Aaaa, bus org full txt

8/12/2019 Aaaa, bus org full txt

1/47

G.R. No. 78133 October 18, 1988

MARIANO P. PASCUAL and RENATO P. RAGON,!et"t"oner#,$#.T%E COMMISSIONER O& INTERNAL RE'ENUE and COURT O&TA( APPEALS, re#!ondent#.

e )a C*e#ta, e )a# A)a# and Ca))anta La+O"ce# or !et"t"oner#.

T-e So)"c"tor Genera) or re#!ondent#

GANCACO, /.0

T-e d"#t"nct"on bet+een coo+ner#-"! and an*nre2"#tered !artner#-"! or o"nt $ent*re or"nco4e ta5 !*r!o#e# "# t-e "##*e "n t-"#!et"t"on.

On /*ne 66, 19, !et"t"oner# bo*2-t t+o 6:!arce)# o )and ro4 Sant"a2o ;ernard"no, et a).and on Ma< 68, 19, t-e< bo*2-t anot-er t-ree3: !arce)# o )and ro4 /*an Ro=*e. T-e "r#t

t+o !arce)# o )and +ere #o)d b< !et"t"oner# "n198 toMaren"r e$e)o!4ent Cor!orat"on, +-")e t-et-ree !arce)# o )and +ere #o)d b< !et"t"oner# toEr)"nda Re, +-")et-e< rea)"?ed a net !ro"t o P>,>>>.>> "n t-e#a)e 4ade "n 197>. T-e corre#!ond"n2 ca!"ta)2a"n# ta5e# +ere !a"d b< !et"t"oner# "n 1973 and197@ b< a$a")"n2 o t-e ta5 a4ne#t"e# 2ranted "nt-e #a"d @. In d*e co*r#e, t-e re#!ondentco*rt b< a 4aor"t< dec"#"on o Marc- 3>, 1987, 6a"r4ed t-e dec"#"on and act"on taen b8,86.>>. &"$e : da8.3>b< +a< o renta)#. See4"n2)


3/47

)"4"ted to t-e con#er$at"on or !re#er$at"on ot-e co44on *nd or e$en t-e !ro!ert"e# ac=*"redb< t-e4. T-e c-aracter o -ab"t*a)"t< !ec*)"ar tob*#"ne## tran#act"on# en2a2ed "n or t-e !*r!o#eo 2a"n +a# !re#ent.

In t-e "n#tant ca#e, !et"t"oner# bo*2-t t+o 6:!arce)# o )and "n 19. T-e< d"d not #e)) t-e#a4e nor 4ae an< "4!ro$e4ent# t-ereon. In 19,t-e< bo*2-t anot-er t-ree 3: !arce)# o )andro4 one #e))er. It +a# on)< 198 +-en t-e< #o)d

t-e t+o 6: !arce)# o )and ater +-"c- t-e< d"dnot 4ae an< add"t"ona) or ne+ !*rc-a#e. T-ere4a"n"n2 t-ree 3: !arce)# +ere #o)d b< t-e4 "n197>. T-e tran#act"on# +ere "#o)ated. T-ec-aracter o -ab"t*a)"t< !ec*)"ar to b*#"ne##tran#act"on# or t-e !*r!o#e o 2a"n +a# not!re#ent.

In E$an2e)"#ta, t-e !ro!ert"e# +ere )ea#ed o*t totenant# or #e$era) .

T-*#, "n t-e conc*rr"n2 o!"n"on o Mr. /*#t"ceAn2e)o ;a*t"#ta "n E$an2e)"#ta -e #a"d0

I +"#- -o+e$er to 4ae t-e o))o+"n2 ob#er$at"onArt"c)e 179 o t-e ne+ C"$") Code )a


4/47

t-e"r net !ro"t# and a$a")ed o t-e ta5 a4ne#t>.>>

ad$ance renta) #-a)) be de!o#"ted +"t- S%ELL toco$er ad$ance# o *e) to !et"t"oner a# dea)er+"t- a !ro$"#o t-at #a"d a2ree4ent cance)# and#*!er#ede# t-e /o"nt A"da$"t dated 11 A!r")19 e5ec*ted b< t-e coo+ner#. 6

&or #o4et"4e, t-e !et"t"oner #*b4"tted "nanc"a)#tate4ent# re2ard"n2 t-e o!erat"on o t-eb*#"ne## to !r"$ate re#!ondent#, b*t t-erater!et"t"oner a")ed to render #*b#e=*entacco*nt"n2. %ence t-ro*2- Att>>.>> +a# rea)"?ed. 3

T-*#, on A*2*#t 6, 197> !r"$ate re#!ondent#")ed a co4!)a"nt "n t-e Co*rt o &"r#t In#tanceo R"?a) a2a"n#t !et"t"oner !ra,197, %on. R"cardo Ten#*an +-o +a# t-e ne+)>.>>: P-")"!!"ne C*rrenc>>.>>: ro4 -e S%ELLCOMPAN O& T%E P%ILIPPINES LIMITE, t-e #a"d #*4a# A'ANCE RENTALS to *# be a!!)"ed a# 4ont-)>>,-a# #ec*red t-e conor4"t< o -"# COOFNERS to+a"$e and a##"2n to S%ELL t-e tota) 4ont-)>> to P 6,>>>, or #*c- !*r!o#e, t-e S%ELL

COOFNERS and EALER -ereb< "rre$ocab)< a##"2n toS%ELL t-e 4ont-)< renta) o P 3,386.69 !a>>.

