TOCAO Vs CA

TOCAO vs.
CA
GR No. 127405 | October, 4, 2000
Facts: Nenita A. Anay met William T. Belo in Bangkok. Belo introduced Anay to Marjorie Tocao, who conveyed her
desire to enter into a joint venture with her for the importation and local distribution of kitchen cookwares.
Under the joint venture, Belo acted as capitalist, Tocao as president and general manager, and Anay as head of the
marketing department and later, vice-president for sales.
The parties agreed that Belo’s name should not appear in any documents relating to their transactions with West
Bend Company. Instead, they agreed to use Anay’s name in securing distributorship of cookware from that company.
The parties agreed further that Anay would be entitled to: (1) ten percent (10%) of the annual net profits of the
business; (2) overriding commission of six percent (6%) of the overall weekly production; (3) thirty percent (30%) of
the sales she would make; and (4) two percent (2%) for her demonstration services. The agreement was not reduced
to writing on the strength of Belo’s assurances that he was sincere, dependable and honest when it came to financial
commitments.
They operated under the name of Geminesse Enterprise, a sole proprietorship registered in Marjorie Tocao’s name.
Anay learned that Marjorie Tocao had signed a letter addressed to the Cubao sales office to the effect that she was no
longer the vice-president of Geminesse Enterprise. The following day, she received a note from the marketing
manager, that Marjorie Tocao had barred her from holding office and conducting demonstrations in both Makati
and Cubao offices.
Anay attempted to contact Belo. She wrote him twice to demand her overriding commission for the period of January
8, 1988 to February 5, 1988 and the audit of the company to determine her share in the net profits.
Anay still received her five percent (5%) overriding commission up to December 1987. The following year, 1988, she
did not receive the same commission.
Hence, Nenita Anay filed a complaint for sum of money with damages against Marjorie D. Tocao and William Belo.
Contention of Anay: She prayed for an audit of the finances of Geminesse Enterprise from the inception of its
business operation until she was "illegally dismissed" to determine her ten percent (10%) share in the net profits.
Contention of Belo and Tacao: Belo denied that Anay was supposed to receive a share in the profit of the business.
He denied contributing capital to the business or receiving a share in its profits as he merely served as a guarantor of
Marjorie Tocao, who was new in the business. He attended and/or presided over business meetings of the venture in
his capacity as a guarantor but he never participated in decision-making.
Marjorie Tocao denied having entered into an oral partnership agreement with Anay. However, she admitted that
Anay was an expert in the cookware business and hence, they agreed to grant her the commissions.
Issue: Whether or not a partnership exists?

a. 2000 Ruling: YES. As between Tocao, Belo and Anay
b. 2001 Ruling: YES. But only between Tocao and Anay because Belo was a mere guarantor of Tocao.
Held:
2000 Ruling (Anay’s Expertise in Selling Cookwares contributed to the Success of the Business)
A partnership must fulfill these requisites:
(1) two or more persons bind themselves to contribute money, property or industry to a common fund; and
(2) intention on the part of the partners to divide the profits among themselves.
It may be constituted in any form; a public instrument is necessary only where immovable property or real rights are
contributed thereto.
This implies that since a contract of partnership is consensual, an oral contract of partnership is as good as a written
one. Where no immovable property or real rights are involved, what matters is that the parties have complied with the
requisites of a partnership.
IN THE CASE AT BAR:

The fact that there appears to be no record in the Securities and Exchange Commission of a public instrument
embodying the partnership agreement pursuant to Article 1772 of the Civil Code did not cause the nullification of the
partnership. The pertinent provision of the Civil Code on the matter states:
Art. 1768. The partnership has a juridical personality separate and distinct from that of each of the partners, even in
case of failure to comply with the requirements of article 1772, first paragraph.
Tocao admit that Anay had the expertise to engage in the business of distributorship of cookware. Anay contributed
such expertise to the partnership and hence, under the law, she was the industrial or managing partner. It was
through her reputation with the West Bend Company that the partnership was able to open the business of
distributorship of that company’s cookware products; it was through the same efforts that the business was propelled
to financial success.
2001 Ruling MFR (Belo is merely a guarantor of Tocao)

It should be recalled that the business relationship created between petitioner Tocao and respondent Anay was an
informal partnership, which was not even recorded with the Securities and Exchange Commission.
As such, it was understandable that Belo, who was after all Tocao's good friend and confidante, would occasionally
participate in the affairs of the business, although never in a formal or official capacity. Again, Anay’s witness,
Elizabeth Bantilan, confirmed that petitioner Belo's presence in Geminesse Enterprise's meetings was merely as
guarantor of the company and to help Tocao.
Furthermore, no evidence was presented to show that Belo participated in the profits of the business enterprise. Anay
herself professed lack of knowledge that petitioner Belo received any share in the net income of the partnership. On
the other hand, Tocao declared that Belo was not entitled to any share in the profits of Geminesse Enterprise.
With no participation in the profits, Belo cannot be deemed a partner since the essence of a partnership is that the
partners share in the profits and losses. Consequently, inasmuch as petitioner Belo was not a partner in Geminesse
Enterprise, Anay had no cause of action against him and her complaint against him should accordingly be dismissed.

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TOCAO vs.

Issue: Whether or not a partnership exists?

IN THE CASE AT BAR:

2001 Ruling MFR (Belo is merely a guarantor of Tocao)

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