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Mendiola Vs Court of Appeals (497 SCRA 346)
Mendiola Vs Court of Appeals (497 SCRA 346)
Petitioner wrote the VP for Asia of Pacfor seeking confirmation of his 50% equity of Pacfor Phils.
Private respondent replied that petitioner is not a part-owner of Pacfor Phils because he is
merely Pacfor-USA’s representative office and not an entity separate and distinct from
Pacfor-USA. Petitioner claimed that he was all along made to believe that he was in a joint
venture with Pacfor-USA as ATM Marketing Corp.
Issue: Whether there is partnership or co-ownership existing between petitioner Mendiola and
private respondent Pacfor.
In a partnership, the members become co-owners of what is contributed to the firm capital and
of all property that may be acquired thereby and through the efforts of the members. The
property or stock of the partnership forms a community of goods, a common fund, in which each
party has a proprietary interest. In fact, the New Civil Code regards a partner as a co-owner of
specific partnership property. Each partner possesses a joint interest in the whole of
partnership property. If the relation does not have this feature, it is not one of
partnership. This essential element, the community of interest, or co-ownership of, or joint
interest in partnership property is absent in the relations between petitioner and private
respondent Pacfor. Petitioner is not a part-owner of Pacfor Phils. William Gleason, private
respondent Pacfor’s President established this fact when he said that Pacfor Phils. is simply a
“theoretical company” for the purpose of dividing the income 50-50. He stressed that petitioner
knew of this arrangement from the very start, having been the one to propose to private
respondent Pacfor the setting up of a representative office, and “not a branch office” in the
Philippines to save on taxes. Thus, the parties in this case, merely shared profits. This alone
does not make a partnership.