6. T-e abo$e #tated 4ont-)< renta)#acc*4*)ated #-a)) be treated a# add"t"ona) ca#-de!o#"t b< EALER to S%ELL, t-ereb< "n "ncrea#"n2-"# cred"t )"4"t ro4 P 1>,>>> to P 6,>>>. T-"#a2ree4ent, t-ereore, cance)# and #*!er#ede# t-e/o"nt a"da$"t dated 11 A!r") 19 e5ec*ted b>>.>> ad$ance renta)# #tart"n2 Ma< 6, 19+-")e t-e )atter a2ree4ent a)#o reer# to ad$ancerenta)# o t-e #a4e a4o*nt #tart"n2 Ma< 6@, 19.T-ere "#, t-ereore, a d*!)"cat"on o reerenceto t-e P 1,>>>.>> -ence t-e need to !ro$"de "nt-e #*b#e=*ent doc*4ent t-at "t cance)# and#*!er#ede# t-e !re$"o*# one. Tr*e "t "# t-at "nt-e )atter doc*4ent, "t "# #")ent a# to t-e#tate4ent "n t-e /o"nt A"da$"t t-at t-e P1,>>>.>> re!re#ent# t-e ca!"ta) "n$e#t4ent ot-e !art"e# "n t-e 2a#o)"ne #tat"on b*#"ne## and"t #!ea# o !et"t"oner a# t-e #o)e dea)er, b*tt-"# "# a# "t #-o*)d be or "n t-e )atter

doc*4ent S%ELL +a# a #"2nator< and "t +o*)d bea2a"n#t "t# !o)"c< " "n t-e a2ree4ent "t #-o*)dbe #tated t-at t-e b*#"ne## "# a !artner#-"! +"t-!r"$ate re#!ondent# and not a #o)e !ro!r"etor#-"!o !et"t"oner.

Moreo$er ot-er e$"dence "n t-e record #-o+# t-att-ere +a# "n act #*c- !artner#-"! a2ree4entbet+een t-e !art"e#. T-"# "# atte#ted b< t-ete#t"4on"e# o !r"$ate re#!ondent Re4ed"e#E#tan"#)ao and Att, 196

ANG PUE COMPAN, ET AL., !)a"nt"#a!!e))ant#,


7/47

$#.SECRETAR O& COMMERCE AN INUSTR, deendanta!!e))ee.

&e)"c"#"4o E. E#caran or !)a"nt"#a!!e))ant#.O"ce o t-e So)"c"tor Genera) or deendanta!!e))ee.

ION, /.0

Act"on or dec)arator< re)"e ")ed "n t-e Co*rt

o &"r#t In#tance o I)o")o b< An2 P*e Co4!an.

It a!!ear# t-at on Ma< 1, 193, An2 P*e and Tan

S"on2, bot- C-"ne#e c"t"?en#, or2an"?ed t-e!artner#-"! An2 P*e Co4!an< or a ter4 o "$e +a#enacted to re2*)ate t-e reta") b*#"ne##. It

!ro$"ded, a4on2 ot-er t-"n2#, t-at, ater "t#enact4ent, a !artner#-"! not +-o))< or4ed b6 P-"). 866:.

T-e !et"t"oner# conte#ted t-e a##e##4ent#. T+o/*d2e# o t-e Ta5 Co*rt #*#ta"ned t-e #a4e. /*d2eRoa=*"n d"##ented. %ence, t-e "n#tant a!!ea).

Fe -o)d t-at "t "# error to con#"der t-e!et"t"oner# a# -a$"n2 or4ed a !artner#-"! *nderart"c)e 177 o t-e C"$") Code #"4!)< beca*#et-e< a))e2ed)< contr"b*ted P178,7>8.16 to b*< t-et+o )ot#, re#o)d t-e #a4e and d"$"ded t-e !ro"ta4on2 t-e4#e)$e#.

