DACURO, NILO L.

BSA 301

FEDERICO JARANTILLA, JR., Petitioner,

vs.

ANTONIETA JARANTILLA, BUENAVENTURA REMOTIGUE, substituted by CYNTHIA REMOTIGUE, DOROTEO

G.R. No. 154486, December 1, 2010

FACTS:

The spouses Andres Jarantilla and Felisa Jaleco were survived by eight children: Federico, Delfin,
Benjamin, Conchita, Rosita, Pacita, Rafael and Antonieta. Petitioner Federico Jarantilla, Jr. is the
grandchild of the late Jarantilla spouses by their son Federico Jarantilla, Sr. and his wife Leda Jamili.
Petitioner also has two other brothers: Doroteo and Tomas Jarantilla.

In 1948, the spouses Rosita Jarantilla and Vivencio Deocampo entered into an agreement with the
spouses Buenaventura Remotigue and Conchita Jarantilla to provide mutual assistance to each other by
way of financial support to any commercial and agricultural activity on a joint business arrangement.
This business relationship proved to be successful as they were able to establish a manufacturing and
trading business, acquire real properties, and construct buildings, among other things. This partnership
ended in 1973 when the parties, in an "Agreement," voluntarily agreed to completely dissolve their
"joint business relationship/arrangement."

On April 29, 1957, the spouses Buenaventura and Conchita Remotigue executed a document wherein
they acknowledged that while registered only in Buenaventura Remotigue’s name, they were not the
only owners of the capital of the businesses Manila Athletic Supply (712 Raon Street, Manila),
Remotigue Trading (Calle Real, Iloilo City) and Remotigue Trading (Cotabato City). In this same
"Acknowledgement of Participating Capital," they stated the participating capital of their co-owners as
of the year 1952, with Antonieta Jarantilla’s stated as eight thousand pesos (₱8,000.00) and Federico
Jarantilla, Jr.’s as five thousand pesos (₱5,000.00).

Federico Jarantilla, Jr. petition stems from the amended complaint dated April 22, 1987 filed by
Antonieta Jarantilla against Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr.,
Doroteo Jarantilla and Tomas Jarantilla, for the accounting of the assets and income of the co-
ownership, for its partition and the delivery of her share corresponding to eight percent (8%), and for
damages. thereof. During the course of the trial at the RTC, petitioner Federico Jarantilla, Jr., who was
one of the original defendants, entered into a Compromise Agreement dated March 25, 1992 with
Antonieta Jarantilla wherein he supported Antonieta’s claims and asserted that he too was entitled to
six percent (6%) of the supposed partnership in the same manner as Antonieta was.

December 18, 1992, RTC decided in favor of Antonieta. The RTC found that an unregistered partnership
existed since 1946 which was affirmed in the 1957 document, the "Acknowledgement of Participating
Capital." The RTC used this as its basis for giving Antonieta Jarantilla an 8% share in the three businesses
listed therein and in the other businesses and real properties of the respondents as they had supposedly
acquired these through funds from the partnership.
DACURO, NILO L. BSA 301

Both the petitioner and the respondents appealed this decision to the Court of Appeals. The petitioner
claimed that the RTC "erred in not rendering a complete judgment and ordering the partition of the co-
ownership and giving to [him] six per centum (6%) of the properties."

Petitioner asserts that he was in a partnership with the Remotigue spouses, the Deocampo spouses,
Rosita Jarantilla, Rafael Jarantilla, Antonieta Jarantilla and Quintin Vismanos, as evidenced by the
Acknowledgement of Participating Capital the Remotigue spouses executed in 1957. He contends that
from this partnership, several other corporations and businesses were established and several real
properties were acquired. In this petition, he is essentially asking for his 6% share in the subject real
properties. He is relying on the Acknowledgement of Participating Capital, on his own testimony, and
Antonieta Jarantilla’s testimony to support this contention.

On July 30, 2002, the Court of Appeals rendered the herein challenged decision setting aside the RTC’s
decision dated December 18, 1992. The Court of Appeals, on the other hand, agreed with the RTC as to
Antonieta’s 8% share in the business enumerated in the Acknowledgement of Participating Capital, but
not as to her share in the other corporations and real properties. The Court of Appeals ruled that
Antonieta’s claim of 8% is based on the "Acknowledgement of Participating Capital," a duly notarized
document which was specific as to the subject of its coverage. Hence, there was no reason to pattern
her share in the other corporations from her share in the partnership’s businesses. The Court of Appeals
also said that her claim in the respondents’ real properties was more "precarious" as these were all
covered by certificates of title which served as the best evidence as to all the matters contained therein.
Since petitioner’s claim was essentially the same as Antonieta’s, the Court of Appeals also ruled that
petitioner be given his 6% share in the same businesses listed in the Acknowledgement of Participating
Capital.

ISSUE:

Whether or not the partnership subject of the Acknowledgement of Participating Capital funded the
subject real properties.

RULING:

The Petition is DENIED and the Decision of the Court of Appeals in CA-G.R. CV No. 40887, dated July 30,
2002 is AFFIRMED.

Since it is the partnership, as a separate and distinct entity, that must refund the shares of the partners,
the amount to be refunded is necessarily limited to its total resources. In other words, it can only pay
out what it has in its coffers, which consists of all its assets. However, before the partners can be paid
their shares, the creditors of the partnership must first be compensated. After all the creditors have
been paid, whatever is left of the partnership assets becomes available for the payment of the partners’
shares
DACURO, NILO L. BSA 301

There is a co-ownership when an undivided thing or right belongs to different persons.34 It is a

Article 1769 of the new Civil Code paragraphs 2 and 3, provides;

(2) Co-ownership or co-possession does not itself establish a partnership, whether such co-owners or co-
possessors do or do not share any profits made by the use of the property;

(3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons
sharing them have a joint or common right or interest in any property from which the returns are
derived;

From the above it appears that the fact that those who agree to form a co- ownership share or do not
share any profits made by the use of the property held in common does not convert their venture into a
partnership. Or the sharing of the gross returns does not of itself establish a partnership whether or not
the persons sharing therein have a joint or common right or interest in the property. This only means
that, aside from the circumstance of profit, the presence of other elements constituting partnership is
necessary, such as the clear intent to form a partnership, the existence of a juridical personality different
from that of the individual partners, and the freedom to transfer or assign any interest in the property
by one with the consent of the others.

It is evident that an isolated transaction whereby two or more persons contribute funds to buy certain
real estate for profit in the absence of other circumstances showing a contrary intention cannot be
considered a partnership.

In order to constitute a partnership inter sese there must be: (a) An intent to form the same; (b)
generally participating in both profits and losses; (c) and such a community of interest, as far as third
persons are concerned as enables each party to make contract, manage the business, and dispose of the
whole property.

Indeed, a Torrens title is generally conclusive evidence of ownership of the land referred to therein, and
a strong presumption exists that a Torrens title was regularly issued and valid. A Torrens title is
incontrovertible against any informacion possessoria, of other title existing prior to the issuance thereof
not annotated on the Torrens title. Moreover, persons dealing with property covered by a Torrens
certificate of title are not required to go beyond what appears on its face.

SEC. 48. Certificate not subject to collateral attack. – A certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.