[G.R. No. L-49982. April 27, 1988.]
ELIGIO ESTANISLAO, JR., petitioner, vs. THE
HONORABLE COURT OF APPEALS, REMEDIOS ESTANISLAO, EMILIO and LEOCADIO SANTIAGO,
respondents.
Agustin O. Benitez for petitioner.
Benjamin C. Yatco for private respondents.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS;
PARTNERSHIP; FORMED WHERE MEMBERS OF THE SAME FAMILY BOUND THEMSELVES TO
CONTRIBUTE MONEY TO A COMMON FUND WITH THE INTENTION OF DIVIDING THE PROFITS
AMONG THEMSELVES. — The Joint Affidavit of April 11, 1966 (Exhibit A), clearly
stipulated by the members of the same family that the P15,000.00 advance rental
due to them from SHELL shall augment their "capital investment" in
the operation of the gasoline station. Moreover other evidence in the record
shows that there was in fact such partnership agreement between the parties.
This is attested by the testimonies of private respondent Remedios Estanislao
and Atty. Angeles. Petitioner submitted to private respondents periodic
accounting of the business. Petitioner gave a written authority to private
respondent Remedios Estanislao, his sister, to examine and audit the books of
their "common business" (aming negosyo). Respondent Remedios assisted
in the running of the business. There is no doubt that the parties hereto
formed a partnership when they bound themselves to contribute money to a common
fund with the intention of dividing the profits among themselves.
2. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT
OF THE COURT OF APPEALS, GENERALLY CONCLUSIVE ON APPEAL. — The findings of
facts of the respondent court are conclusive in this proceeding, and its
conclusion based on the said facts are in accordance with the applicable law.
D E C I S I O N
GANCAYCO, J p:
By this petition for certiorari the Court
is asked to determine if a partnership exists between members of the same
family arising from their joint ownership of certain properties.
Petitioner and private respondents are
brothers and sisters who are co-owners of certain lots at the corner of
Annapolis and Aurora Blvd., Quezon City which were then being leased to the
Shell Company of the Philippines Limited (SHELL). They agreed to open and
operate a gas station thereat to be known as Estanislao Shell Service Station
with an initial investment of P15,000.00 to be taken from the advance rentals
due to them from SHELL for the occupancy of the said lots owned in common by
them. A joint affidavit was executed by them on April 11, 1966 which was
prepared by Atty. Democrito Angeles. 1 They agreed to help their brother, petitioner
herein, by allowing him to operate and manage the gasoline service station of
the family. They negotiated with SHELL. For practical purposes and in order not
to run counter to the company's policy of appointing only one dealer, it was
agreed that petitioner would apply for the dealership. Respondent Remedios
helped in co-managing the business with petitioner from May 3, 1966 up to
February 16, 1967.
On May 26, 1966, the parties herein entered
into an Additional Cash Pledge Agreement with SHELL wherein it was reiterated
that the P15,000.00 advance rental shall be deposited with SHELL to cover
advances of fuel to petitioner as dealer with a proviso that said agreement
"cancels and supersedes the Joint Affidavit dated 11 April 1966 executed
by the co-owners." 2
For sometime, the petitioner submitted
financial statements regarding the operation of the business to private
respondents, but thereafter petitioner failed to render subsequent accounting.
Hence through Atty. Angeles, a demand was made on petitioner to render an
accounting of the profits.
The financial report of December 31, 1968
shows that the business was able to make a profit of P87,293.79 and that by the
year ending 1969, a profit of P150,000.00 was realized. 3
Thus, on August 25, 1970 private
respondents filed a complaint in the Court of First Instance of Rizal against
petitioner saying among others that the latter be ordered:
"1. to execute a public document
embodying all the provisions of the partnership agreement entered into between
plaintiffs and defendants provided in Article 1771 of the New Civil Code;
"2. to render a formal accounting of
the business operation covering the period from May 6, 1966 up to December 21,
1968 and from January 1, 1969 up to the time the order is issued and that the
same be subject to proper audit;
"3. to pay the plaintiffs their lawful
shares and participation in the net profits of the business in an amount of no
less than P150,000.00 with interest at the rate of 1% per month from date of
demand until full payment thereof for the entire duration of the business; and
"4. to pay the plaintiffs the amount
of P10,000.00 as attorney's fees and costs of the suit." (pp. 13-14 Record
on Appeal.)"
After trial on the merits, on October 15,
1975, Hon. Lino Anover, who was then the temporary presiding judge of Branch IV
of the trial court, rendered judgment dismissing the complaint and counterclaim
and ordering private respondents to pay petitioner P3,000.00 attorney's fee and
costs. Private respondent filed a motion for reconsideration of the decision.
On December 1, 1975, Hon. Ricardo Tensuan who was the newly appointed presiding
judge of the same branch, set aside the aforesaid decision and rendered another
decision in favor of said respondents.
