503 Phil. 93
In his counter-affidavit, Mercado denied the Angeles spouses' allegations. Mercado claimed that there exists an industrial partnership, colloquially known as sosyo industrial, between him and his spouse as industrial partners and the Angeles spouses as the financiers. This industrial partnership had existed since 1991, before the contract of antichresis over the subject land. As the years passed, Mercado used his and his spouse's earnings as part of the capital in the business transactions which he entered into in behalf of the Angeles spouses. It was their practice to enter into business transactions with other people under the name of Mercado because the Angeles spouses did not want to be identified as the financiers.xxx
Na alang-alang sa halagang DALAWANG DAAN AT SAMPUNG LIBONG PISO (P210,000), salaping gastahin, na aking tinanggap sa mag[-]asawa nila G. AT GNG. FELINO MERCADO, mga nasa hustong gulang, Filipino, tumitira at may pahatirang sulat sa Bgy. Maravilla, bayan ng Nagcarlan, lalawigan ng Laguna, ay aking ipinagbili, iniliwat at isinalin sa naulit na halaga, sa nabanggit na mag[-] asawa nila G. AT GNG. FELINO MERCADO[,] sa kanila ay magmamana, kahalili at ibang dapat pagliwatan ng kanilang karapatan, ang lahat na ibubunga ng lahat na puno ng lanzones, hindi kasama ang ibang halaman na napapalooban nito, ng nabanggit na WALONG (8) Lagay na Lupang Cocal-Lanzonal, sa takdang LIMA (5) NA [sic] TAON, magpapasimula sa taong 1993, at magtatapos sa taong 1997, kaya't pagkatapos ng lansonesan sa taong 1997, ang pamomosision at pakikinabang sa lahat na puno ng lanzones sa nabanggit na WALONG (8) Lagay na Lupang Cocal-Lanzonal ay manunumbalik sa akin, sa akin ay magmamana, kahalili at ibang dapat pagliwatan ng aking karapatan na ako ay walang ibabalik na ano pa mang halaga, sa mag[-] asawa nila G. AT GNG. FELINO MERCADO.
Na ako at ang mag[-]asawa nila G. AT GNG. FELINO MERCADO ay nagkasundo na ako ay bibigyan nila ng LIMA (5) na [sic] kaing na lanzones taon-taon sa loob ng LIMA (5) na [sic] taon ng aming kasunduang ito.
Na ako at ang mag[-]asawa nila G. AT GNG. FELINO MERCADO ay nagkasundo na silang mag[-]asawa nila G. AT GNG. FELINO MERCADO ang magpapaalis ng dapo sa puno ng lansones taon-taon [sic] sa loob ng LIMA (5) [sic] taonng [sic] aming kasunduang ito.
The subject of the complaint hinges on a partnership gone sour. The partnership was initially unsaddled [with] problems. Management became the source of misunderstanding including the accounting of profits, which led to further misunderstanding until it was revealed that the contract with the orchard owner was only with the name of the respondent, without the names of the complainants.The Angeles spouses filed a motion for reconsideration, which the Provincial Prosecution Office denied in a resolution dated 4 August 1997.
The accusation of "estafa" here lacks enough credible evidentiary support to sustain a prima facie finding.
Premises considered, it is respectfully recommended that the complaint for estafa be dismissed.
Reviewing the records of the case, we are of the opinion that the indictment of [Mercado] for the crime of estafa cannot be sustained. [The Angeles spouses] failed to show sufficient proof that [Mercado] deliberately deceived them in the "sanglaang perde" transaction. The document alone, which was in the name of [Mercado and his spouse], failed to convince us that there was deceit or false representation on the part of [Mercado] that induced the [Angeles spouses] to part with their money. [Mercado] satisfactorily explained that the [Angeles spouses] do not want to be revealed as the financiers. Indeed, it is difficult to believe that the [Angeles spouses] would readily part with their money without holding on to some document to evidence the receipt of money, or at least to inspect the document involved in the said transaction. Under the circumstances, we are inclined to believe that [the Angeles spouses] knew from the very start that the questioned document was not really in their names.Hence, this petition.
In addition, we are convinced that a partnership truly existed between the [Angeles spouses] and [Mercado]. The formation of a partnership was clear from the fact that they contributed money to a common fund and divided the profits among themselves. Records would show that [Mercado] was able to make deposits for the account of the [Angeles spouses]. These deposits represented their share in the profits of their business venture. Although the [Angeles spouses] deny the existence of a partnership, they, however, never disputed that the deposits made by [Mercado] were indeed for their account.
The transcript of notes on the dialogue between the [Angeles spouses] and [Mercado] during the hearing of their barangay conciliation case reveals that the [Angeles spouses] acknowledged their joint business ventures with [Mercado] although they assailed the manner by which [Mercado] conducted the business and handled and distributed the funds. The veracity of this transcript was not raised in issued [sic] by [the Angeles spouses]. Although the legal formalities for the formation of a partnership were not adhered to, the partnership relationship of the [Angeles spouses] and [Mercado] is evident in this case. Consequently, there is no estafa where money is delivered by a partner to his co-partner on the latter's representation that the amount shall be applied to the business of their partnership. In case of misapplication or conversion of the money received, the co-partner's liability is civil in nature (People v. Clarin, 7 Phil. 504)
WHEREFORE, the appeal is hereby DISMISSED.
- Whether the Secretary of Justice committed grave abuse of discretion amounting to lack of jurisdiction in dismissing the appeal of the Angeles spouses;
- Whether a partnership existed between the Angeles spouses and Mercado even without any documentary proof to sustain its existence;
- Assuming that there was a partnership, whether there was misappropriation by Mercado of the proceeds of the lanzones after the Angeles spouses demanded an accounting from him of the income at the office of the barangay authorities on 7 September 1996, and Mercado failed to do so and also failed to deliver the proceeds to the Angeles spouses;
- Whether the Secretary of Justice should order the filing of the information for estafa against Mercado.
Art. 1771. A partnership may be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary.The Angeles spouses' position that there is no partnership because of the lack of a public instrument indicating the same and a lack of registration with the Securities and Exchange Commission ("SEC") holds no water. First, the Angeles spouses contributed money to the partnership and not immovable property. Second, mere failure to register the contract of partnership with the SEC does not invalidate a contract that has the essential requisites of a partnership. The purpose of registration of the contract of partnership is to give notice to third parties. Failure to register the contract of partnership does not affect the liability of the partnership and of the partners to third persons. Neither does such failure to register affect the partnership's juridical personality. A partnership may exist even if the partners do not use the words "partner" or "partnership."
Art. 1772. Every contract of partnership having a capital of three thousand pesos or more, in money or property, shall appear in a public instrument, which must be recorded in the Office of the Securities and Exchange Commission.
Failure to comply with the requirements of the preceding paragraph shall not affect the liability of the partnership and the members thereof to third persons.
Art. 1773. A contract of partnership is void, whenever immovable property is contributed thereto, if an inventory of said property is not made, signed by the parties, and attached to the public instrument.
xxx [I]t was the practice to have all the contracts of antichresis of their partnership secured in [Mercado's] name as [the Angeles spouses] are apprehensive that, if they come out into the open as financiers of said contracts, they might be kidnapped by the New People's Army or their business deals be questioned by the Bureau of Internal Revenue or worse, their assets and unexplained income be sequestered, as xxx Oscar Angeles was then working with the government.Furthermore, accounting of the proceeds is not a proper subject for the present case.