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Benjamin Yu v. National Labor Relations Commission & JadeMountain ProductsCo. Ltd., Willy Co, Rodora Bendal, LeaBendal, Ciu !ian Jen" and Cen #o$%uG.R. No. 97212 June 30, 1993

%eliciano, J.%acts

Yu – ex-Assistant General Manager of te !ar"le #uarr$ing an%ex&ort "usiness o&erate%"$ a registere% &artnersi& 'alle% Ja%eMountain (ro%u'ts )o. *t%.(artnersi& +as originall$ organie% +it en%als as general&artners an% )in ian Jeng,)en /o-u an% Yu )ang as li!ite%&artners &artnersi& "usiness 'onsiste% of ex&loitinga !ar"le%e&osit in ula'an Yu, as Assistant General Manager, a% a !ontl$ salar$ of 000. Yu,o+eer, a'tuall$ re'eie% onl$ alf of is sti&ulate% salar$, sin'ee a% a''e&te% te &ro!ise of te &artners tat te "alan'e +oul%"e &ai% +en te 4r! sall ae se'ure% a%%itional o&erating fun%sfro! a"roa%. Yu a'tuall$ !anage% te o&erations an% 4nan'es ofte "usiness e a% oerall su&erision of te +or5ers at te!ar"le #uarr$ in ula'an an% too5 'arge of te &re&aration of&a&ers relating to te ex&ortation of te 4r!6s &ro%u'ts.

General &artners en%als sol% an% transferre% teir interests in te&artnersi& to )o an%!!anuel 8a&anta&artnersi& +as 'onstitute% solel$ "$ )o an% 8a&anta it 'ontinue%to use te ol% 4r!na!e of Ja%e Mountain

Yu – %is!isse% "$ te ne+ &artners

'ssues1. :N te

&artnersi& +i' a% ire% Yu as Asst. Gen. Manager a% "ee

n extinguise% an% re&la'e% "$ a ne+ &artnersi& 'o!&ose%of )o an% 8a&anta

2. 2. if in%ee% ane+ &artnersi& a% 'o!e into existen'e,:N Yu 'oul% noneteless assert is rigts un%erise!&lo$!ent 'ontra't +it te ol% &artnersi& as against tene+ &artnersi&

#eld1. Yes. )anges in te !e!"ersi& of te &artnersi& resulte% in te%issolution of te ol% &artnersi& +i' a% ire% Yu an% tee!ergen'e of a ne+ &artnersi& 'o!&ose% of )o an% 8a&anta.

*egal "ases;

1



Art. 1<2<. =e %issolution of a &artnersi& is te 'ange in te relation of te&artners 'ause% "$ an$ &artner 'easing to "e asso'iate% inte 'arr$ing on as%istinguise% fro! te +in%ing u& of te "usiness.

Art. 1<30. >issolution is 'ause%;?1@ +itout iolation of teagree!ent "et+een te &artners?"@ "$ te ex&ress +ill ofan$ &artner, +o !ust a't in goo% fait, +en no %e4nite ter!or&arti'ular un%erta5ing is s&e'i4e%?2@ in 'ontraention of teagree!ent "et+een te &artners, +ere te 'ir'u!stan'es %onot&er!it a %issolution un%er an$ oter &roision of tis arti'le, "$ teex&ress +ill of an$&artner at an$ ti!e

No +in%ing u& of aairs in tis 'ase as 'onte!&late%in Art. 1<29; on %issolution te&artnersi& is not ter!inate%, "ut'ontinues until te +in%ing u& of &artnersi& aairs is'o!&lete%te ne+ &artnersi& si!&l$ too5 oer te "usiness enter&rise o+ne%"$ te ol%&artnersi&, an% 'ontinue% using te ol% na!e of Ja%e Mountain (ro%u'ts )o!&an$*i!ite%, +itout +in%ing u& te "usinessaairs of te ol% &artnersi&, &a$ing o its %e"ts,li#ui%ating an%%istri"uting its net assets, an% ten re-asse!"ling te sai% assets or!ostof te! an% o&ening a ne+ "usiness enter&rise

2. Yes. te ne+ &artnersi& is lia"le for te %e"ts of te ol%&artnersi&

*egal "asis; Art. 1<0 ?see 'o%al@

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 5840 September 17, 1910

THE UNITED STTES, plaintiff-appellee,vs.EUSE!IO C"RIN, defendant-appellant.

