Yulo to Cir Casweqwees

8/13/2019 Yulo to Cir Casweqwees

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underlies the (hole doctrine of res 6udicata, na!el&, that a person should not be bound b& a6ud'!ent e0cept to the e0tent that he, or so!eone representin' hi!, had an ade1uateopportunit& not onl& to liti'ate the !atters ad6udicated, but to liti'ate the! a'ainst the part&:or his prodecessor in interest; (ho seeree!an on ?ud'!ents, %th ed., p. $;.

/ithout 'oin' further, (e are full& satisfied of the correctness of our conclusion that the relationshipbet(een plaintiff-appellant Rosario ). *ulo and *an' Chiao +en' is !erel& that of sublessor andsublessee, and not that of partners. The !otion to reopen the case is hereb& denied and considerin'that 6ud'!ent had beco!e final since @ctober =$, $%$, order is hereb& 'iven to re!and the recordto the court belo(.

Paras, C. J., Bautista Angelo, e!es, J. B. "., Barrera and #utierrez $a%id, JJ.,concur.


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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-4935 Ma' 2, 1954

*. M. TUASON CO., INC., r$r$!$)#$% &' "# Ma)a") PARTNER, GREGORIA ARANETA,INC.,plaintiff-appellee,vs.UIRINO OLAOS,defendant-appellant.

Araneta and Araneta for appellee.Jose A. Buendia for appellant.

REES, J./

This is an action ori'inall& brou'ht in the Court of >irst 4nstance of Rial, ueon Cit& Branch, torecover possesion of re'istered land situated in barrio Tatalon, ueon Cit&.

Plaintiff8s co!plaint (as a!ended three ti!es (ith respect to the e0tent and description of the landsou'ht to be recovered. The ori'inal co!plaint described the land as a portion of a lot re'istered inplaintiff8s na!e under Transfer Certificate of Title No. DD of the land record of Rial Province andas containin' an area of hectares !ore or less. But the co!plaint (as a!ended b& reducin' thearea of D hectares, !ore or less, after the defendant had indicated the plaintiff8s surve&ors theportion of land clai!ed and occupied b& hi!. The second a!end!ent beca!e necessar& and (asallo(ed follo(in' the testi!on& of plaintiff8s surve&ors that a portion of the area (as e!braced inanother certificate of title, (hich (as plaintiff8s Transfer Certificate of Title No. D. And still later,in the course of trial, after defendant8s surve&or and (itness, uirino >eria, had testified that the area

occupied and clai!ed b& defendant (as about hectares, as sho(n in his E0hibit , plaintiff a'ain,(ith the leave of court, a!ended its co!plaint to !a


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44. The trial court erred in ad!ittin' the third a!ended co!plaint.

444. The trial court erred in den&in' defendant8s !otion to stri


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)nder this provision a!end!ent is not even necessar& for the purpose of renderin' 6ud'!ent onissues proved thou'h not alle'ed. Thus, co!!entin' on the provision, Chief ?ustice Moran sa&s inthis Rules of Court9

)nder this section, A!erican courts have, under the Ne( >ederal Rules of CivilProcedure, ruled that (here the facts sho(n entitled plaintiff to relief other than that

as


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e0clusive and public and notorious possession and under clai! of o(nership adverse to the entire(orld b& defendant and his predecessors in interest.8 This assi'n!ent of error is thus clearl& (ithout!erit.

Error No. F444 is but a conse1uence of the other errors alle'ed and needs for further consideration.

urin' the pendenc& of this case in this Court appellant, thru other counsel, has filed a !otion todis!iss alle'in' that there is pendin' before the Court of >irst 4nstance of Rial another actionbet(een the sa!e parties and for the sa!e cause and see


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After due hearin' before Actin' Referee, Bertito . adivas, he rendered on Au'ust , $DD, adecision 'rantin' the clai!s, the pertinent portions of (hich are 1uoted as follo(s9

4n the li'ht of the testi!onies of herein clai!ants and their principal (itness,>ilo!eno Pason, (ho is a survivor of that unfortunate tra'ed& and (ho personall&(itnessed the deaths of all ei'ht :; deceased (or