To re2ard t-e !et"t"oner# a# -a$"n2 or4ed a

ta5ab)e *nre2"#tered !artner#-"! +o*)d re#*)t "no!!re##"$e ta5at"on and con"r4 t-e d"ct*4 t-att-e !o+er to ta5 "n$o)$e# t-e !o+er to de#tro


9/47

ded"cat"n2 t-e !ro!ert< to t-e *#e to +-"c- "t-ad been !*t b< t-e"r orebear#B t-e>>.>> re!re#ent"n2 t-e *n!a"d!r"ce o t-e )oat# not co$ered b< #a"dA2ree4entB

b. 16K "ntere#t !er ann*4 co*nted ro4 date o!)a"nt"H# "n$o"ce# and co4!*ted on t-e"rre#!ect"$e a4o*nt# a# o))o+#0

". Accr*ed "ntere#t o P73,661.>> on In$o"ce

No. 1@@>7 or P38,377.8> dated &ebr*ar< 9, 199>B

"". Accr*ed "ntere#t or P67,9>@.>6 on In$o"ceNo. 1@@13 or P1@,88.>> dated &ebr*ar< 13,199>B

""". Accr*ed "ntere#t o P16,96>.>> on In$o"ceNo. 1@@6 or P8,>>>.>> dated &ebr*ar< 19, 199>B

c. P>,>>>.>> a# and or attorne>.>> re!re#ent"n2 P>>.>> !er a!!earance "nco*rtB

d. P,>>>.>> re!re#ent"n2 P,>>>.>> 4ont-)


10/47


11/47

c: I t-e !roceed# o t-e #a)e t-e $e##e)#+")) be )e## t-an P,7>,>>>.>> +-ate$er t-ede"c"enc< #-a)) be #-o*)dered and !a"d to /L%o)d"n2 Cor!orat"on b< 13 L"4 Ton2 L"4B 13Anton"o C-*aB 13 Peter ao. 11

T-e tr"a) co*rt noted t-at t-e Co4!ro4"#eA2ree4ent +a# #")ent a# to t-e nat*re o t-e"rob)"2at"on#, b*t t-at o"nt )"ab")"t< co*)d be!re#*4ed ro4 t-e e=*a) d"#tr"b*t"on o t-e

!ro"t and )o##. 61

L"4 a!!ea)ed to t-e Co*rt o A!!ea)# CA: +-"c-,a# a)read< #tated, a"r4ed t-e RTC.

R*)"n2 o t-e Co*rt o A!!ea)#

In a"r4"n2 t-e tr"a) co*rt, t-e CA -e)d t-at!et"t"oner +a# a !artner o C-*a and ao "n a"#-"n2 b*#"ne## and 4a< t-*# be -e)d )"ab)e a# a#*c- or t-e "#-"n2 net# and )oat# !*rc-a#ed b, ;IR rec.: #-o+# t-at t-e -e"r# -a$e*nd"$"ded one-a) 16: "ntere#t "n ten !arce)#o )and +"t- a tota) a##e##ed $a)*e oP87,8>.>>, #"5 -o*#e# +"t- a tota) a##e##ed$a)*e o P17,9>.>> and an *ndeter4"ned a4o*nt tobe co))ected ro4 t-e Far a4a2e Co44"##"on.Later, t-e< rece"$ed ro4 #a"d Co44"##"on t-ea4o*nt o P>,>>>.>>, 4ore or )e##. T-"# a4o*nt+a# not d"$"ded a4on2 t-e4 b*t +a# *#ed "n t-ere-ab")"tat"on o !ro!ert"e# o+ned b< t-e4 "nco44on t.#.n., !. @:. O t-e ten !arce)# o)and aore4ent"oned, t+o +ere ac=*"red ater t-edeat- o t-e decedent +"t- 4one< borro+ed ro4

t-e P-")"!!"ne Tr*#t Co4!an< "n t-e a4o*nt oP76,173.>> t.#.n., !. 6@B E5-"b"t 3, !!. 313@;IR rec.:.

T-e !roect o !art"t"on a)#o #-o+# t-at t-ee#tate #-are# e=*a))< +"t- Loren?o T. OJa, t-ead4"n"#trator t-ereo, "n t-e ob)"2at"on oP9@,973.>>, con#"#t"n2 o )oan# contracted b< t-e)atter +"t- t-e a!!ro$a) o t-e Co*rt #ee !. 3o E5-"b"t DB or #ee !. 7@, ;IR rec.:.

A)t-o*2- t-e !roect o !art"t"on +a# a!!ro$ed b,@>.>> "n 19@9 to P@8>,>>.6> "n 19 a# canbe 2)eaned ro4 t-e o))o+"n2 .>>

P17,9>.>>

19>

P6@,7.