Francisco Dominguez, for appellant. Attorney-General Villamor, for appellee.

RE""NO, C.J.#

Pedro Larin delivered to Pedro Taru P!"#, in order that the latter, in co$pan% &ithEusebio Clarin and Carlos de 'u($an, $iht bu% and sell $anoes, and, believin thathe could $a)e so$e $one% in this business, the said Larin $ade an aree$ent &ith the

three $en b% &hich the profits &ere to be divided e*uall% bet&een hi$ and the$.

2



Pedro Taru, Eusebio Clarin, and Carlos de 'u($an did in fact trade in $anoes andobtained P#+ fro$ the business, but did not co$pl% &ith the ter$s of the contract b%deliverin to Larin his half of the profits neither did the% render hi$ an% account of thecapital.

Larin chared the$ &ith the cri$e of estafa, but the provincial fiscal filed an infor$ationonl% aainst Eusebio Clarin in &hich he accused hi$ of appropriatin to hi$self not onl%the P!"# but also the share of the profits that beloned to Larin, a$ountin to P!.+.

Pedro Taru and Carlos de 'u($an appeared in the case as &itnesses and assu$edthat the facts presented concerned the defendant and the$selves toether.

The trial court, that of /irst 0nstance of Pa$pana, sentenced the defendant, EusebioClarin, to si1 $onths2 arresto mayor , to suffer the accessor% penalties, and to return toPedro Larin P!"#, besides P+.+ as his share of the profits, or to subsidiar%i$prison$ent in case of insolvenc%, and to pa% the costs. The defendant appealed, andin decidin his appeal &e arrive at the follo&in conclusions3

4hen t&o or $ore persons bind the$selves to contribute $one%, propert%, or industr% toa co$$on fund, &ith the intention of dividin the profits a$on the$selves, a contract isfor$ed &hich is called partnership. 5Art. !66, Civil Code.7

4hen Larin put the P!"# into the partnership &hich he for$ed &ith Taru, Clarin, and'u($an, he invested his capital in the ris)s or benefits of the business of the purchaseand sale of $anoes, and, even thouh he had reserved the capital and conve%ed onl%the usufruct of his $one%, it &ould not devolve upon of his three partners to return hiscapital to hi$, but upon the partnership of &hich he hi$self for$ed part, or if it &ere to bedone b% one of the three specificall%, it &ould be Taru, &ho, accordin to the evidence,&as the person &ho received the $one% directl% fro$ Larin.

The P!"# havin been received b% the partnership, the business co$$enced and profitsaccrued, the action that lies &ith the partner &ho furnished the capital for the recover% ofhis $one% is not a cri$inal action for estafa, but a civil one arisin fro$ the partnershipcontract for a li*uidation of the partnership and a lev% on its assets if there should be an%.

No. of article of the Penal Code, accordin to &hich those are uilt% of estafa 8&ho,to the pre9udice of another, shall appropriate or $isappl% an% $one%, oods, or an% )indof personal propert% &hich the% $a% have received as a deposit on co$$ission forad$inistration or in an% other character producin the obliation to deliver or return thesa$e,8 5as, for e1a$ple, in commodatum, precarium, and other unilateral contracts &hichre*uire the return of the sa$e thin received7 does not include $one% received for apartnership other&ise the result &ould be that, if the partnership, instead of obtaininprofits, suffered losses, as it could not be held liable civill% for the share of the capitalistpartner &ho reserved the o&nership of the $one% brouht in b% hi$, it &ould have toans&er to the chare of estafa, for &hich it &ould be sufficient to arue that thepartnership had received the $one% under obligation to return it .

4e therefore freel% ac*uit Eusebio Clarin, &ith the costs de oficio. The co$plaintfor estafa is dis$issed &ithout pre9udice to the institution of a civil action.

Torres, Johnson, oreland and Trent, JJ., concur.