/herefore, under the la(, the clai!ants are entitled to co!pensation andrespondent is hereb& ordered9

. To pa& to clai!ant, ANAC@R4TA AK43-AK43 the su! of +4J TK@)+ANPE+@+ :PD,777.77;, plus %7L penalt& in the su! of TKREE TK@)+AN PE+@+:P,777.77;, plus the further su! of T/@ K)NRE PE+@+ as burial e0penses,throu'h this @ffice5

=. To pa& to clai!ant, NE33* BA33ARE+, the su! of +4J TK@)+AN PE+@+:PD,777.77; plus %7L penalt& in the su! of TKREE TK@)+AN PE+@+:P,777.77; or the total su! of N4NE TK@)+AN PE+@+ :P$,777.77; plus thefurther su! of T/@ K)NRE PE+@+ :P=77.77;, as burial e0penses throu'h this@ffice5

. To pa& to clai!ant, MAN)E3 3AKA@-3AKA@, the su! of T/@ TK@)+AN +4JK)NRE PE+@+ :P=,D77.77; plus %7L penalt& in the su! of @NE TK@)+ANTKREE K)NRE PE+@+ :P,77.77;, or the total su! of TKREE TK@)+ANN4NE K)NRE PE+@+ :P,$77.77;, plus burial e0penses in the su! of T/@

K)NRE PE+@+ :P=77.77;, throu'h this @ffice5

#. To pa& to clai!ant, +K4R3E* 3@AA, the su! of >4FE TK@)+AN @NEK)NRE T/ENT* PE+@+ :P%,=7.77; plus %7L penalt& in the su! of T/@TK@)+AN >4FE K)NRE +4JT* PE+@+ :P=,%D7.77; or the total su! of+EFEN TK@)+AN +4J K)NRE E4KT* PE+@+ :P,D7.77;, plus buriale0penses of T/@ K)NRE PE+@+ :P=77.77; throu'h this @ffice5


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%. To pa& to clai!ant, R@+AR4@ A3@FA, the su! of +4J TK@)+AN PE+@+:PD,777.77; plus %7L penalt& in the su! of TKREE TK@)+AN PE+@+:P,777.77; or the total su! of N4NE TK@)+AN PE+@+ :P$,777.77;, plus thefurther su! of T/@ K)NRE PE+@+ :P=77.77; for burial e0penses, throu'h this@ffice5

D. To pa& to clai!ant, C@NCK4TA M@NTER@*@, the su! of +4J TK@)+ANPE+@+ :PD,777.77; plus %7L penalt& in the su! of TKREE TK@)+AN PE+@+:P,777.77; representin' co!pensation for the death of her husband, ?uanito5 andT/@ TK@)+AN +4J K)NRE PE+@+ :P=,D77.77; plus %7L penalt& in the su!of @NE TK@)+AN TKREE K)NRE PE+@+ :P,77.77; or the total su! ofTKREE TK@)+AN N4NE K)NRE PE+@+ :P,$77.77; representin'co!pensation for the death of her son, /ilfredo5 plus the further su! of >@)RK)NRE PE+@+ :P#77.77; for burial e0penses of ?uanito and /ilfredoMontero&o5 or a 'rand total for these t(o cases of TK4RTEEN TK@)+AN TKREEK)NRE PE+@+ :P,77.77;, throu'h this @ffice5

. To pa& to counsel for clai!ants, Att&. An'el >. 3obaton, +r. the su! of T/@

TK@)+AN +4J K)NRE >@RT*->@)R PE+@+ :P=,D##.77; as attorne&8s fees5and

. To pa& to the /orund, throu'h this @ffice, the su! of>4FE K)NRE T/ENT* PE+@+ :P%=7.77;, pursuant to +ection %% of the/or


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. TKE RE+P@NENT C@MM4++4@N ERRE AN@R ACTE /4TK RAFEAB)+E @> 4+CRET4@N 4N K@34N TKAT TKERE /A+ AN EMP3@*ER-EMP3@*EE RE3AT4@N+K4P BET/EEN TKE PET4T4@NER AN TKE ECEA+ECRE/ MEMBER+ @> TKE "4/A" >4+K4N @)T>4T.