168,.76

9,>7.6

191

1,3>1.31

16>,[email protected]

11>,>.11

196

7,967.6

87,>.68

16,[email protected]

193

1,68.67

8@,96.8

11,@3.83

19@

3,63.37

99,>>1.6>

17,96.>@

19

1>>,78.>>

16>,[email protected]

19,66.6

19

17,>68.8

13,[email protected]

19,66.6

See E5-"b"t# 3 D t.#.n., !!. 66, 66, @>,>, 1>61>@:

&ro4 #a"d "n$e#t4ent# and !ro!ert"e# !et"t"oner#der"$ed #*c- "nco4e# a# !ro"t# ro4 "n#ta))4ent#a)e# o #*bd"$"ded )ot#, !ro"t# ro4 #a)e# o#toc#, d"$"dend#, renta)# and "ntere#t# #ee !.3 o E5-"b"t 3B !. 36, ;IR rec.B t.#.n., !!. 3738:. T-e #a"d "nco4e# are recorded "n t-e boo#o acco*nt e!t b< Loren?o T. OJa +-ere t-e


16/47

corre#!ond"n2 #-are# o t-e !et"t"oner# "n t-enet "nco4e or t-e .>>Tota) ............................................................... P1>,1>6.>

19

Net "nco4e a# !er "n$e#t"2at"on ................P9,[email protected]

Inco4e ta5 d*et-ereon ............................... 13,8@9.>>

6K#*rc-ar2e .............................................. 3,@6.6Co4!ro4"#e or non")"n2 .......................... >.>>Tota) ............................................................... P17,31.6

See E5-"b"t 13, !a2e >, ;IR record#:

U!on *rt-er con#"derat"on o t-e ca#e, t-e 6K#*rc-ar2e +a# e)"4"nated "n )"ne +"t- t-e r*)"n2o t-e S*!re4e Co*rt "n Co))ector $. ;atan2a#Tran#!ortat"on Co., G.R. No. L996, /an. ,

198, #o t-at t-e =*e#t"oned a##e##4ent reer##o)e)< to t-e "nco4e ta5 !ro!er or t-e


17/47

re#!ect"$e #-are# "n t-e "n-er"tance areconcerned, t-e tota) "nco4e t-ereo #-o*)d becon#"dered a# t-at o coo+ner# and not o t-e*nre2"#tered !artner#-"! And 3: a##*4"n2 a2a"nt-at t-e< are ta5ab)e a# an *nre2"#tered!artner#-"!, #-o*)d not t-e $ar"o*# a4o*nt#a)read< !a"d b< t-e4 or t-e #a4e > "n )andacco*nt and P17,9>.>> "n b*")d"n2 acco*nt "n

19@9 to P17,>68.8 "n "n$e#t4ent acco*nt,[email protected] "n )and acco*nt and P19,66.6 "nb*")d"n2 acco*nt "n 19. And a)) t-e#e beca4e!o##"b)e beca*#e, ad4"tted)6P-"). 1@>, "t +a# #tated, a4on2 t-e rea#on# or-o)d"n2 t-e a!!e))ant# t-ere"n to be *nre2"#teredco!artner# or ta5 !*r!o#e#, t-at t-e"r co44on*nd +a# not #o4et-"n2 t-e< o*nd a)read< "ne5"#tence and t-at "t +a# not a !ro!ert

!artner#-"!. T-"#, Fe -o)d, "# t-e c)ear "ntento t-e )a+.

L"e+"#e, t-e t-"rd =*e#t"on o !et"t"oner#a!!ear# to -a$e been ade=*ate)< re#o)$ed b< t-eTa5 Co*rt "n t-e aore4ent"oned re#o)*t"onden


20/47

!et"t"oner t-ere"n, -a$"n2 been correct)< and*#t""ed)< #*#ta"ned b< #a"d co*rt +"t-o*t an>.>>. E5-"b"t E "# +-at"# co44on)< no+n to t-e )a>.>>: ONL,to be !a"d on or beore ece4ber 6, 197. S2d:Nob"o Sardane.H E5-"b"t G and % are bot- $a)e#H"n$o)$"n2 t-e #a4e a4o*nt o one -*ndred !e#o#,and dated A*2*#t 6, 1976 and Se!te4ber 16, 1976re#!ect"$e)


21/47


22/47


23/47


24/47

In Tan "an#en2 Tan S"* P"c $#. Ec-a*? Tan S"*co P-")., 1:, "t +a# -e)d t-at t-e "nd"n2# oact# 4ade b< a reeree a!!o"nted *nder t-e!ro$"#"on# o #ect"on 13 o t-e Code o C"$")Proced*re #tand *!on t-e #a4e ba#"#, +-ena!!ro$ed b< t-e Co*rt, a# "nd"n2# 4ade b< t-e*d2e -"4#e). And "n Dr"edt $#. E. C. McC*))o2- Co.37 P-")., @7@:, t-e co*rt -e)d0 Under#ect"on 1@> o t-e Code o C"$") Proced*re "t "#4ade t-e d*t< o t-e co*rt to render *d24ent "naccordance +"t- t-e re!ort o t-e reeree *n)e##

