Sardane v. Court of Appeals

G.R. No. L-47045, 22 November 1988

Doctrine:
While the receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, no such inference shall be drawn if such profits were received in payment as wages of an employee.

FACTS:

Petitioner brought an action in the collection of a sum of P5,217.25 based on promissory notes executed by the herein private respondent Nobio Sardane in favor of the herein petitioner.

Petitioner based his right to collect on the promissory notes executed by respondent on different dates. It has been established in the trial court that on many occasions, the petitioner demanded the payment of the total amount of P5,217.25. The failure of the private respondent to pay the said amount prompted the petitioner to seek the services of lawyer who made a letter (Exhibit 1) formally demanding the return of the sum loaned.

Because of the failure of the private respondent to heed the demands extrajudicially made by the petitioner, the latter was constrained to bring an action for collection of sum of money. During the scheduled day for trial, private respondent failed to appear and to file an answer. On motion of petitioner, he was granted to present evidence ex parte. Private respondent filed a motion to lift the order of default which was granted by the City Court in an order dated May 24, 1976, taking into consideration that the answer was filed within two hours after the hearing of the evidence presented ex-parte by the petitioner.

The trial court favored plaintiff’s petition. One of the questions raised in the review was whether the oral testimony for the therein private respondent Sardane that a partnership existed between him and therein petitioner Acojedo are admissible to vary the meaning of the abovementioned promissory notes.

ISSUE:

Whether or not a partnership exists between the parties.

RULING:

The Court of Appeals held, and agreed with by the Court, that even if evidence aliunde other than the promissory notes may be admitted to alter the meaning conveyed thereby, still the evidence is insufficient to prove that a partnership existed between the private parties hereto. As manager of the Basnig Sarcado naturally some degree of control over the operations and maintenance thereof had to be exercised by herein petitioner. The fact that he had received 50% of the net profits does not conclusively establish that he was a partner of the private respondent herein.

Article 1769(4) of the Civil Code is explicit that while the receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, no such inference shall be drawn if such profits were received in payment as wages of an employee.

Furthermore, herein petitioner had no voice in the management of the affairs of the Basnig. Under similar facts, this Court in the early case of Fortis vs. Gutierrez Hermanos, in denying the claim of the plaintiff therein that he was a partner in the business of the defendant, declared:

This contention cannot be sustained. It was a mere contract of employment. The plaintiff had no voice nor vote in the management of the affairs of the company. The fact that the compensation received by him was to be determined with reference to the profits made by the defendant in their business did not in any sense make him a partner therein.

Hence, in view of the foregoing, there is no partnership that exists in the case.

*Case digest by Radolf Zell Adasa JD-IV, Andres Bonifacio Law School, SY 2019-2020

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