=. TKE RE+P@NENT C@MM4++4@N ERRE AN@R ACTE /4TK RAFE

AB)+E @> 4+CRET4@N 4N N@T EC3AR4N 4T+E3> /4TK@)T ?)R4+4CT4@N@FER TKE C3A4M+ >@R EATK BENE>4T+.

. TKE RE+P@NENT C@MM4++4@N ERRE AN@R ACTE /4TK RAFEAB)+E @> 4+CRET4@N 4N >4N4N TKAT TKE EATK @> TKE ECEA+ECRE/ MEMBER 4+ C@MPEN+AB3E )NER TKE /@RMEN8+C@MPEN+AT4@N ACT, A+ AMENE, 4N >4N4N PET4T4@NER 34AB3E >@RTKE PA*MENT @> +)CK C@MPEN+AT4@N.

#. TKE RE+P@NENT C@MM4++4@N ERRE AN@R ACTE /4TK RAFEAB)+E @> 4+CRET4@N 4N EN*4N PET4T4@NER K4+ R4KT T@ BE KEAR.

%. TKE RE+P@NENT C@MM4++4@N ERRE AN@R ACTE /4TK RAFEAB)+E @> 4+CRET4@N, AM@)NT4N T@ 3AC @> ?)R4+4CT4@N, 4NRANT4N EJCE++4FE A/AR+ T@ TKE C3A4MANT+.

The pivotal issue re1uirin' deter!ination is (ho is the statutor& e!plo&er of the decedents and (hoshould be liable for their death co!pensation. Nevertheless, /e ta

... After a careful revie( of the evidence and the records, /e are inclined to a'ree(ith the proposition, advanced b& the clai!ant8s counsel that there e0isted ane!plo&er-e!plo&ee relationship bet(een the respondent and the decedents. Notonl& that the said deceased (or


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"painancier" and +i!plicio Pan'aniban, as his "Tea! leader", is intendedcertainl& as a ver& clever device desi'ned pri!aril& to e0e!pt the e!plo&er fro!ans(erin' an& liabilit& under the provisions of the /or

The said contract of partnership (hile it !a& be considered as valid and la(ful,bet(een the si'natories thereto, the respondent r. Abon' and his "partner" ora'ent, +i!plicio Pan'aniban, no(here in that said a'ree!ent did the decedents or

their heirs in interests ta

partnership a'ree!ent (hen it onl& holds the t(o-part&, Abon' and Pan'aniban, asthe sole partners in that a'ree!entO

>urther!ore, even if Pan'aniban (ill be considered as an independent contractor,(hich he is not, his position as such (ill not relieve the e!plo&er, respondent Abon',fro! his liabilit& under the Act. 4t is (ell-defined in the Act, that an e!plo&er includesever& person or association of persons, incorporated or not, public or private, and thele'al representatives of the deceased e!plo&er. 4t includes the o(ner or !ana'er ofthe business carried on in the establish!ent or place of (or< but (ho, for the reasonthat there is an independent contractor in the sa!e, or for an& other reason, is notthe direct e!plo&er of laborers e!plo&ed there. :+ection $, para'raphsQ,/or

000 000 000 12

As pointed out b& the Co!!ission8s findin's, the funda!ental bases sho(in' that petitioner, r.A'ustino R. Abon', is the e!plo&er, are present, na!el&, the selection and en'a'e!ent of thee!plo&ee5 the pa&!ent of (a'es5 the po(er of dis!issal and the e!plo&er8s po(er to control thee!plo&ees8 conduct. 13These po(ers (ere lod'ed in petitioner Abon', thru his a'ent, +i!plicioPan'aniban, (ho! he alle'es to be his "partner". @n this score alone, the petitioner for revie( !ust


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fail. 4t is (ell-settled that e!plo&er-e!plo&ee relationship involves findin's of fact (hich areconclusive and bindin' and not sub6ect to revie( b& this Court. 14

Petitioner also ar'ues that he (as denied his ri'ht to heard. 154t is contended that petitioner (as notproperl& notified of the proceedin's a'ainst hi!.