t-e co*rt #-a)) *n)e## or ca*#e #-o+n #et a#"det-e re!ort or reco44"t "t to t-e reeree. T-"#!ro$"#"on !)ace# *!on t-e )"t"2ant !art"e# o t-ed*t< o d"#co$er"n2 and e5-"b"t"n2 to t-e co*rtan< error t-at 4a< be conta"ned t-ere"n. T-ea!!e))ant# #tated t-e 2ro*nd# or t-e"robect"on. T-e tr"a) e5a4"ned t-e e$"dence andt-e co44"##"onerH# re!ort, and acce!ted t-e"nd"n2# o act 4ade "n t-e re!ort. Fe "nd nocon$"nc"n2 ar2*4ent# on t-e a!!e))antH# br"e to*#t"< a re$er#a) o t-e tr"a) co*rtH#conc)*#"on ad4"tt"n2 t-e co44"##"onerH# "nd"n2#.

T-ere "# no =*e#t"on t-at T*rn*-an Po)"#t"co Co. "# an *n)a+*) !artner#-"! U.S. $#. ;a2*"o,

39 P-")., 96:, b*t t-e a!!e))ant# a))e2e t-atbeca*#e "t "# #o, #o4e c-ar"tab)e "n#t"t*t"on to+-o4 t-e !artner#-"! *nd# 4a< be ordered to bet*rned o$er, #-o*)d be "nc)*ded, a# a !art A*2*#t 1, 6>>1

LILI;ET% SUNGAC%AN and CECILIA SUNGA,!et"t"oner#,$#.LAM;ERTO T. C%UA, re#!ondent.

GONAGAREES, /.0

;eore *# "# a !et"t"on or re$"e+ on cert"orar"*nder R*)e @ o t-e R*)e# o Co*rt o t-eec"#"on1 o t-e Co*rt o A!!ea)# dated /an*ar>> "n t-e ca#e ent"t)ed La4berto T. C-*a

$#. L")"bet- S*n2a C-an and Cec")"a S*n2a and ot-e Re#o)*t"on dated Ma< 63, 6>>> den>,>>>.>> a# -"# co*nter!art contr"b*t"on, +"t-t-e "ntent"on t-at t-e !ro"t# +o*)d be e=*a))>,>>>.>> and !art"a))< !a"d t-e #a4e tore#!ondent. Pet"t"oner L")"bet- a))e2ed)>>.>> !er 4ont-, +"t- )e2a) rate o"ntere#t *nt") *))< !a"dB

: ORERING t-e4 to +"nd *! t-e aa"r# o t-e!artner#-"! and ter4"nate "t# b*#"ne## act"$"t"e#!*r#*ant to )a+, ater de)"$er"n2 to t-e!)a"nt" a)) t-e "ntere#t, #-are#,!art"c"!at"on and e=*"t< "n t-e !artner#-"!, ort-e $a)*e t-ereo "n 4one< or 4one


27/47


28/47

entrenc-ed "# t-e r*)e t-at +-en "t "# t-ee5ec*tor or ad4"n"#trator or re!re#entat"$e# ot-e e#tate# t-at #et# *! t-e co*nterc)a"4, t-e!)a"nt", -ere"n re#!ondent, 4a< te#t"< toocc*rrence# beore t-e deat- o t-e decea#ed todeeat t-e co*nterc)a"4.13 Moreo$er, a# deendant"n t-e co*nterc)a"4, re#!ondent "# notd"#=*a)""ed ro4 te#t"


29/47

ANTONIA TORRES a##"#ted b< -er -*#band, ANGELOTORRESB and EMETERIA ;ARING, !et"t"oner#,$#.COURT O& APPEALS and MANUEL TORRES, re#!ondent#.

PANGANI;AN, /.0

Co*rt# 4a< not e5tr"cate !art"e# ro4 t-e

nece##ar< con#e=*ence# o t-e"r act#. T-at t-eter4# o a contract t*rn o*t to be "nanc"a))>.>>"n t-e !artner#-"! or a no4"na) a4o*nt o P1.>>.

T-e t-eor< o t-e !et"t"oner, Co44"##"oner oInterna) Re$en*e, "# t-at t-e 4arr"a2e o S*terand S!"r"2 and t-e"r #*b#e=*ent ac=*"#"t"on ot-e "ntere#t# o re4a"n"n2 !artner Car)#on "n t-e!artner#-"! d"##o)$ed t-e )"4"ted !artner#-"!,and " t-e< d"d not, t-e "ct"on o *r"d"ca)!er#ona)"t< o t-e !artner#-"! #-o*)d bed"#re2arded or "nco4e ta5 !*r!o#e# beca*#e t-e#!o*#e# -a$e e5c)*#"$e o+ner#-"! and contro) ot-e b*#"ne##B con#e=*ent)< t-e "nco4e ta5 ret*rn

