MARJORIE TOCAO and WILLIAM T. BELO v. CA and NENITA A. ANAY, G.R. No.

127405, October
4, 2000

YNARES-SANTIAGO, J.

FACTS
Nenita A. Anay met petitioner William T. Belo, then the vice-president for operations of Ultra Clean Water
Purifier, through her former employer in Bangkok. William Belo introduced Nenita Anay to his girlfriend,
Marjorie Tocao. The three agreed to form a joint venture for the sale of kitchen cookwares. Under the joint
venture, Belo acted as capitalist and contributed P2.5 million; 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. 

Belo and Tocao specifically asked Anay because of her experience and connections as a marketer. They
agreed further that Anay shall receive the following: (1) 10% share of annual net profits; (2) 6% overriding
commission for weekly sales; (3) 30% of sales Anay will make herself; and (4) 2% share for her demo
services They operated under the name Geminesse Enterprise; this name was registered as a sole
proprietorship with the Bureau of Domestic Trade under Tocao. The joint venture agreement was not
reduced to writing because Anay trusted Belo’s assurances. The venture succeeded under Anay’s
marketing prowess. Thereafter, Roger Muencheberg of West Bend Company invited Anay to the
distributor/dealer meeting in Wisconsin, U.S.A. Anay accepted the invitation with the consent of Marjorie
Tocao. Upon return to the Philippines, Belo signed a memo entitling her to an additional 37% commission
for her personal sale.

But then the relationship between them soured. One day, Tocao released a memo that Anay was no
longer the VP of the company. Anay then demanded that the company be audited and her shares be
given to her. Tocao and Belo responded that Anay was only a marketing demonstrator, hence an
employee for a remuneration.

The RTC ruled in favor of Anay and held that there was indeed an "oral partnership agreement between
the plaintiff and the defendants," based on the following: (a) there was an intention to create a
partnership; (b) a common fund was established through contributions consisting of money and industry,
and (c) there was a joint interest in the profits. Belo’s act of attending or presiding over meetings of
Geminesse Enterprise plus his issuance of a memo giving Anay 37% commission on personal sales
demonstrated his involvement as a partner in the business, not a mere guarantor.

The CA affirmed RTC’s decision but the damages were reduced to P50,000.00 for moral damages and
P50,000.00 as exemplary damages.

ISSUE: Whether or not there exists a partnership among Marjorie Tocao, William Belo and Nenita Anay

HELD: Yes. Anay had a voice in the management of the affairs of the cookware distributorship, including
selection of people who would constitute the administrative staff and the sales force. She contributed an
expertise to the partnership and hence, she was the industrial partner. The fact that it was registered as a
sole proprietorship is of no moment for such registration was only for the company’s trade name. Anay
was not even an employee because when they ventured into the agreement, they explicitly agreed to
profit sharing; this is even though Anay was receiving commissions because this is only incidental to her
efforts as a head marketer.

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 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. The fact that there appears to be no record in the Securities
and Exchange Commission of a public instrument pursuant to Article 1772 of the CC did not cause the
nullification of the partnership. 

Also, a partner who is excluded wrongfully from a partnership is an innocent partner. Hence, the guilty
partner must give him his due upon the dissolution of the partnership as well as damages or share in the
profits “realized from the appropriation of the partnership business and goodwill.”

An unjustified dissolution by a partner can subject him to action for damages because by the mutual
agency that arises in a partnership, the doctrine of delectus personae allows the partners to have the
power to dissolve the partnership. In this case the partnership is not yet terminated; it continues until the
winding up of the business.

Since the partnership created by petitioners and private respondent has no fixed term and is therefore a
partnership at will predicated on their mutual desire and consent, it may be dissolved by the will of a
partner. Thus:

"The right to choose with whom a person wishes to associate himself is the very foundation and essence
of that partnership. Its continued existence is, in turn, dependent on the constancy of that mutual resolve,
along with each partner’s capability to give it, and the absence of cause for dissolution provided by the
law itself. Verily, any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership
at will. He must, 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 damages.”

The best evidence of the existence of the partnership, which was not yet terminated (though in the
winding up stage), were the unsold goods and uncollected receivables, which were presented to the trial
court. Since the partnership has not been terminated, the petitioner and private complainant remained as
co-partners.