The assi'ned error !erits scant consideration. Proper notices and clai!s for co!pensation to'ether(ith a for!al letter to acco!plish /CC >or! No. G E!plo&er8s Report Accident or +icor! No., are fatal errors (hich cannot be repaired at this ti!e. 4t needs no ar'u!ent to sho( that serviceb& re'istered !ail is dee!ed co!pleted upon petitioner8s failure to clai! his !ail fro! the post office(ithin five :%; da&s fro! the first notice sent b& the post!aster. 17The further contention that the"notices" should have been sent his place of residence in Bacolod Cit& is of no !o!ent either.+ection =D of Republic Act No. #=, as a!ended, provides9

+EC. =D. eliver& of notice and clai! ... . The notices shall be served b& personaldeliver& or b& sendin' it b& re'istered letter addressed to the e!plo&er at his last


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Record, p. =7.

= Record, pp. $-=7.

Record, pp. -.

# 1d., p. #5 5 #5 #.

% 1d., p. %.

D 1d., pp. %-D%.

1d., pp. DD-=.

Record, pp. =-$7.

$ 1d., pp. -$75 $=-$.

7 Record, p. .

Bernardo v. Pascual, 7$ Phil. $D, $$.

= Record, pp. $-.

1d., e los Re&es v. Espineli, 7 +CRA %#.

# 1d., R.>. +u'a& 2 Co., 4nc. v. Re&es, et al., 7 +CRA 7%.

% Accordin' to the constitutional provision in force at the ti!e the hearin' tooactor& v. Martine, et al., 7$ Phil. %%, %%#.

$ Abana v. uisu!bin', == +CRA =, =5 Batan'as Transportation Co. v.Pere, +CRA $, $$5 >rancisco v. Consin', D Phil. %#, D7.


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Manila

EN BANC

G.R. No. 31057 S$#$8&$r 7, 1929

ARIANO ARES, ET AL.,plaintiffs-appellees,vs.=ICENTE POLISTICO, ET AL.,defendants-appellants.

'arcelino "onto+ and 'anuel dela osa for appellants.umulong 4 "a%ides for appellees.

=ILLAMOR, J.:

This is an action to brin' about li1uidation of the funds and propert& of the association called

"Turnuhan Polistico 2 Co." The plaintiffs (ere !e!bers or shareholders, and the defendants (eredesi'nated as president-treasurer, directors and secretar& of said association.

4t is (ell to re!e!ber that this case is no( brou'ht before the consideration of this court for thesecond ti!e. The first one (as (hen the sa!e plaintiffs appeared fro! the order of the court belo(sustainin' the defendant8s de!urrer, and re1uirin' the for!er to a!end their co!plaint (ithin aperiod, so as to include all the !e!bers of "Turnuhan Polistico 2 Co.," either as plaintiffs or as adefendants. This court held then that in an action a'ainst the officers of a voluntar& association to(ind up its affairs and enforce an accountin' for !one& and propert& in their possessions, it is notnecessar& that all !e!bers of the association be !ade parties to the action. :Borlasa vs. Polistico,# Phil., #%.; The case havin' been re!anded to the court of ori'in, both parties a!end,respectivel&, their co!plaint and their ans(er, and b& a'ree!ent of the parties, the court appointed

A!adeo R. uintos, of the 4nsular Auditor8s @ffice, co!!issioner to e0a!ine all the boo


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3oans on real-estate....................... $,=.77

3oans on pro!issor& notes.............. #,=%.%%

+alaries.................................... ,7$%.77

Miscellaneous............................... ,DD.7

%,7=.$7

Cash on hand........................................ =#,D7.7

The defendants ob6ected to the co!!issioner8s report, but the trial court, havin' e0a!ined thereasons for the ob6ection, found the sa!e sufficientl& e0plained in the report and the evidence, andacceptin' it, rendered 6ud'!ent, holdin' that the association "Turnuhan Polistico 2 Co." is unla(ful,and sentencin' the defendants 6ointl& and severall& to return the a!ount of P=#,D7.7, as (ell asthe docu!ents sho(in' the uncollected credits of the association, to the plaintiffs in this case, and tothe rest of the !e!bers of the said association represented b& said plaintiffs, (ith costs a'ainst the

defendants.

