Monday, April 20, 2015

Sunga – Chan v. Chua

Facts:

On June 22, 1992, respondent Lamberto T. Chua filed a complaint against petitioners, Lilibeth Sunga Sunga Chan and Cecilia Sunga, daughter and wife, respectively of the deceased Jacinto L. Sunga, for winding up of Partnership Affairs, accounting, appraisal and recovery of Shares and Damages with Writ of Preliminary Attachment with the Regional Trial Court, Branch 11, Zamboanga del Norte.

Respondent alleged that in 1977, he verbally entered into a partnership with Jacinto in the distribution of Shellane Liquefied Petroleum Gas (LPG) in Manila with initial capital contribution of Php100,000.00 each, with the intention that the profits would be equally divided between them. For business convenience, respondent and Jacinto agreed to register the business name of their partnership SHELLITE GAS APPLIANCE CENTER under the name of Jacinto as sole proprietorship.

Petitioners question the correctness of the finding of the Trial Court and the Court of Appeals that a partnership existed in the absence of any written document to show partnership between respondent and Jacinto from 1977 until Jacinto’s death. 

Issue:

Whether or not respondent Lamberto Chua and Jacinto L. Sunga has entered into a partnership?

Held:


Yes. The court ruled that 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. Also, Article 1772 of the Civil Code requires that partnership with a capital of Php3,000.00 or more must register with the Securities and Exchange Commission, however this registration requirement is not mandatory. Article 1768 of the Civil Code explicitly provides that the partnership retains its juridical personality even if it fails register. The failure to register the contract of partnership does not invalidate the same as among the partners, so long as the contract has the essential requisites, because the main purpose of registration is to give notice to third parties, and it can be assumed that the members themselves knew of the contents of their contract.

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