SANTOS VS. SPS. REYES, 368 SCRA 261
PANGANIBAN, J.:
G.R. No. 135813. October 25, 2001
Parties:
Petitioner: FERNANDO SANTOS,
Respondents: Spouses ARSENIO and NIEVES REYES
Nature: PETITION for review on certiorari of a decision
of the Court of Appeals
Keyword: Partnership, Loaning Business,
Summary: Santos and Nieves were introduced by Zabat regarding
a lending business venture. It was agreed verbally that Santos was the
financier while Nieves and Zabat would cover solicitation of members and
collection of loan payments. Subsequently, Nieves introduced Santos to Gragera
resulting to a business deal with Monte Maria Development Corp. On Aug 1986,
Santos, Nieves, and Zabat executed the ‘Article of Agreement’ which formalized
their earlier verbal agreement. Later on, Santos and Nieves discovered that
Zabat was engaged in the same lending business in competition with their
venture thus resulting to the latter’s expulsion from the partnership. On June
1987, Santos filed a complaint against Nieves for recovery of sum of money and
damages. He charged Nieves of allegedly misappropriating funds intended to
Gragera in their capacity as ‘employees’ of Santos. In their answer, Nieves
asserted they were partners and alleged that the complaint was filed to prevent
them from claiming their rightful share to the profits of the partnership.
Santos contended that Nieves were his employess due to the fact that he ceased
infusing funds upon discovering Zabat’s activities thus extinguishing the
partnership.
RTC:
Held that respondents were PARTNERS, not mere employees, of petitioner. It
further ruled that Gragera was only a commission agent of petitioner, not his
partner.
CA:
Upheld the decision of the RTC. Counterclaim was dismissed.
Facts: Sometime in June, 1986, [Petitioner] Fernando
Santos and [Respondent] Nieves Reyes were introduced to each other by one
Meliton Zabat regarding a lending business venture proposed by Nieves. It was
verbally agreed that [petitioner Santos would] act as financier while
[respondent Nieves] and Zabat [would] take charge of solicitation of members
and collection of loan payments. The venture was launched on June 13, 1986,
with the understanding that [petitioner Santos] would receive 70% of the
profits while [respondent Nieves] and Zabat would earn 15% each,
“In July, 1986, Nieves introduced Cesar Gragera
to [petitioner Santos]. Gragera, as chairman of the Monte Maria Development
Corporation6 (Monte
Maria, for brevity), sought short-term loans for members of the corporation.
[Petitioner Santos] and Gragera executed an agreement providing funds for Monte
Maria’s members. Under the agreement, Monte Maria, represented by Gragera, was
entitled to P1.31 commission per thousand paid daily to [petitioner Santos].
Nieves kept the books as representative of [petitioner Santos] while
[Respondent] Arsenio, husband of Nieves, acted as credit investigator.
“On August 6, 1986, [petitioner], [Nieves] and
Zabat executed the ‘Article of Agreement’ which formalized their earlier verbal
arrangement.
“[Petitioner] and [Nieves] later discovered that
their partner Zabat engaged in the same lending business in competition with
their partnership[.] Zabat was thereby expelled from the partnership. The
operations with Monte Maria continued.
“On June 5, 1987, [petitioner] filed a complaint
for recovery of sum of money and damages. [Petitioner] charged [respondents],
allegedly in their capacities as employees of [petitioner], with having
misappropriated funds intended for Gragera for the period July 8, 1986 up to
March 31, 1987. Upon Gragera s complaint that his commissions were inadequately
remitted, [petitioner] entrusted P200,000.00 to Nieves to be given to Gragera. Nieves allegedly failed to account for the
amount. [Petitioner] asserted that after examination of the records, he found
that of the total amount of P4,623,201.90 entrusted to [respondents], only
P3,068,133.20 was remitted to Gragera, thereby leaving the balance of
P1,555,065.70 unaccounted for.
“In their answer, [respondents] asserted that
they were partners and not mere employees of [petitioner]. The complaint, they
alleged, was filed to preempt and prevent them from claiming their rightful
share to the profits of the partnership.
“Arsenic alleged that he was enticed by [petitioner] to take the
place of Zabat after [petitioner] learned of Zabat’s activities. Arsenio resigned
from his job at the Asian Development Bank to join the partnership.
“For her part, Nieves claimed that she
participated in the business as a partner, as the lending activity with Monte
Maria originated from her initiative. Except for the limited period of July 8,
1986 through August 20, 1986, she did not handle sums intended for Gragera.
Collections were turned over to Gragera because he guaranteed 100% payment of
all sums loaned by Monte Maria. Entries she made on worksheets were based on
this assumptive 100% collection of all loans. The loan releases were made less
Gragera’s agreed commission. Because of this arrangement, she neither received
payments from borrowers nor remitted any amount to Gragera. Her job was merely
to make worksheets to convey to [petitioner] how much he would earn if all the
sums guaranteed by Gragera were collected.
“[Petitioner] on the other hand insisted that
[respondents] were his mere employees and not partners with respect to the
agreement with Gragera. He claimed that after he discovered Zabat’s activities,
he ceased infusing funds, thereby causing the extinguishment of the
partnership. The agreement with Gragera was a distinct partnership [from] that
of [respondent] and Zabat. [Petitioner] asserted that [respondents] were hired
as salaried employees with respect to the partnership between [petitioner] and
Gragera.
RTC:
Held that respondents were PARTNERS, not mere employees, of petitioner. It
further ruled that Gragera was only a commission agent of petitioner, not his
partner.
CA:
Upheld the decision of the RTC. Counterclaim was dismissed.
Issue: Whether or not the respondents were employees or
partners of the petitioner.
Held: Respondents were partners of the petitioner.
Ratio:
We agree with both courts on this point. By the contract of partnership, two or
more persons bind themselves to contribute money, property or industry to a
common fund, with the intention of dividing the profits among themselves.12 The
“Articles of Agreement” stipulated that the signatories shall share the profits
of the business in a 70–15–15 manner, with petitioner getting the lion’s share.13 This stipulation clearly proved the
establishment of a partnership.
We find no cogent reason to
disagree with the lower courts that the partnership continued lending money to
the members of the Monte Maria Community Development Group, Inc., which later
on changed its business name to Private Association for Community Development,
Inc. (PACDI). Nieves was not merely
petitioner’s employee. She discharged her bookkeeping duties in accordance with
paragraphs 2 and 3 of the Agreement.
Because
of this Agreement and the disbursement of monthly “allowances” and “profit shares”
or “dividends” (Exh. “6”) to Arsenio, we uphold the factual finding of both
courts that he replaced Zabat in the partnership.
Indeed, the partnership was
established to engage in a moneylending business, despite the fact that it was
formalized only after the Memorandum of Agreement had been signed by petitioner
and Gragera. Contrary to petitioner’s contention, there is no evidence to show
that a different business venture is referred to in this Agreement, which was
executed on August 6, 1986, or about a month after the Memorandum had been
signed by petitioner and Gragera on July 14, 1986.
The Agreement itself attests to this fact:
“WHEREAS, the parties have decided to formalize
the terms of their business relationship in order that their respective interests
may be properly defined and established for their mutual benefit and
understanding,”15
Ruling:
WHEREFORE, the Petition is partly GRANTED. The assailed November 28, 1997
Decision is AFFIRMED, but the challenged Resolutions dated August 17, 1998 and
October 9, 1998 are REVERSED and SET ASIDE. No costs.
SO ORDERED.
