Tacao et al. v. CA, 342 SCRA 20

Tacao et al. v. CA, 342 SCRA 20

Facts: Petitioner William T. Bello introduced private respondent Nenita Anay to petitioner Tocao, who conveyed her desire to enter into a joint venture with her for the importation and local distribution of kitchen cookwares. Belo acted the capitalist,Tocao as president and general manager, and Anay as head ofthe marketing department (considering her experience and established relationship with West Bend Company,c a manufacturer of kitchen wares in Wisconsin, U.S.A) and later,vice-president for sales. 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 theoverall weekly production; (3) thirty percent (30%) of thesales she would make; and (4) two percent (2%) for herdemonstration services.

The same was not reduced to writing on the strength of Belo’sassurances.

Later, Anay was able to secure the distributorship of cookware products from the West Bend Company. They operated underthe name of Geminesse Enterprise, a sole proprietorship registered in Marjorie Tocao’s name. Anay attended distributor/dealer meetings with West Bend Company with theconsent of Tocao.

Due to Anay’s excellent job performance she was given a plaque of appreciation. Also, in a memo signed by Belo, Anaywas given 37% commission for her personal sales "up Dec31/87,” apart from the 10% share in profits

On October 9, 1987, Anay learned that Marjorie Tocao terminated her as vice-president of Geminesse Enterprise. 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. Belo did not answer.

Anay still received her five percent (5%) overriding commission up to December 1987. The following year, 1988, she did not receive the same commission although the company netted a gross sales of P13,300,360.00.

 On April 5, 1988, Nenita A. Anay filed a complaint for sum of money with damages against Tocao and Belo before the RTC of Makati. She prayed that she be paid (1) P32,00.00 as unpaid overriding commission from January 8, 1988 to February 5, 1988; (2) P100,000.00 as moral damages, and (3) P100,000.00 as exemplary damages. The plaintiff also 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. She further prayed that she be paid the five percent (5%) “overriding commission“ on the remaining 150 West Bend cookware sets before her “dismissal.”

However, Tocao and Belo asserted that the alleged agreement was not reduced to writing nor ratified, hence, unenforceable, void, or nonexistent. Also, they denied the existence of a  partnership because, as Anay herself admitted, Geminesse Enterprise was the sole proprietorship of Marjorie Tocao. Belo also contended that he merely acted as a guarantor of Tocao and denied contributing capital. Tocao, on the other hand, denied that they agreed on a ten percent (10%) commission on the net profits.

Both trial court and court of appeals ruled that a business  partnership existed and ordered the defendants to pay.

Issue:

Whether or not a partnership existed – YES

Ratio:

 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.

Private respondent Anay contributed her expertise in the  business of distributorship of cookware to the partnership and hence, under the law, she was the industrial or managing  partner.

Petitioner Belo had an proprietary interest. He presided over meetings regarding matters affecting the operation of the  business. Moreover, his having authorized in writing giving Anay 37% of the proceeds of her personal sales, could not be interpreted otherwise than that he had a proprietary interest in the business. This is inconsistent with his claim that he merely acted as a guarantor. If indeed he was, he should have  presented documentary evidence. Also, Art. 2055 requires that a guaranty must be express and the Statute of Frauds requires that it must be in writing. Petitioner Tocao was also a capitalist in the partnership. She claimed that she herself financed the business.

The business venture operated under Geminesse Enterprise did not result in an employer-employee relationship between  petitioners and private respondent. First, Anay had a voice in the management of the affairs of the cookware distributorship and second, Tocao admitted that Anay, like her, received only commissions and transportation and representation allowances and not a fixed salary. If Anay was an employee, it is difficult to believe that they recieve the same income. Also, the fact that they operated under the name of Geminesse Enterprise, a sole proprietorship, is of no moment. Said  business name was used only for practical reasons - it was utilized as the common name for petitioner Tocao’s various  business activities, which included the distributorship of cookware.

The partnership exists until dissolved under the law. 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.

Petitioners Tocao’s unilateral exclusion of private respondent from the partnership is shown by her memo to the Cubao office plainly stating that private respondent was, as of October 9, 1987, no longer the vice-president for sales of Geminesse Enterprise. By that memo, petitioner Tocao effected her own withdrawal from the partnership and considered herself as having ceased to be associated with the  partnership in the carrying on of the business. Nevertheless, the partnership was not terminated thereby; it continues until the winding up of the business.

The partnership among petitioners and private respondent is ordered dissolved, and the parties are ordered to effect the winding up and liquidation of the partnership pursuant to the  pertinent provisions of the Civil Code. Petitioners are ordered to pay Anay’s 10% share in the profits, after accounting, 5% overriding commission for the 150 cookware sets available for disposition since the time private respondent was wrongfully excluded from the partnership by petitioner, overriding commission on the total production, as well as moral and exemplary damages, and attorney’s fees