The dispositive part thereof reads as
follows:
'WHEREFORE, the Decision of this Court
dated October 14, 1975 is hereby reconsidered and a new judgment is hereby
rendered in favor of the plaintiffs and as against the defendant:
(1) Ordering the defendant to execute a
public instrument embodying all the provisions of the partnership agreement
entered into between plaintiffs and defendant as provided for in Article 1771,
Civil Code of the Philippines;
(2) Ordering the defendant to render a
formal accounting of the business operation from April 1969 up to the time this
order is issued, the same to be subject to examination and audit by the
plaintiff;
(3) Ordering the defendant to pay
plaintiffs their lawful shares and participation in the net profits of the
business in the amount of P150,000.00, with interest thereon at the rate of One
(1%) Per Cent per month from date of demand until full payment thereof;
(4) Ordering the defendant to pay the
plaintiffs the sum of P5,000.00 by way of attorney's fees of plaintiffs' counsel;
as well as the costs of suit." (pp. 161-162. Record on Appeal)."
Petitioner then interposed an appeal to the
Court of Appeals enumerating seven (7) errors allegedly committed by the trial
court. In due course, a decision was rendered by the Court of Appeals on
November 28, 1978 affirming in toto the decision of the lower court with costs
against petitioner. *
A motion for reconsideration of said
decision filed by petitioner was denied on January 30, 1979. Not satisfied
therewith, the petitioner now comes to this court by way of this petition for
certiorari alleging that the respondent court erred:
"1. In interpreting the legal import
of the Joint Affidavit (Exh. "A") vis-a-vis the Additional Cash
Pledge Agreement (Exhs. "B-2," "6," and "L"); and
2. In declaring that a partnership was
established by and among the petitioner and the private respondents as regards
the ownership and/or operation of the gasoline service station business."
Petitioner relies heavily on the provisions
of the Joint Affidavit of April 11, 1966 (Exhibit A) and the Additional Cash
Pledge Agreement of May 20, 1966 (Exhibit 6) which are herein reproduced -
(a) The joint Affidavit of April 11, 1966,
Exhibit A reads:
"(1) That we are the Lessors of two
parcels of land fully described in Transfer Certificates of Title Nos. 45071
and 71244 of the Register of Deeds of Quezon City, in favor of the LESSEE -
SHELL COMPANY OF THE PHILIPPINES LIMITED, a corporation duly licensed to do
business in the Philippines;
"(2) That we have requested the said
SHELL COMPANY OF THE PHILIPPINES LIMITED, advanced rentals in the total amount
of FIFTEEN THOUSAND PESOS (P15,000.00) Philippine Currency, so that we can use
the said amount to augment our capital investment in the operation of that
gasoline station constructed by the said company on our two lots aforesaid by
virtue of an outstanding Lease Agreement we have entered into with the said
company.
"(3) That the said SHELL COMPANY OF
THE PHILIPPINES LIMITED out of its benevolence and desire to help us in
augmenting our capital investment in the operation of the said gasoline
station, has agreed to give us the said amount of P15,000.00, which amount will
partake the nature of ADVANCED RENTALS;
"(4) That we have freely and
voluntarily agreed that upon receipt of the said amount of FIFTEEN THOUSAND
PESOS (P15,000,00) from the SHELL COMPANY OF THE PHILIPPINES LIMITED, the said
sum as ADVANCED RENTALS to us be applied as monthly rentals for the said two
lots under our Lease Agreement starting on the 25th of May, 1966 until such
time that the said amount of P15,000.00 be applicable, which time to our
estimate will cover at four and one-half months from May 25, 1966 or until the
10th of October, 1966 more or less;
"(5) That we have likewise agreed
among ourselves that the SHELL COMPANY OF THE PHILIPPINES LIMITED execute an
instrument for us to sign embodying our conformity that the said amount that it
will generously grant us as requested be applied as ADVANCED RENTALS; and
"(6) FURTHER AFFIANTS SAYETH NOT.'
(b) The Additional Cash Pledge Agreement of
May 20, 1966, Exhibit 6, is as follows:
"WHEREAS, under the Lease Agreement
dated 13th November, 1963 (identified as doc. Nos. 491 & 1407, Page Nos. 99
& 66, Book Nos. V & 111, Series of 1963 in the Notarial Registers of
Notaries Public Rosauro Marquez, and R.D. Liwanag, respectively) executed in
favour of SHELL by the herein CO-OWNERS and another Lease Agreement dated 19th
March 1964 . . . also executed in favour of SHELL by CO-OWNERS Remedios and
MARIA ESTANISLAO for the lease of adjoining portions of two parcels of land at
Aurora Blvd./Annapolis, Quezon City, the CO-OWNERS RECEIVE a total monthly
rental of PESOS THREE THOUSAND THREE HUNDRED EIGHTY TWO AND 29/100 (P3,382.29),
Philippine Currency;
"WHEREAS, CO-OWNER Eligio Estanislao,
Jr. is the Dealer of the Shell Station constructed on the leased land, and as
Dealer under the Cash Pledge Agreement dated 11th May 1966, he deposited to
SHELL in cash the amount of PESOS TEN THOUSAND (P10,000), Philippine Currency,
to secure his purchases on credit of Shell petroleum products; . . .