o re#!ondent S*ter or t-e


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4a"nta"n#, a# t-e Co*rt o Ta5 A!!ea)# -e)d, t-at-"# 4arr"a2e +"t- )"4"ted !artner S!"r"2 andt-e"r ac=*"#"t"on o Car)#onH# "ntere#t# "n t-e!artner#-"! "n 19@8 "# not a 2ro*nd ord"##o)*t"on o t-e !artner#-"!, e"t-er "n t-eCode o Co44erce or "n t-e Ne+ C"$") Code, andt-at #"nce "t# *r"d"ca) !er#ona)"t< -ad not beenaected and #"nce, a# a )"4"ted !artner#-"!, a#contra d"#t"n2*"#-ed ro4 a d*)< re2"#tered2enera) !artner#-"!, "t "# ta5ab)e on "t# "nco4e#"4")ar)< +"t- cor!orat"on#, S*ter +a# not bo*nd

to "nc)*de "n -"# "nd"$"d*a) ret*rn t-e "nco4e ot-e )"4"ted !artner#-"!.

Fe "nd t-e Co44"##"onerH# a!!ea) *n4er"tor"o*#.

T-e t-e#"# t-at t-e )"4"ted !artner#-"!, F"))"a4/. S*ter Morco"n Co., Ltd., -a# been d"##o)$edb< o!erat"on o )a+ beca*#e o t-e 4arr"a2e ot-e on)< 2enera) !artner, F"))"a4 /. S*ter to t-eor"2"na))< )"4"ted !artner, /*)"a S!"r"2 one >>.>> b< F"))"a4 S*ter andP18,>>>.>> b< /*)"a S!"r"2 and ne"t-er one ot-e4 +a# an "nd*#tr"a) !artner. It o))o+# t-at

F"))"a4 /. S*ter Morco"n Co., Ltd. +a# not a!artner#-"! t-at #!o*#e# +ere orb"dden to enterb< Art"c)e 177 o t-e C"$") Code o 1889.

T-e or4er C-"e /*#t"ce o t-e S!an"#- S*!re4eCo*rt, . /o#e Ca#an, "n -"# erec-o C"$"), 7t-Ed"t"on, 196, 'o)*4e @, !a2e @, ootnote 1,#a

d"#re2ard o a card"na) tenet o o*r !artner#-"!)a+#, and can not be e5tended b< 4ere "4!)"cat"onto )"4"ted !artner#-"!#.

T-e r*)"n2# c"ted b< t-e !et"t"oner Co))ector oInterna) Re$en*e $#. Un"$er#"t< o t-e '"#a


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ca#e, to do #o +o*)d e5e4!t t-e )"4"ted!artner#-"! ro4 "nco4e ta5at"on b*t +o*)d t-ro+t-e ta5 b*rden *!on t-e !artner##!o*#e# "n t-e"r"nd"$"d*a) ca!ac"t"e#. T-e cor!orat"on#, "n t-eca#e# c"ted, 4ere)< #er$ed a# b*#"ne## cond*"t#or a)ter e2o# o t-e #toc-o)der#, a actor t-at*#t""ed a d"#re2ard o t-e"r cor!orate!er#ona)"t"e# or ta5 !*r!o#e#. T-"# "# not tr*e"n t-e !re#ent ca#e. %ere, t-e )"4"ted!artner#-"! "# not a 4ere b*#"ne## cond*"t o t-e!artner#!o*#e#B "t +a# or2an"?ed or )e2"t"4ate

b*#"ne## !*r!o#e#B "t cond*cted "t# o+n dea)"n2#+"t- "t# c*#to4er# !r"or to a!!e))eeH# 4arr"a2e,and -ad been ")"n2 "t# o+n "nco4e ta5 ret*rn# a##*c- "nde!endent ent"tP-"). 779, and Peo!)eH# ;an $#. Re2"#ter oeed# o Man")a, > P-"). 17, t-e r*"t# o t-e+"eH# !ara!-erna beco4e con*2a) on)< +-en no)on2er needed to dera< t-e e5!en#e# or t-e

ad4"n"#trat"on and !re#er$at"on o t-e!ara!-erna) ca!"ta) o t-e +"e. T-en a2a"n, t-ea!!e))antH# ar2*4ent erroneo*#)< con"ne# "t#e)to t-e =*e#t"on o t-e )e2a) !er#ona)"t< o t-e)"4"ted !artner#-"!, +-"c- "# not e##ent"a) tot-e "nco4e ta5ab")"t< o t-e !artner#-"! #"ncet-e )a+ ta5e# t-e "nco4e o e$en o"nt acco*nt#t-at -a$e no !er#ona)"t< o t-e"r o+n. 1A!!e))ant "#, )"e+"#e, 4"#taen "n t-at "ta##*4e# t-at t-e con*2a) !artner#-"! o 2a"n# "#a ta5ab)e *n"t, +-"c- "t "# not. F-at "# ta5ab)e"# t-e "nco4e o bot- #!o*#e# Sect"on @ Qd"n t-e"r "nd"$"d*a) ca!ac"t"e#. T-o*2- t-e a4o*nto "nco4e "nco4e o t-e con*2a) !artner#-"!