The defendants assi'ned several errors as 'rounds for their appeal, but (e believe the& can all bereduced to t(o points, to (it9 :; That not all persons havin' an interest in this association areincluded as plaintiffs or defendants5 :=; that the ob6ection to the co!!issioner8s report should havebeen ad!itted b& the court belo(.

As to the first point, the decision on the case of Borlasa vs. Polistico, supra,!ust be follo(ed.

/ith re'ard to the second point, despite the praise(orth& efforts of the attorne& of the defendants,(e are of opinion that, the trial court havin' e0a!ined all the evidence touchin' the 'rounds for theob6ection and havin' found that the& had been e0plained a(a& in the co!!issioner8s report, theconclusion reached b& the court belo(, acceptin' and adoptin' the findin's of fact contained in saidreport, and especiall& those referrin' to the disposition of the association8s !one&, should not bedisturbed.

4n Tan iansen' Tan +iu Pic vs. Echau Tan +iuco :% Phil., %D;, it (as held that the findin's offacts !ade b& a referee appointed under the provisions of section % of the Code of CivilProcedure stand upon the sa!e basis, (hen approved b& the Court, as findin's !ade b& the 6ud'ehi!self. And in riedt vs. E. C. McCullo'h 2 Co.: Phil., ##;, the court held9 ")nder section #7 ofthe Code of Civil Procedure it is !ade the dut& of the court to render 6ud'!ent in accordance (iththe report of the referee unless the court shall unless for cause sho(n set aside the report orreco!!it it to the referee. This provision places upon the liti'ant parties of the dut& of discoverin'and e0hibitin' to the court an& error that !a& be contained therein." The appellants stated the'rounds for their ob6ection. The trial e0a!ined the evidence and the co!!issioner8s report, and

accepted the findin's of fact !ade in the report. /e find no convincin' ar'u!ents on the appellant8sbrief to 6ustif& a reversal of the trial court8s conclusion ad!ittin' the co!!issioner8s findin's.

There is no 1uestion that "Turnuhan Polistico 2 Co." is an unla(ful partnership :).+. vs. Ba'uio, $Phil., $D=;, but the appellants alle'e that because it is so, so!e charitable institution to (ho! thepartnership funds !a& be ordered to be turned over, should be included, as a part& defendant. Theappellants refer to article DDD of the Civil Code, (hich provides9


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A partnership !ust have a la(ful ob6ect, and !ust be established for the co!!onbenefit of the partners.

/hen the dissolution of an unla(ful partnership is decreed, the profits shall be 'ivento charitable institutions of the do!icile of the partnership, or, in default of such, tothose of the province.

Appellant8s contention on this point is untenable. Accordin' to said article, no charitable institution isa necessar& part& in the present case of deter!ination of the ri'hts of the parties. The action (hich!a& arise fro! said article, in the case of unla(ful partnership, is that for the recover& of thea!ounts paid b& the !e!ber fro! those in char'e of the ad!inistration of said partnership, and it isnot necessar& for the said parties to base their action to the e0istence of the partnership, but on thefact that of havin' contributed so!e !one& to the partnership capital. And hence, the charitableinstitution of the do!icile of the partnership, and in the default thereof, those of the province are notnecessar& parties in this case. The article cited above per!its no action for the purpose of obtainin'the earnin's !ade b& the unla(ful partnership, durin' its e0istence as result of the business in(hich it (as en'a'ed, because for the purpose, as Manresa re!ar


17/22

But this is not the case (ith re'ard to profits earned in the course of the partnership,because the& do not constitute or represent the partner8s contribution but are theresult of the industr&, business or speculation (hich is the ob6ect of the partnership,and therefor, in order to de!and the proportional part of the said profits, the partner(ould have to base his action on the contract (hich is null and void, since thispartition or distribution of the profits is one of the 6uridical effects thereof. /herefore

considerin' this contract as non0e/istent, b& reason of its illicit ob6ect, it cannot 'iverise to the necessar& action, (hich !ust be the basis of the 6udicial co!plaint.>urther!ore, it (ould be i!!oral and un6ust for the la( to per!it a profit fro! anindustr& prohibited b& it.