Ro$%& '. M%()%*%

+%t&#

3



Malana and Ro9as e1ecuted their Articles of Co-Partnership called Eastcoast :evelop$ent

Enterprises 5E:E7. 0t &as a partnership &ith an indefinite ter$ of e1istence. Malana shall

$anae the business affairs &hile Ro9as shall be the loin superintendant and shall

$anae the loin operation. The% shall share in all profits and loss e*uall%. :ue to

difficulties encountered the% decided to avail of the sources of Paha$aton as industrial

partners. The% aain e1ecuted their Articles of Co-Partnership under E:E. The ter$ is +%ears. After so$eti$e Pa$ahaton sold his interest to Malana and Ro9as includin

e*uip$ent contributed. After &ithdra&al of Pa$ahaton, Malana and Ro9as continued the

partnership. After $onths, Ro9as entered into a $anae$ent contract &ith another loin

enterprise. ;e left and abandoned the partnership. ;e even &ithdre& his e*uip$ent fro$ the

partnership and &as transferred to CM<. ;e never told Malana that he &ill not be able to

co$pl% &ith the pro$ised contributions and he &ill not &or) as loin superintendent.

Malana then told Ro9as that the latter share &ill 9ust be #+= of the net profits. Ro9as too)

funds fro$ the partnership $ore than his contribution. Thus, Malana notified Ro9as that he

dissolved the partnership.

I&&-e# 4hat is the nature of the partnership and leal relationship of Malana and Ro9as after Paha$aton retired fro$ the second partnership

R-)*(#

0t &as not the intention of the partners to dissolve the first partnership, upon the constitution of

the second one, &hich the% un$ista)abl% called >additional aree$ent.? @ther&ise stated

even durin the e1istence of the second partnership, all business transactions &ere carried

out under the dul% reistered articles. No rihts and obliations accrued in the na$e of the

second partnership e1cept in favor of Paha$aton &hich &as full% paid b% the dul% reistered

partnership.


Manila

EN BANC

G.R. No. "/857 +ebr-%r 11, 1915

2RGS %*3 COMPN, plaintiff-appellee,vs.CHN HNG CHIU, ET "., defendants-appellants.

!ohde and "right for appellants.#scaler and $alas for appellee.

MORE"ND, J.#

This is an action brouht to set aside a 9ud$ent of the 9ustice2s court of Manila on theround that the plaintiff here, the defendant in the action in &hich the 9ud$ent &assecured, &as not served &ith su$$ons and that, therefore, the 9ustice2s court ac*uiredno 9urisdiction to render the 9ud$ent &as that the sa$e is null and void. ud$ent &as

entered in favor of plaintiff declarin the 9ud$ent in controvers% void and settin it aside.This appeal is fro$ that 9ud$ent.



0t appears fro$ the record that the plaintiff is a $erchantile association dul% orani(edunder the la&s of the Philippine 0slands and presu$abl% reistered as re*uired b% la&.@n the !th da% of Auust, !!!, an action &as beun b% Chan ;an Chiu aainst theplaintiff in this case to recover a su$ of $one%. The su$$ons and co$plaint &ere placedin the hands of the sheriff, &ho certified that on the !th da% of Auust, !!!, he servedthe sa$e on aras D Co. b% deliverin to and leavin &ith one ose Macapinlac

personall% true copies thereof, he bein the $anain aent of said aras D Co. at theti$e of such service. @n ul% #. !!#, the 9ustice2s court rendered 9ud$ent aainstaras D Co. for the su$ of "#.#. Thereafter e1ecution &as dul% issued and thepropert% of aras D Co. levied on for the pa%$ent thereof. Thereupon aras D Co. paidthe a$ount of the 9ud$ent and costs under protest, &ith notice that it &ould sue torecover the a$ount paid. The e1ecution &as returned satisfied and there the $atterrested until the present action &as brouht.

The contention of plaintiff is, and that contention is supported b% the decision of the courtbelo&, that aras D Co. bein a partnership, it is necessar%, in brinin an actionaainst it, to serve the su$$ons on all of the partners, deliverin to each one of the$personall% a cop% thereof and that the su$$ons in this case havin been served on the

$anain aent of the co$pan% onl%, the service &as of no effect as aainst theco$pan% and the $e$bers thereof and the 9ud$ent entered b% virtue of such a service&as void.

Plaintiff also contends, and this contention is li)e&ise supported b% the court belo&, that,even ad$ittin that service on the $anain aent of the plaintiff is sufficient service, asa $atter of fact no service &as reall% $ade on the $anain aent of the co$pan% but,rather, on an e$plo%ee or sales$an of the co$pan%, &ho had no po&ers of $anae$entor supervision and &ho &as not co$petent to receive service on behalf of the co$pan%&ithin the provisions of section 6 of the Code of Civil Procedure.

