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  • Pioneer v. CA

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    Jessica Rhea Cruz
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    Jacob Lim owned an airline business and purchased aircraft from Japan Domestic Airlines, with Pioneer Insurance acting as surety. Border Machinery, the Cervantes family, and Constancio Maglana contributed funds for the purchase, intended for a new corporation with Lim. When Lim defaulted on payments, Pioneer paid the balance and sued for reimbursement. The court found no de facto partnership was formed, as Lim acted alone in the purchases. Records showed Lim received P151,000 from the others but never formed the corporation, supporting their cross-claims that they were induced by false promises.

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    Jacob Lim owned an airline business and purchased aircraft from Japan Domestic Airlines, with Pioneer Insurance acting as surety. Border Machinery, the Cervantes family, and Constancio Maglana contributed funds for the purchase, intended for a new corporation with Lim. When Lim defaulted on payments, Pioneer paid the balance and sued for reimbursement. The court found no de facto partnership was formed, as Lim acted alone in the purchases. Records showed Lim received P151,000 from the others but never formed the corporation, supporting their cross-claims that they were induced by false promises.

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    24 views2 pages

    Pioneer v. CA

    Uploaded by

    Jessica Rhea Cruz
    Jacob Lim owned an airline business and purchased aircraft from Japan Domestic Airlines, with Pioneer Insurance acting as surety. Border Machinery, the Cervantes family, and Constancio Maglana contributed funds for the purchase, intended for a new corporation with Lim. When Lim defaulted on payments, Pioneer paid the balance and sued for reimbursement. The court found no de facto partnership was formed, as Lim acted alone in the purchases. Records showed Lim received P151,000 from the others but never formed the corporation, supporting their cross-claims that they were induced by false promises.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    Facts:

    Jacob S. Lim was engaged in the airline business as owner-operator of Southern Air Lines (SAL). On May
    17, 1965, Japan Domestic Airlines (JDA) and Lim entered into and executed a sales contract for the sale
    and purchase of two (2) DC-3A Type aircrafts and one (1) set of necessary spare parts. Pioneer
    Insurance and Surety Corporation (Pioneer, petitioner in G.R. No. 84197) as surety executed and issued
    its Surety Bond No. 6639 n favor of JDA, in behalf of its principal, Lim, for the balance price of the
    aircrafts and spare parts.

    Border Machinery and Heavy Equipment Company, Inc. (Bormaheco), Francisco and Modesto Cervantes
    and Constancio Maglana contributed some funds used in the purchase of the above aircrafts and spare
    parts. The funds were supposed to be their contributions to a new corporation proposed by Lim to expand
    his airline business. They executed two (2) separate indemnity agreements in favor of Pioneer, one
    signed by Maglana and the other jointly signed by Lim for SAL, Bormaheco and the Cervanteses.

    Lim doing business under the name and style of SAL executed in favor of Pioneer as deed of chattel
    mortgage as security for the latter's suretyship in favor of the former. It was stipulated therein that Lim
    transfer and convey to the surety the two aircrafts.

    Lim defaulted on his subsequent installment payments prompting JDA to request payments from the
    surety. Pioneer paid a total sum of P298,626.12.

    Pioneer filed an action for judicial foreclosure with an application for a writ of preliminary attachment
    against Lim and respondents, the Cervanteses, Bormaheco and Maglana.

    Maglana, Bormaheco and the Cervanteses filed cross-claims against Lim alleging that they were not
    privies to the contracts signed by Lim and, by way of counterclaim, sought for damages for being exposed
    to litigation and for recovery of the sums of money they advanced to Lim for the purchase of the aircrafts
    in question.

    Issue:

    Whether Bormaheco, Spouses Cervantes, and Constancio Maglana are entitled to reimbursement of the
    supposed losses of the proposed corporation?

    Ruling:

    No.

    There is no de facto partnership was created among the parties which would entitle the petitioner to a
    reimbursement of the supposed losses of the proposed corporation. The record shows that the petitioner
    was acting on his own and not in behalf of his other would-be incorporators in transacting the sale of the
    airplanes and spare parts.

    In the instant case, it is to be noted that the petitioner was declared non-suited for his failure to appear
    during the pretrial despite notification. In his answer, the petitioner denied having received any amount
    from respondents Bormaheco, the Cervanteses and Maglana. The trial court and the appellate court,
    however, found through Exhibit 58, that the petitioner received the amount of P151,000.00 representing
    the participation of Bormaheco and Atty. Constancio B. Maglana in the ownership of the subject airplanes
    and spare parts. The record shows that defendant Maglana gave P75,000.00 to petitioner Jacob Lim thru
    the Cervanteses.

    It is therefore clear that the petitioner never had the intention to form a corporation with the respondents
    despite his representations to them. This gives credence to the cross-claims of the respondents to the
    effect that they were induced and lured by the petitioner to make contributions to a proposed corporation
    which was never formed because the petitioner reneged on their agreement.

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