into a partnership named A, B, and C property of the partners may
Partnership. A contributed all his present properties comprising two become common.
parcels of land. B contributed his only property which is a specific car. C
contributed his house and lot which is his only property. The contract o Note:
partnership formed by A, B, and C is a universal partnership of all present The properties subsequently acquired
property. by inheritance, legacy or donation,
cannot be included in the stipulation,
Art. 1780. A universal partnership of profits comprises all that the but the fruits thereof can be included in
partners may acquire by their industry or work during the existence of the sti ulation.
the partnership.
Movable or immovable property which each of the partners may Art. 1781. Articles of universal partnership, entered into without
possess at the time of the celebration of the contract shall continue to specification of its nature, only constitute a universal partnership of
pertain exclusively to each, only the usufruct passing to the partnership. profits. (1676)
(1675)
Presumption in favor of universal partnership of profits
Partners retain their ownership over their present and future The universal partnership of profits imposes less obligation because
property. What passes to the partnership are the profits and the use of the their real and personal properties are retained by them in naked ownership.
same.36
Art. 1782. Persons who are prohibited from giving each other any
Example: donation or advantage cannot enter into universal partnership. (1677)
A, B, and C entered into a partnership named A, B, and C
Partnership. A contributed the use of his of two parcels of land. B Rationale:
contributed also the use of his specific car for purposes of delivery ofgoods. A universal partnership is virtually a donation to each other of the
C contributed his house and lot to be used by the partnership as warehouse.
partner's properties (or at least, their usufruct). Therefore, if persons are
The contract ofpartnership formed by A, B, and C is a universal partnership
prohibited to donate to each other, they should not be allowed to do indirectly
of all profits.
what the law forbids directly. 37

Effect of Violation of Art. 1782

The partnership is null and void, and its nullity may be raised
anytime. No legal personality was ever acquired. 38
All the present property actually Only the usufruct (use and fruits) of Examples of persons who cannot enter into a universal partnership
belonging to the partners are the properties of the partners 1. Legally married spouses;39
contributed to the partnership becomes common property of all Note: However spouses may enter into a particular partnership like
which become common property of . the partners and the partnership. the exercise of a profession or vocation. 40
all the artners and the artnershi 2. Persons living together as husband and wife without a valid marriage;41
General Rule: All profits acquired through the 3. Persons who were guilty of adultery or concubinage at the time of the
Only the profits of said contributed "industry" or "work" of the partners donation; 42
property become common property become common property.
but not profits arising from othe.r 37 11 Manresa 317.
38 11 Manresa 317.
of the artners. 39 Art. 87, Family Code of the Philippines.
•• Commissioner of Internal Revenue vs. William J. Suter and CA, G.R. No. L-25532, February 28, 1969.
41 Art. 87, Family Code of the Philippines.
36 11 Manresa 303. 42 Art. 739, NCC.

77
CHAPTER 1 - GENERAL PROVISIONS CHAPTER 1 - GENERAL PROVISIONS

4. Persons found guilty of the same criminal offense, in consideration . ~or could the subsequent marriage of the partners operate to
thereo/; 43 dissolve It, such marriage not being one of the causes provided for that
5. A person or persons and a public officer or his wife, descendants and purpose. 44
ascendants, by reason of his office.
Art: 1783. A partic_ular partnership has for its object determinate things,
Problem:
their use or frmts, or specific undertaking, or the exercise of a
A limited partnership, named "WJG Ltd.," was formed byW as the profession or vocation. (1678)
general partner, and J and G, as the limited partners. The partners
contributed, respectively, P20,000, P18,000 and P20,000 to the The above-stated article defines a particular partnership.
partnership.
Examples:
Subsequently, general partner W and limited partner J got 1. A an~ B formed AB Partnership where A contributed Pl,000,000 and B
married and, thereafter, limited partner G sold his share in the contributed his only parcel of land. They agreed to engage in buy and sell
partnership to them. of motor vehicles.
2. A an~ B formed AB Partnership where A contributed Pl0,000,000 while B
Was the partnership dissolved after the marriage of the partners, contributed P3,000,000 and his industry, being an engineer, for the
Wand J and the subsequent sale to them by G of his share? construction of a building as they will engage in the business of leasing
Answer: apartment units.
The thesis that the limited partnership, WJG Ltd., has been 3. A and B, _b oth certified public accountants, entered into a contract of
dissolved by operation of law because of the marriage of the only general partnership to engage in accounting, audit, and tax consultancy.
partner, W to the originally limited partner, J one year after the
partnership was organized is rested upon the theory that: Note:
If th~ partnership is a universal partnership, a husband and wife
A husband and a wife may not enter into a contract ofgeneral co- cannot enter mto such contract. However, if the partnership is a particular
partnership, because under the Civil Code, which applies in the absence of partnership, they can.
express provision in the Code of Commerce, persons prohibited from
making donations to each other are prohibited from entering
into universal partnerships. It follows that the marriage of partners
necessarily brings about the dissolution of a pre-existing partnership.

WJG, Ltd. was not a universal partnership, but a particular

one. A universal partnership requires either that the object of the
association be all the present property of the partners, as contributed by
them to the common fund, or else "all that the partners may acquire by
their industry or work during the existence of the partnership". WJG Ltd.
was not such a universal partnership, since the contributions of the
partners were fixed sums of money, P20,000.00 by Wand P18,000.00 by
J and neither one of them was an industrial partner. It follows that WJG,
Ltd. was not a partnership that spouses were forbidden to enter.

44
43 Art. 739, NCC. see Commissioner of Internal Revenue vs. William). Suter and CA, G.R. No. L-25532, February 28, 1969.
'ln