Kence the distinction !ade in the second para'raph of this article of this Code,providin' that the profits obtained b& unla(ful !eans shall not enrich the partners,but shall upon the dissolution of the partnership, be 'iven to the charitable institutionsof the do!icile of the partnership, or, in default of such, to those of the province.

This is a ne( rule, unprecedented b& our la(, introduced to suppl& an obviousdeficienc& of the for!er la(, (hich did not describe the purpose to (hich those

profits denied the partners (ere to be applied, nor state (hat to be done (ith the!.

The profits are so applied, and not the contributions, because this (ould be ane0cessive and un6ust sanction for, as (e have seen, there is no reason, in such acase, for deprivin' the partner of the portion of the capital that he contributed, thecircu!stances of the t(o cases bein' entirel& different.

@ur Code does not state (hether, upon the dissolution of the unla(ful partnership,the a!ounts contributed are to be returned b& the partners, because it onl& deals(ith the disposition of the profits5 but the fact that said contributions are not includedin the disposal prescribed profits, sho(s that in conse1uences of said e0clusion, the'eneral la( !ust be follo(ed, and hence the partners should rei!burse the a!ountof their respective contributions. An& other solution is i!!oral, and the la( (ill not

consent to the latter re!ainin' in the possession of the !ana'er or ad!inistrator(ho has refused to return the!, b& den&in' to the partners the action to de!andthe!. :Manresa, Co!!entaries on the +panish Civil Code, vol. J4, pp. =D=-=D#;

The 6ud'!ent appealed fro!, bein' in accordance (ith la(, should be, as it is hereb&, affir!ed (ithcosts a'ainst the appellants5 provided, ho(ever, the defendants shall pa& the le'al interest on thesu! of P=#,D7.7 fro! the date of the decision of the court, and provided, further, that thedefendants shall deposit this su! of !one& and other docu!ents evidencin' uncollected credits inthe office of the cler< of the trial court, in order that said court !a& distribute the! a!on' the!e!bers of said association, upon bein' dul& identified in the !anner that it !a& dee! proper. +oordered.

A%ance3a, C.J., Jo&nson, treet, Jo&ns, omualdez, and (illa0eal, JJ.,concur.


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EN BANC

G.R. No. L-21101 November 12, 1923

PACIFIC COMMERCIAL COMPANY, ASIATIC PETROLEUM COMPANY P. I.!, LT"., #$%

INTERNATIONAL &AN'ING CORPORATION,

petitioners-appellants, vs. ANTONIO CAMPOS RUE"A #$% (OSE CAMPOS RUE"A,partners-appellees.

ROMUAL"E), J.:chanrobles virtual lawlibrary

The petitioners appeal from an order of the Court of First nstance of !anila settin" aside a previousorder which directed the receiver to ta#e possession of the boo#s, papers, and private property of thepartners, and prohibited the payment to the latter of their private credits, and the collection of theirdebts. chanroblesvirtualawlibrarychanrobles virtual lawlibrary

The appellants contend that with the annulment of said order, $ud"ment of this court of Au"ust %&,'(%%, in case ). *. No. '&+ becomes ineffective.1chanrobles virtual law library

uch a conclusion is untenable, considerin" that the pronouncement prayed for and made in said case). *. No. '&+ was one declarin" insolvent the partnership Campos *ueda / Co., the partners nothavin" been individually summoned or heard in that proceedin".chanroblesvirtualawlibrarychanrobles virtual law library

The order appealed from is hereby affirmed, with the costs a"ainst the appellants. o ordered.chanroblesvirtualawlibrarychanrobles virtual law library

Johnson, Street, Malcolm, Avancena, Villamor and Johns, JJ., concur.


