FEDERICO JARANTILLA, JR. vs. ANTONIETA JARANTILLA, BUENAVENTURA REMOTIGUE, substituted by CYNTHIA REMOTIGUE, DOROTEO JARANTILLA and TOMAS JARANTILLA

G.R. No. 154486               December 1, 2010

FACTS

The spouses Andres Jarantilla and Felisa Jaleco were survived by eight children. Petitioner Federico Jarantilla, Jr. is the grandchild of the late Jarantilla spouses by their son. Petitioner was one of the defendants in the complaint before the RTC while Antonieta Jarantilla, his aunt, was the plaintiff therein.

In 1948, the Jarantilla heirs extrajudicially partitioned amongst themselves the real properties of their deceased parents. With the exception of the real property adjudicated to Pacita Jarantilla, the heirs also agreed to allot the produce of the said real properties for the years 1947-1949 for the studies of Rafael and Antonieta Jarantilla. In the same year, the spouses Rosita Jarantilla and Vivencio Deocampo entered into an agreement with the spouses Buenaventura Remotigue and Conchita Jarantilla to provide mutual assistance to each other by way of financial support to any commercial and agricultural activity on a joint business arrangement. This business relationship proved to be successful as they were able to establish a manufacturing and trading business, acquire real properties, and construct buildings, among other things. This partnership ended in 1973 when the parties, in an "Agreement," voluntarily agreed to completely dissolve their "joint business relationship/arrangement."

On April 29, 1957, the spouses Buenaventura and Conchita Remotigue executed a document wherein they acknowledged that while registered only in Buenaventura Remotigue’s name, they were not the only owners of the capital of the businesses Manila Athletic Supply, Remotigue Trading and Remotigue Trading. In this same "Acknowledgement of Participating Capital," they stated the participating capital of their co-owners.

The present case stems from the amended complaint filed by Antonieta Jarantilla against Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla and Tomas Jarantilla, for the accounting of the assets and income of the co-ownership, for its partition and the delivery of her share corresponding to 8%, and for damages. Antonieta claimed that in 1946, she had entered into an agreement with Conchita and Buenaventura Remotigue, Rafael Jarantilla, and Rosita and Vivencio Deocampo to engage in business. Antonieta alleged that the initial contribution of property and money came from the heirs’ inheritance, and her subsequent annual investment of P7,500.00 as additional capital came from the proceeds of her farm. Antonieta also alleged that she had helped in the management of the business they co-owned without receiving any salary. Her salary was supposedly rolled back into the business as additional investments in her behalf. Antonieta further claimed co-ownership of certain properties in the name of the defendants since the only way the defendants could have purchased these properties were through the partnership as they had no other source of income. The respondents, including petitioner denied having formed a partnership with Antonieta.

The RTC rendered judgment in favor of Antonieta and Federico. On appeal, the CA set the RTC Decision. Petitioner filed a petition for review to the SC.

ISSUE

Whether there exist a partnership

RULING

The common ownership of property does not itself create a partnership between the owners, though they may use it for the purpose of making gains; and they may, without becoming partners, agree among themselves as to the management, and use of such property and the application of the proceeds therefrom. Under Article 1767 of the Civil Code, there are two essential elements in a contract of partnership: (a) an agreement to contribute money, property or industry to a common fund; and (b) intent to divide the profits among the contracting parties. It is not denied that all the parties in this case have agreed to contribute capital to a common fund to be able to later on share its profits. They have admitted this fact, agreed to its veracity, and even submitted one common documentary evidence to prove such partnership - the Acknowledgement of Participating Capital.

The Acknowledgement of Participating Capital is a duly notarized document voluntarily executed by Conchita Jarantilla-Remotigue and Buenaventura Remotigue in 1957. Petitioner does not dispute its contents and is actually relying on it to prove his participation in the partnership. The petitioner has failed to prove that there exists a trust over the subject real properties. Aside from his bare allegations, he has failed to show that the respondents used the partnerships money to purchase the said properties. Even assuming arguendo that some partnership income was used to acquire these properties, the petitioner should have successfully shown that these funds came from his share in the partnership profits. After all, by his own admission, and as stated in the Acknowledgement of Participating Capital, he owned a mere 6% equity in the partnership.