$"#a$"# t-e o"nt "nco4e o -*#band and +"e:4a< be t-e #a4e or a 2"$en ta5ab)e


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>17: +ere be"n2 $oted c*4*)at"$e)< "n a$or oL*c"ano E. Sa)a?ar. T-e C-a"r4an, ;a)d+"n o*n2,ne$ert-e)e## "n#tr*cted t-e Secretar< to ca#t a))$ote# e=*a))< "n a$or o t-e t-ree ASI no4"nee#,na4e)>@: and b< L*c"ano E. Sa)a?ardoceted a# ACG.R. SP No. >17:. T-e !et"t"on#+ere con#o)"dated and t-e a!!e))ate co*rt "n "t#

dec"#"on ordered t-e re4and o t-e ca#e to t-eSec*r"t"e# and E5c-an2e Co44"##"on +"t- t-ed"rect"$e t-at a ne+ #toc-o)der#H 4eet"n2 oSan"+are# be ordered con$oed a# #oon a#!o##"b)e, *nder t-e #*!er$"#"on o t-eCo44"##"on.

U!on a 4ot"on or recon#"derat"on ")ed b< t-ea!!e))ee# La2da4eo Gro*!: t-e a!!e))ate co*rtCo*rt o A!!ea)#: rendered t-e =*e#t"oneda4ended dec"#"on. Pet"t"oner# Fo)2an2 A*rbac-,/o-n Gr""n, a$"d P. F-"tt"n2-a4 and C-ar)e#C-a4#a< "n G.R. No. 787 a##"2n t-e o))o+"n2error#0

I. T%E COURT O& APPEALS, IN E&&ECT, UP%EL T%EALLEGE ELECTION O& PRI'ATE RESPONENTS ASMEM;ERS O& T%E ;OAR O& IRECTORS O& SANIFARESF%EN IN &ACT T%ERE FAS NO ELECTION AT ALL.

II. T%E COURT O& APPEALS PRO%I;ITS T%ESTOCD%OLERS &ROM E(ERCISING T%EIR &ULL 'OTINGRIG%TS REPRESENTE ; T%E NUM;ER O& S%ARES INSANIFARES, T%US EPRI'ING PETITIONERS AN T%ECORPORATION T%E REPRESENT O& T%EIR PROPERTRIG%TS FIT%OUT UE PROCESS O& LAF.

III. T%E COURT O& APPEALS IMPOSES CONITIONS ANREAS PRO'ISIONS INTO T%E AGREEMENT O& T%EPARTIES F%IC% FERE NOT T%ERE, F%IC% ACTION IT

CANNOT LEGALL O. !. 17, Ro))o787:

Pet"t"oner L*c"ano E. Sa)a?ar "n G.R. No#. 7977 a##a")# t-e a4ended dec"#"on on t-e o))o+"n22ro*nd#0

11.1.

T-atA4endedec"#"on+o*)d#anct"ont-eCAH#d"#re2ardo b"nd"n2 contract*a) a2ree4ent# entered "nto b A!!."$. @>,196 N S 3B P P 9 33 C./. !. 871:

In t-e "n#tant ca#e#, o*r e5a4"nat"on o"4!ortant !ro$"#"on# o t-e A2ree4ent a# +e)) a#t-e te#t"4on"a) e$"dence !re#ented b< t-eLa2da4eo and o*n2 Gro*! #-o+# t-at t-e !art"e#a2reed to e#tab)"#- a o"nt $ent*re and not acor!orat"on. T-e -"#tor< o t-e or2an"?at"on oSan"+are# and t-e *n*#*a) arran2e4ent# +-"c-


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"t# no4"nee# and )a+, 9>, 69 N.F. 71B ;eard#)e< $. ;eard#)e


40/47

t-e Cor!orat"on Code. T-"# Co*rt #-o*)d not be!re!ared to -o)d t-at an< a2ree4ent +-"c-c*rta")# "n an< +a< c*4*)at"$e $ot"n2 #-o*)d be#tr*c do+n, e$en " #*c- a2ree4ent -a# beenree)< entered "nto b< e5!er"enced b*#"ne##4enand do not !re*d"ce t-o#e +-o are not !art"e#t-ereto. It 4a< +e)) be t-at "t +o*)d be 4oreco2ent to -o)d, a# t-e Sec*r"t"e# and E5c-an2eCo44"##"on -a# -e)d "n t-e dec"#"on a!!ea)edro4, t-at c*4*)at"$e $ot"n2 r"2-t# 4a< be$o)*ntar")< +a"$ed b< #toc-o)der# +-o enter "nto

#!ec"a) re)at"on#-"!# +"t- eac- ot-er to !*r#*eand "4!)e4ent #!ec""c !*r!o#e#, a# "n o"nt$ent*re re)at"on#-"!# bet+een ore"2n and )oca)#toc-o)der#, #o )on2 a# #*c- a2ree4ent# do notad$er#e)< aect t-"rd !art"e#.

