TOCAOV.

COURTOFAPPEALS342SCRA20(2000)
Facts:
PetitionerWilliamT.BellointroducedprivaterespondentNenitaAnayto
petitionerTocao,whoconveyedherdesiretoenterintoajointventurewith
herfortheimportationandlocaldistributionofkitchencookwares.Belo
actedthecapitalist,Tocaoaspresidentandgeneralmanager,andAnayas
head of the marketing department (considering her experience and
established relationship with West Bend Company,c a manufacturer of
kitchenwaresinWisconsin,U.S.A)andlater,vicepresidentforsales.
ThepartiesagreedfurtherthatAnaywouldbeentitledto:
(1)tenpercent(10%)oftheannualnetprofitsofthebusiness;
(2) overriding commission of six percent (6%) of the overall weekly
production;
(3)thirtypercent(30%)ofthesalesshewouldmake;and(4)twopercent
(2%)forherdemonstrationservices.
ThesamewasnotreducedtowritingonthestrengthofBelosassurances.
Later,Anaywasabletosecurethedistributorshipofcookwareproducts
from the West Bend Company. They operated under the name of
GeminesseEnterprise,asoleproprietorshipregisteredinMarjorieTocaos
name.Anayattendeddistributor/dealermeetingswithWestBendCompany
withtheconsentofTocao.DuetoAnaysexcellentjobperformanceshe
wasgivenaplaqueofappreciation.Also,inamemosignedbyBelo,Anay
wasgiven37%commissionforherpersonalsales"upDec31/87,apart
from the 10% share in profits. On October 9, 1987, Anay learned that
MarjorieTocaoterminatedherasvicepresidentofGeminesseEnterprise.
AnayattemptedtocontactBelo.
Shewrotehimtwicetodemandheroverridingcommissionfortheperiodof
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.Thefollowingyear,1988,shedidnotreceivethesamecommission

althoughthecompanynettedagrosssalesofP13,300,360.00.OnApril5,
1988,NenitaA.Anayfiledacomplaintforsumofmoneywithdamages
againstTocaoandBelobeforetheRTCofMakati.Sheprayedthatshebe
paid(1)P32,00.00asunpaidoverridingcommissionfromJanuary8,1988
to February 5, 1988; (2) P100,000.00 as moral damages, and (3)
P100,000.00asexemplarydamages.Theplaintiffalsoprayedforanaudit
ofthefinancesofGeminesseEnterprisefromtheinceptionofitsbusiness
operationuntilshewasillegallydismissedtodeterminehertenpercent
(10%)shareinthenetprofits.Shefurtherprayedthatshebepaidthefive
percent(5%)overridingcommissionontheremaining150WestBend
cookwaresetsbeforeherdismissal.
However, Tocao and Belo asserted that the alleged agreement was not
reducedtowritingnorratified,hence,unenforceable,void,ornonexistent.
Also,theydeniedtheexistenceofapartnershipbecause,asAnayherself
admitted, Geminesse Enterprise was the sole proprietorship of Marjorie
Tocao.BeloalsocontendedthathemerelyactedasaguarantorofTocao
anddeniedcontributingcapital.Tocao,ontheotherhand,deniedthatthey
agreedonatenpercent(10%)commissiononthenetprofits.
Both trial court and court of appeals ruled that a business partnership
existedandorderedthedefendantstopay.
Issue:
WhetherornotapartnershipexistedYES
Ratio:Tobeconsideredajuridicalpersonality,apartnershipmustfulfill
these requisites: (1) two or more persons bind themselves to contribute
money,propertyorindustrytoacommonfund;and(2)intentiononthepart
ofthepartnerstodividetheprofitsamongthemselves.Itmaybeconstituted
in any form; a public instrument is necessary only where immovable
property or real rights are contributed thereto. This implies that since a
contractofpartnershipisconsensual,anoralcontractofpartnershipisas
goodasawrittenone.PrivaterespondentAnaycontributedherexpertisein
thebusinessofdistributorshipofcookwaretothepartnershipandhence,

underthelaw,shewastheindustrialormanagingpartner.PetitionerBelo
hadanproprietaryinterest.Hepresidedovermeetingsregardingmatters
affectingtheoperationofthebusiness.Moreover,hishavingauthorizedin
writinggivingAnay37%oftheproceedsofherpersonalsales,couldnotbe
interpretedotherwisethanthathehadaproprietaryinterestinthebusiness.
Thisisinconsistentwithhisclaimthathemerelyactedasaguarantor.
Ifindeedhewas,heshouldhavepresenteddocumentaryevidence.Also,
Art.2055requiresthataguarantymustbeexpressandtheStatuteofFrauds
requiresthatitmustbeinwriting.PetitionerTocaowasalsoacapitalistin
the partnership. She claimedthat she herselffinancedthe business. The
businessventureoperatedunderGeminesseEnterprisedidnotresultinan
employeremployee relationship between petitioners and private
respondent.First,Anayhadavoiceinthemanagementoftheaffairsofthe
cookwaredistributorshipandsecond,TocaoadmittedthatAnay,likeher,
received only commissions and transportation and representation
allowancesandnotafixedsalary.IfAnaywasanemployee,itisdifficultto
believethattheyrecievethesameincome.Also,thefactthattheyoperated
underthenameofGeminesseBUSORGCASEDIGESTSAtty.Charlie
Mendoza2Enterprise,asoleproprietorship,isofnomoment.Saidbusiness
namewasusedonlyforpracticalreasonsitwasutilizedasthecommon
nameforpetitionerTocaosvariousbusinessactivities,whichincludedthe

distributorshipofcookware.Thepartnershipexistsuntildissolvedunderthe
law.Sincethepartnershipcreatedbypetitionersandprivaterespondenthas
no fixed term and is therefore a partnership at will predicated on their
mutualdesireandconsent,itmaybedissolvedbythewillofapartner.
Petitioners Tocaos unilateral exclusion of private respondent from the
partnershipisshownbyhermemototheCubaoofficeplainlystatingthat
privaterespondentwas,asofOctober9,1987,nolongerthevicepresident
forsalesofGeminesseEnterprise.Bythatmemo,petitionerTocaoeffected
herownwithdrawalfromthepartnershipandconsideredherselfashaving
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
petitionersandprivaterespondentisordereddissolved,andthepartiesare
orderedtoeffectthewindingupandliquidationofthepartnershippursuant
tothepertinentprovisionsoftheCivilCode.Petitionersareorderedtopay
Anays 10% share in the profits, after accounting, 5% overriding
commissionforthe150cookwaresetsavailablefordispositionsincethe
timeprivaterespondentwaswrongfullyexcludedfromthepartnershipby
petitioner,overridingcommissiononthetotalproduction,aswellasmoral
andexemplarydamages,andattorneysfees