4e are of the opinion that neither of these contentions can be sustained. As to the first,

&e $a% sa% that it has been the universal practice in the Philippine 0slands since A$erican occupation, and &as the practice prior to that ti$e, to treat co$panies of theclass to &hich the plaintiff belons as leal or 9uridicial entities and to per$it the$ to sueand be sued in the na$e of the co$pan%, the su$$ons bein served solel% on the$anain aent or other official of the co$pan% specified b% the section of the Code ofCivil Procedure referred to. This ver% action is an illustration of the practice in voue inthe Philippine 0slands. The plaintiff brins this action in the co$pan% na$e and not in thena$e of the $e$bers of the fir$. Actions aainst co$panies of the class to &hichplaintiff belons are brouht, accordin to the uninterrupted practice, aainst suchco$panies in their co$pan% na$es and not aainst the individual partners constitutinthe fir$. 0n the <tates, in &hich the individual $e$bers of the fir$ $ust be separatel%served &ith process, the rule also prevails that the% $ust be parties to the action, either

plaintiffs or defendant, and that the action cannot be brouht in the na$e of or aainstthe co$pan% itself. This follo&s naturall% for the reason that, if it is necessar% to serve thepartners individuall%, the% are entitled to be heard individuall% in the action and the% $ust,therefore, be $ade parties thereto so that the% can be heard. 0t &ould be idle to serveprocess on individual $e$bers of a partnership if the litiation &ere to be conducted inthe na$e of the partnership itself and b% the dul% constituted officials of the partnershipe1clusivel%.

/ro$ &hat has been said it is apparent that the plaintiff in this action is actin contrar% toits o&n contention b% brinin the action in the na$e of the co$pan% be served &ithprocess, then the action should be brouht in the individual na$es of the partners andnot in the na$e of the co$pan% itself.

Article of the Civil Code provides3

C



The follo&in are 9udicial persons3

!. The corporation, associations, and institutions of public interest reconi(ed b%la&.

#. The associations of private interest, be the% civil, co$$ercial, or industrial, to&hich the la& rants proper personalit%, independent of that of each $e$berthereof.

Article provides3 8udicial persons $a% ac*uire and possess propert% of all )inds, as&ell as contract obliations and institute civil or cri$inal actions in accordance &ith thela&s and rules of their establish$ent.8

Article !!6 of the Code of Co$$erce provides in part3 8After a co$$ercial associationhas been established, it shall have leal representation in all its acts and contracts.8

These provisions have been the foundation of the practice follo&ed &ithout interruption

for $an% %ears that association of the class to &hich plaintiff belons have anindependent and separate leal entit% sufficient to per$it the$ to sue and be sued in theco$pan% na$e and to be served &ith process throuh the chief officer or $anainaent thereof or an% other official of the co$pan% specified b% la&.

As to the second contention, &e $a% sa% that the presu$ption is that a 9ud$entrendered b% a 9ustice2s court is a valid and enforceable 9ud$ent &here the recorddiscloses that all of the steps necessar% to confer 9urisdiction on the court have beenta)en. 0n the case before us it affir$ativel% appears that the service of process &as $adeon the person the sheriff certified &as the $anain aent of the defendant co$pan%.The sheriff2s certificate serves as prima facie evidence of the e1istence of the facts statedtherein. The record, therefore, discloses, so far as the fact of service is concerned, that it

&as dul% $ade on the $anain aent of the co$pan% as re*uired b% section 6,pararaph !, of the Code of Civil Procedure. 0n attac)in the 9ude$ent on the roundthat service &as not $ade on the $anain aent of the co$pan%, it is incu$bent on theplaintiff to overco$e the presu$ption arisin fro$ the sheriff2s certificate before the attac)&ill succeed. Endeavorin to overco$e the presu$ption referred to, plaintiff offered as a&itness one To$as @. <eovia, an e$plo%ee of the plaintiff co$pan%. ;e testified that he&as a boo))eeper and that as such he &as &ell ac*uainted &ith the business of theco$pan% and that the person Macapinlac referred to in the sheriff2s certificate as$anain aent of the plaintiff co$pan% &as an aent for the sale of plo&s, of &hich theplaintiff co$pan% &as a $anufacturer and that he had no other relations &ith theco$pan% than that stated. :urin the course of the e1a$ination this *uestion &as put toand ans&er elicited fro$ this &itness3

;o& do %ou )no& that the% &ere not su$$oned, or that the% did not )no& of thiscase brouht before the 9ustice of the peace of the cit% of ManilaF

0 bein the boo))eeper and the eneral attorne%-in-fact to aras D Co., in 0loilo,ouht to )no& &hether the% have been notified or su$$oned, but 0 onl% )ne&about it &hen the sheriff appeared in our office to $a)e the lev%.

