PASCUAL & DRAGON VS CIR AND CTA
GRN 78133 October 18, 1988
Petitioners bought two parcels of land and another 3 parcels the following year. The 2 parcels were sold in 1968 while the other 3 were sold in 1970. Realizing profits from the sale, petitioners filed capital gains tax. However, they were assessed with deficiency tax for corporate income taxes.
Whether or not petitioners formed an unregistered partnership thereby assessed with corporate income tax.
By the contract of partnership, two or more persons bind themselves to contribute money, industry or property to a common fund with the intention of dividing profits among themselves. There is no evidence though, that petitioners entered into an agreement to contribute MPI to a common fund and that they intend to divide profits among themselves. The petitioners purchased parcels of land and became co-owners thereof. Their transactions of selling the lots were isolated cases. The character of habituality peculiar to the business transactions for the purpose of gain was not present.
The sharing of returns foes not in itself establish a partnership whether or not the persons sharing therein have a joint or common right or interest in the property. There must be a clear intent to form partnership, the existence of a juridical personality different from the individual partners, and the freedom of each party to transfer or assign the whole property.
SARDANE VS ACOJEDO
GRN L-47045 November 22, 1988
Sardane executed promissory notes in the amount of PhP5, 217.25. Because of failure to pay, Acojedo brought an action for collection of sum of money. Sardane alleged that a partnership existed. MTC granted the petition but RTC reversed upholding reason that there existed partnership between the 2 which could then vary the meaning of the promissory notes. RTC concluded that PN involved were merely receipts for the contributions to said partnership and upheld the claim that there was ambiguity in the PN hence, parol evidence was allowable to contradict the terms of the represented loan contract.
Whether or not partnership existed when petitioner received profits.
Even if evidence other than PN may be admitted to alter the meaning conveyed thereby, still the evidence is insufficient to prove that partnership existed between the private parties. The fact that he had received 50% of the net profits does not conclusively establish that he was a partner of Acojeda. Article 1769 NCC explicitly provides that the receipt of a person of a share of the profits of the 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.