GR 127405; (October, 2000) (Digest)
G.R. No. 127405; October 4, 2000
MARJORIE TOCAO and WILLIAM T. BELO, petitioners, vs. COURT OF APPEALS and NENITA A. ANAY, respondents.
FACTS
Private respondent Nenita Anay entered into a joint venture with petitioners Marjorie Tocao and William Belo for the importation and distribution of kitchen cookware. Belo acted as the financier, Tocao as president and general manager, and Anay, leveraging her connections with the manufacturer West Bend Company, as head of marketing and later vice-president for sales. Their oral agreement entitled Anay to a percentage of net profits, an overriding commission, and sales commissions. The business operated successfully under the name Geminesse Enterprise, registered as Tocao’s sole proprietorship. In a July 1987 letter to the U.S. Embassy, Tocao explicitly referred to Anay as a “business partner.” However, in October 1987, Tocao effectively ousted Anay from the business, barring her from the offices. Anay’s subsequent demands for her unpaid commissions and profit share were ignored.
ISSUE
The primary issue is whether a partnership existed between Anay, Tocao, and Belo despite the lack of a written agreement and the business being registered as a sole proprietorship.
RULING
Yes, a partnership existed. The Supreme Court affirmed the lower courts’ decisions, ruling that the essence of a partnership is the mutual agreement to contribute money, property, or industry to a common fund with the intention of dividing the profits. The absence of a public instrument does not invalidate the contract of partnership; it merely affects its registration and the parties’ rights to sue each other to enforce it, but does not preclude its existence. The conduct of the parties clearly indicated a partnership: Belo provided capital, Tocao managed operations, and Anay contributed her industry and expertise by securing the distributorship and organizing the sales force. Their agreement to share profits—Anay’s 10% of net profits and various commissions—is the strongest evidence of a partnership. Tocao’s own letter identifying Anay as a “business partner” was a crucial admission. The registration of the enterprise as a sole proprietorship in Tocao’s name did not negate the underlying partnership agreement among the three individuals. Consequently, Anay was entitled to her share in the profits and unpaid commissions. The Court upheld the award for these amounts, plus moral and exemplary damages for the unjust termination of her partnership interest.