This is the onl% &itness &ho testified in the case. 0t does not appear &hen he beca$e theboo))eeper of the co$pan%, or that he &as in such a position that he could )no& or did)no& personall% the acts of the co$pan% and its relations to Macapinlac. ;e does nottestif% of his o&n )no&lede to the essential facts necessar% to controvert the state$entscontained it the sheriff2s certificate of service. ;is testi$on% is rather neative thanpositive, it bein at all ti$es possible, in spite of his evidence, indeed, in strict accordthere&ith, that aras D Co., of &hich the &itness &as neither official nor $anaer, could

D



have appointed a $anain aent for the co$pan% or could have re$oved hi$ &ithoutthe personal )no&lede of the &itness. The &itness had no personal )no&lede of therelation bet&een the co$pan% and Macapinlac. ;e never sa& the contract e1istinbet&een the$. ;e did not hear the aree$ent bet&een the$ nor did he )no& of his o&n)no&lede &hat the relations bet&een the co$pan% and Macapinlac &ere. ;is testi$on%besides bein neative in character has in it $an% of the ele$ents of hearsa% and is not

at all satisfactor%. 0t &ould have been ver% eas% to present one of the $e$bers of theco$pan%, or all of the$, &ho enaed Macapinlac, &ho )no& the relations bet&een hi$and the co$pan%, to testif% as to &hat those relations &ere and to den%, if that &ere thefact, that Macapinlac &as such an aent or official of the co$pan% as is &ithin thepurvie& of section 6 above referred to. The facts stated in the certificate of the sheriff&ill not be considered as overco$e and rebutted e1cept on clear evidence sho&in thecontrar%. The evidence of the boo))eeper, &ho is the onl% &itness for the co$pan%, is notsatisfactor% in an% sense and is *uite insufficient to overco$e the presu$ptionestablished b% the sheriff2s certificate.

0n vie& of these considerations it is not necessar% to consider the *uestion presented b%the pa%$ent b% the plaintiff co$pan% of the 9ud$ent.

The 9ud$ent appealed fro$ is reversed and the co$plaint dis$issed on the $erits,&ithout costs in this instance. <o ordered.


Manila

EN BANC

G.R. No. 116 No'ember , 191

E"OIS GOITI DE " CMR, plaintiff-appellant,vs.OSE CMPOS RUED, defendant-appellee.

#duardo Gutierrez !epide and Feli% $ocias for appellant.$anz, &pisso and 'uzuriaga for appellee.

TRENT, J.:

This is an action b% the &ife aainst her husband for support outside of the con9ualdo$icile. /ro$ a 9ud$ent sustainin the defendant2s de$urrer upon the round that thefacts alleed in the co$plaint do not state a cause of action, follo&ed b% an orderdis$issin the case after the plaintiff declined to a$end, the latter appealed.

0t &as ured in the first instance, and the court so held, that the defendant cannot beco$pelled to support the plaintiff, e1cept in his o&n house, unless it be b% virtue of a 9udicial decree rantin her a divorce or separation fro$ the defendant.

The parties &ere leall% $arried in the cit% of Manila on anuar% ", !!, and

i$$ediatel% thereafter established their residence at !! Calle <an Marcelino, &here

7



the% lived toether for about a $onth, &hen the plaintiff returned to the ho$e of herparents. The pertinent alleations of the co$plaint are as follo&s3

That the defendant, one $onth after he had contracted $arriae &ith the plaintiff,de$anded of her that she perfor$ unchaste and lascivious acts on his enitalorans that the plaintiff spurned the obscene de$ands of the defendant andrefused to perfor$ an% act other than leal and valid cohabitation that thedefendant, since that date had continuall% on other successive dates, $adesi$ilar le&d and indecorous de$ands on his &ife, the plaintiff, &ho al&a%sspurned the$, &hich 9ust refusals of the plaintiff e1asperated the defendant andinduce hi$ to $altreat her b% &ord and deed and inflict in9uries upon her lips, herface and different parts of her bod% and that, as the plaintiff &as unable b% an%$eans to induce the defendant to desist fro$ his repunant desires and ceasefro$ $altreatin her, she &as oblied to leave the con9ual abode and ta)erefue in the ho$e of her parents.