19/22


Manila

EN BANC

G.R. No. L-25532 $&r(ar' 2, 1969

COMMISSIONER O INTERNAL RE=ENUE,petitioner,vs.ILLIAM *. SUTER a)% TE COURT O TA> APPEALS,respondents.

Office of t&e olicitor #eneral Antonio P. Barredo, Assistant olicitor #eneral Felicisimo . oseteand pecial Attorne!s B. #atdula, Jr. and T. Temprosa Jr. for petitioner.

A. . 'onzon, #utierrez, Farrales and Ong for respondents.

REES, *..L., J.:

A li!ited partnership, na!ed "/illia! ?. +uter 8Morcoin8 Co., 3td.," (as for!ed on 7 +epte!ber$# b& herein respondent /illia! ?. +uter as the 'eneral partner, and ?ulia +piri' and ustavCarlson, as the li!ited partners. The partners contributed, respectivel&, P=7,777.77, P,777.77 andP=,777.77 to the partnership. @n @ctober $#, the li!ited partnership (as re'istered (ith the+ecurities and E0chan'e Co!!ission. The fir! en'a'ed, a!on' other activities, in the i!portation,!ar


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:b; /hether or not the partnership (as dissolved after the !arria'e of the partners, respondent/illia! ?. +uter and ?ulia +piri' +uter and the subse1uent sale to the! b& the re!ainin' partner,ustav Carlson, of his participation of P=,777.77 in the partnership for a no!inal a!ount of P.77.

The theor& of the petitioner, Co!!issioner of 4nternal Revenue, is that the !arria'e of +uter and+piri' and their subse1uent ac1uisition of the interests of re!ainin' partner Carlson in the

partnership dissolved the li!ited partnership, and if the& did not, the fiction of 6uridical personalit& ofthe partnership should be disre'arded for inco!e ta0 purposes because the spouses have e0clusiveo(nership and control of the business5 conse1uentl& the inco!e ta0 return of respondent +uter forthe &ears in 1uestion should have included his and his (ife8s individual inco!es and that of theli!ited partnership, in accordance (ith +ection #% :d; of the National 4nternal Revenue Code, (hichprovides as follo(s9

:d; usband and 5ife. G 4n the case of !arried persons, (hether citiens, residents or non-residents, onl& one consolidated return for the ta0able &ear shall be filed b& either spouse tocover the inco!e of both spouses5 ....

4n refutation of the fore'oin', respondent +uter !aintains, as the Court of Ta0 Appeals held, that his

!arria'e (ith li!ited partner +piri' and their ac1uisition of Carlson8s interests in the partnership in$# is not a 'round for dissolution of the partnership, either in the Code of Co!!erce or in the Ne(Civil Code, and that since its 6uridical personalit& had not been affected and since, as a li!itedpartnership, as contra distin'uished fro! a dul& re'istered 'eneral partnership, it is ta0able on itsinco!e si!ilarl& (ith corporations, +uter (as not bound to include in his individual return the inco!eof the li!ited partnership.

/e find the Co!!issioner8s appeal un!eritorious.

The thesis that the li!ited partnership, /illia! ?. +uter "Morcoin" Co., 3td., has been dissolved b&operation of la( because of the !arria'e of the onl& 'eneral partner, /illia! ?. +uter to theori'inall& li!ited partner, ?ulia +piri' one &ear after the partnership (as or'anied is rested b& theappellant upon the opinion of no( +enator Tolentino in Co!!entaries and ?urisprudence onCo!!ercial 3a(s of the Philippines, Fol. , #th Ed., pa'e %, that reads as follo(s9

A husband and a (ife !a& not enter into a contract of generalcopartnership, because underthe Civil Code, (hich applies in the absence of e0press provision in the Code of Co!!erce,persons prohibited fro! !a


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The for!er Chief ?ustice of the +panish +upre!e Court, . ?ose Casan, in his erecho Civil, thEdition, $%=, Folu!e #, pa'e %#D, footnote , sa&s (ith re'ard to the prohibition contained in theaforesaid Article D9