"WHEREAS, said DEALER, in his desire
to be granted an increased credit limit up to P25,000, has secured the
conformity of his CO-OWNERS to waive and assign to SHELL the total monthly
rentals due to all of them to accumulate the equivalent amount of P15,000,
commencing 24th May 1966, this P15,000 shall be treated as additional cash
deposit to SHELL under the same terms and conditions of the aforementioned Cash
Pledge Agreement dated 11th May 1966.
NOW, THEREFORE, for and in consideration of
the foregoing premises, and the mutual covenants among the CO-OWNERS herein and
SHELL, said parties have agreed and hereby agree as follows:
"1. The CO-OWNERS do hereby waive in
favour of DEALER the monthly rentals due to all CO-OWNERS, collectively, under
the above described two Lease Agreements, one dated 13th November 1963 and the
other dated 19th March 1964 to enable DEALER to increase his existing cash
deposit to SHELL, from P10,000 to P25,000, for such purpose, the SHELL,
CO-OWNERS and DEALER hereby irrevocably assign to SHELL the monthly rental of
P3,382.29 payable to them respectively as they fall due, monthly, commencing
24th May 1966, until such time that the monthly rentals accumulated, shall be
equal to P15,000.
"2. The above stated monthly rentals
accumulated shall be treated as additional cash deposit by DEALER to SHELL,
thereby increasing his credit limit from P10,000 to P25,000. This agreement,
therefore, cancels and supersedes the Joint Affidavit dated 11 April 1966
executed by the CO-OWNERS.
"3. Effective upon the signing of this
agreement, SHELL agrees to allow DEALER to purchase from SHELL petroleum
products, on credit, up to the amount of P25,000.
"4. This increase in the credit limit
shall also be subject to the same terms and conditions of the above-mentioned
Cash Pledge Agreement dated 11th May 1966." (Exhs. "B-2,"
"L," and "6"; emphasis supplied)
In the aforesaid Joint Affidavit of April
11, 1966 (Exhibit A), it is clearly stipulated by the parties that the
P15,000.00 advance rental due to them from SHELL shall augment their
"capital investment" in the operation of the gasoline station, which
advance rentals shall be credited as rentals from May 25, 1966 up to four and
one-half months or until 10 October 1966, more or less covering said
P15,000.00.
In the subsequent document entitled
`Additional Cash Pledge Agreement" above reproduced (Exhibit 6), the
private respondents and petitioners assigned to SHELL the monthly rentals due
them commencing the 24th of May 1966 until such time that the monthly rentals
accumulated equal P15,000.00 which private respondents agree to be a cash
deposit of petitioner in favor of SHELL to increase his credit limit as dealer.
As above-stated it provided therein that "This agreement, therefore,
cancels and supersedes the Joint Affidavit dated 11 April 1966 executed by the
CO-OWNERS."
Petitioner contends that because of the
said stipulation cancelling and superseding that previous Joint Affidavit,
whatever partnership agreement there was in said previous agreement had thereby
been abrogated. We find no merit in this argument. Said cancelling provision
was necessary for the Joint Affidavit speaks of P15,000.00 advance rentals
starting May 25, 1966 while the latter agreement also refers to advance rentals
of the same amount starting May 24, 1966. There is, therefore, a duplication of
reference to the P15,000.00 hence the need to provide in the subsequent
document that it "cancels and supersedes" the previous one. True it
is that in the latter document, it is silent as to the statement in the Joint
Affidavit that the P15,000.00 represents the "capital investment" of
the parties in the gasoline station business and it speaks of petitioner as the
sole dealer, but this is as it should be for in the latter document SHELL was a
signatory and it would be against its policy if in the agreement it should be
stated that the business is a partnership with private respondents and not a
sole proprietorship of petitioner.
Moreover other evidence in the record shows
that there was in fact such partnership agreement between the parties. This is
attested by the testimonies of private respondent Remedios Estanislao and Atty.
Angeles. Petitioner submitted to private respondents periodic accounting of the
business. 4 Petitioner gave a written authority to private respondent Remedios
Estanislao, his sister, to examine and audit the books of their "common
business" (aming negosyo). 5 Respondent Remedios assisted in the running
of the business. There is no doubt that the parties hereto formed a partnership
when they bound themselves to contribute money to a common fund with the
intention of dividing the profits among themselves. 6 The sole dealership by
the petitioner and the issuance of all government permits and licenses in the
name of petitioner was in compliance with the afore-stated policy of SHELL and
the understanding of the parties of having only one dealer of the SHELL
products.
Further, the findings of facts of the
respondent court are conclusive in this proceeding, and its conclusion based on
the said facts are in accordance with the applicable law.
WHEREFORE, the judgment appealed from is
AFFIRMED in toto with costs against petitioner. This decision is immediately
executory and no motion for extension of time to file a motion for
reconsideration shall be entertained.
SO ORDERED.
Narvasa, Cruz and Griño-Aquino, JJ.,
concur.
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