In an< e$ent, "t "# be)"e$ed t-at +e are not -ereca))ed *!on to 4ae a 2enera) r*)e on t-"#=*e#t"on. Rat-er, a)) t-at need# to be done "# to2"$e )"e and eect to t-e !art"c*)arcontract*a) r"2-t# and ob)"2at"on# +-"c- t-e!art"e# -a$e a##*4ed or t-e4#e)$e#.

On t-e one -and, t-e c)ear)< e#tab)"#-ed 4"nor"t

T-e ASI Gro*! and !et"t"oner Sa)a?ar, no+re"terate t-e"r t-eor< t-at t-e ASI Gro*! -a# t-er"2-t to $ote t-e"r add"t"ona) e=*"t< !*r#*ant to

Sect"on 6@ o t-e Cor!orat"on Code +-"c- 2"$e#t-e #toc-o)der# o a cor!orat"on t-e r"2-t toc*4*)ate t-e"r $ote# "n e)ect"n2 d"rector#.Pet"t"oner Sa)a?ar add# t-at t-"# r"2-t "2ranted to t-e ASI Gro*! +o*)d not nece##ar"). T-eco4!)a"nt,3 doceted a# C"$") Ca#e No. 1983R "n

t-e Re2"ona) Tr"a) Co*rt o ;a2*"o C"t< +a# oracco*nt"n2, )"=*"dat"on and +"nd"n2 *! o t-ea))e2ed !artner#-"! or4ed ater For)d Far IIbet+een Tan En2 Dee and Tan En2 La


43/47

a)#""ed doc*4ent# "n a *d"c"a) !roceed"n2.Pet"t"oner# co4!)a"ned t-at E5-"b"t# @ to @Uoered b< t-e deendant# beore t-e tr"a) co*rt,con#"#t"n2 o !a>>.>> AN AS SUC% T%EE(ECUTION O& A PU;LIC INSTRUMENT CREATING APARTNERS%IP S%OUL %A'E ;EEN MAE AN NO SUC%PU;LIC INSTRUMENT ESTA;LIS%E ; T%E APPELLEESPAGE 17, ECISION:.

A# a !re4"#e, +e re"terate t-e otre!eated r*)et-at "nd"n2# o act# o t-e Co*rt o A!!ea)#+")) not be d"#t*rbed on a!!ea) " #*c- are#*!!orted b< t-e e$"dence.1> O*r *r"#d"ct"on, "t4*#t be e4!-a#"?ed, doe# not "nc)*de re$"e+ oact*a) "##*e#. T-*#0

&")"n2 o !et"t"on +"t- S*!re4e Co*rt. A !art>.>>, "n add"t"on to t-e acc*4*)at"on orea) !ro!ert"e# and to t-e act t-at "t "# no+ aco4!o*nd. T-e e5ec*t"on o a !*b)"c "n#tr*4ent,on t-e ot-er -and, +a# ne$er e#tab)"#-ed b< t-ea!!e))ee#.

And t-en "n 1981, t-e b*#"ne## +a# "ncor!oratedand t-e "ncor!orator# +ere on)< La< and t-e4e4ber# o -"# a4")


45/47

ca!ac"t< o t-e !art"e# to e5ec*te t-e contractB3: 4one< !ro!ert< or "nd*#tr< contr"b*t"onB @:co44*n"t< o *nd# and "ntere#t, 4ent"on"n2e=*a)"t< o t-e !artner# or one -a$"n2 a!ro!ort"onate #-are "n t-e bene"t#B and :"ntent"on to d"$"de t-e !ro"t#, be"n2 t-e tr*ete#t o t-e !artner#-"!. T-e "ntent"on to o"n "nt-e b*#"ne## $ent*re or t-e !*r!o#e o obta"n"n2!ro"t# t-ereater to be d"$"ded, 4*#t bee#tab)"#-ed. Fe cannot #ee t-e#e e)e4ent# ro4t-e te#t"4on"a) e$"dence o t-e a!!e))ee#.

A# can be #een, t-e a!!e))ate co*rt d"#!*ted andd"ered ro4 t-e tr"a) co*rt +-"c- -ad ad*d2edt-at TAN ENG DEE and TAN ENG LA -ad a))e2ed):. T-"# ob#er$at"on "# not ent"re). ;*t


46/47

a)) t-at "# "n t-e !a#t. T-e net eect, -o+e$er,"# t-at +e are a#ed to deter4"ne +-et-er a!artner#-"! e5"#ted ba#ed !*re)< onc"rc*4#tant"a) e$"dence. A re$"e+ o t-e record!er#*ade# *# t-at t-e Co*rt o A!!ea)# correct)

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