3os con&u'es, se'un esto, no pueden celebrar entre si el contrato de sociedad universal,pero o podran constituir sociedad particularO Aun1ue el punto ha sido !u& debatido, nos

inclina!os a la tesis per!isiva de los contratos de sociedad particular entre esposos, &a 1uenin'un precepto de nuestro Codi'o los prohibe, & ha& 1ue estar a la nor!a 'eneral se'un la1ue toda persona es capa para contratar !ientras no sea declarado incapa por la le&. 3a

6urisprudencia de la ireccion de los Re'istros fue favorable a esta !is!a tesis en suresolution de de febrero de $D, !as parece ca!biar de ru!bo en la de $ de !aro de$#.

Nor could the subse1uent !arria'e of the partners operate to dissolve it, such !arria'e not bein'one of the causes provided for that purpose either b& the +panish Civil Code or the Code ofCo!!erce.

The appellant8s vie(, that b& the !arria'e of both partners the co!pan& beca!e a sin'le

proprietorship, is e1uall& erroneous. The capital contributions of partners /illia! ?. +uter and ?ulia+piri' (ere separatel& o(ned and contributed b& the! before their !arria'e5 and after the& (ere6oined in (edloc


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o(n inco!e ta0 returns as such independent entit&. The chan'e in its !e!bership, brou'ht about b&the !arria'e of the partners and their subse1uent ac1uisition of all interest therein, is no 'round for(ithdra(in' the partnership fro! the covera'e of +ection =# of the ta0 code, re1uirin' it to pa&inco!e ta0. As far as the records sho(, the partners did not enter into !atri!on& and thereafter bu&the interests of the re!ainin' partner (ith the pre!editated sche!e or desi'n to use the partnershipas a business conduit to dod'e the ta0 la(s. Re'ularit&, not other(ise, is presu!ed.

As the li!ited partnership under consideration is ta0able on its inco!e, to re1uire that inco!e to beincluded in the individual ta0 return of respondent +uter is to overstretch the letter and intent of thela(. 4n fact, it (ould even conflict (ith (hat it specificall& provides in its +ection =#9 for the appellantCo!!issioner8s stand results in e1ual treat!ent, ta0 (ise, of a 'eneral copartnership :compa3iacolecti%a; and a li!ited partnership, (hen the code plainl& differentiates the t(o. Thus, the codeta0es the latter on its inco!e, but not the for!er, because it is in the case of compa3ias colecti%asthat the !e!bers, and not the fir!, are ta0able in their individual capacities for an& dividend or shareof the profit derived fro! the dul& re'istered 'eneral partnership :+ection =D, N.4.R.C.5 AraHas,

Anno. 2 ?uris. on the N.4.R.C., As A!ended, Fol. , pp. -$;. la5p&i6.n7t

But it is ar'ued that the inco!e of the li!ited partnership is actuall& or constructivel& the inco!e of

the spouses and for!s part of the con6u'al partnership of 'ains. This is not (holl& correct. Aspointed out in A'apito vs. Molo %7 Phil. $, and People8s Ban< vs. Re'ister of eeds of Manila, D7Phil. D, the fruits of the (ife8s parapherna beco!e con6u'al onl& (hen no lon'er needed to defra&the e0penses for the ad!inistration and preservation of the paraphernal capital of the (ife. Thena'ain, the appellant8s ar'u!ent erroneousl& confines itself to the 1uestion of the le'al personalit& ofthe li!ited partnership, (hich is not essential to the inco!e ta0abilit& of the partnership since the la(ta0es the inco!e of even 6oint accounts that have no personalit& of their o(n. Appellant is, li@R TKE >@RE@4N REA+@N+, the decision under revie( is hereb& affir!ed. No costs.

Concepcion, C.J., $izon, 'a+alintal, 8aldi%ar, anc&ez, Castro, Fernando, Capistrano andTee&an+ee, JJ., concur.Barredo, J., too+ no part.

oo#)o#$!

F. Evan'elists vs. Collector of 4nternal Revenue, 7= Phil #75 Collector vs. Batan'asTransportation Co., 7= Phil. ==.

Yulo to Cir Casweqwees

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