Marriae in this 9urisdiction is a contract entered into in the $anner and &ith thesole$nities established b% 'eneral @rders No. 6, in so far as its civil effects are

concerned re*uirin the consent of the parties. 5'arcia vs. Montaue, !# Phil. Rep., G+,citin article !#6! of Civil Code.7 Hpon the ter$ination of the $arriae cere$on%, acon9ual partnership is for$ed bet&een the parties. 5<% oc Lien vs. Encarnacion, !6Phil. Rep., !".7 To this e1tent a $arriae parta)es of the nature of an ordinar% contract.But it is so$ethin $ore than a $ere contract. 0t is a ne& relation, the rihts, duties, andobliations of &hich rest not upon the aree$ent of the parties but upon the eneral la&&hich defines and prescribes those rihts, duties, and obliations .Marriae is aninstitution, in the $aintenance of &hich in its purit% the public is deepl% interested. 0t is arelation for life and the parties cannot ter$inate it at an% shorter period b% virtue of an%contract the% $a% $a)e .The reciprocal rihts arisin fro$ this relation, so lon as itcontinues, are such as the la& deter$ines fro$ ti$e to ti$e, and none other. 4hen theleal e1istence of the parties is $ered into one b% $arriae, the ne& relation is

reulated and controlled b% the state or overn$ent upon principles of public polic% forthe benefit of societ% as &ell as the parties. And &hen the ob9ect of a $arriae isdefeated b% renderin its continuance intolerable to one of the parties and productive ofno possible ood to the co$$unit%, relief in so$e &a% should be obtainable. 4ith theseprinciples to uide us, &e &ill in*uire into the status of the la& touchin and overninthe *uestion under consideration.

Articles G# to !+" of the Civil Code are not in force in the Philippine 0slands 5Benedictovs. :e la Ra$a, Phil .Rep., G7. Articles GG to " of the La& of Civil Marriae of !"+,in force in the Peninsula, &ere e1tended to the Philippine 0slands b% ro%al decree on April!, ! 5Ebreo vs. <ichon, G Phil. Rep., "+7. Articles GG, G, and G of this la& read3

ART. GG. The spouses are oblied to be faithful to each other and to $utuall%assist each other.

ART. G. The husband $ust live &ith and protect his &ife. 5The second pararaphdeals &ith the $anae$ent of the &ife2s propert%.7

ART. G. The &ife $ust obe% her husband, live &ith hi$, and follo& hi$ &hen hechares his do$icile or residence.

Not&ithstandin the provisions of the foreoin pararaph, the court $a% for 9ustcause relieve her fro$ this dut% &hen the husband re$oves his residence to aforein countr%.

And articles !G and !G of the Civil Code are as follo&s3

<



ART. !G. The follo&in are oblied to support each other reciprocall% to the&hole e1tent specified in the precedin article.

!. The consorts.

1 1 1 1 1 1 1 1 1

ART. 5!G7 G. The person oblied to ive support $a%, at his option, satisf% it,either b% pa%in the pension that $a% be fi1ed or b% receivin and $aintainin inhis o&n ho$e the person havin the riht to the sa$e.

Article !# of the Civil Code ives the instances &hen the obliation to ive support shallcease. The failure of the &ife to live &ith her husband is not one of the$.

The above *uoted provisions of the La& of Civil Marriae and the Civil Code fi1 theduties and obliations of the spouses. The spouses $ust be faithful to, assist, andsupport each other. The husband $ust live &ith and protect his &ife. The &ife $ust obe%

and live &ith her husband and follo& hi$ &hen he chanes his do$icile or residence,e1cept &hen he re$oves to a forein countr%. But the husband &ho is oblied to supporthis &ife $a%, at his option, do so b% pa%in her a fi1ed pension or b% receivin and$aintainin her in his o&n ho$e. Ma% the husband, on account of his conduct to&ard his&ife, lose this option and be co$pelled to pa% the pensionF 0s the rule established b%article !G of the Civil Code absoluteF The supre$e court of <pain in its decision of:ece$ber , !+, held3.

That in accordance &ith the rulin of the supre$e court of <pain in its decisionsdated Ma% !!, !", Nove$ber #, !, and ul% , !+!, the option &hicharticle !G rants the person, oblied to furnish subsistence, bet&een pa%in thepension fi1ed or receivin and )eepin in his o&n house the part% &ho is entitled

to the sa$e, is not so absolute as to prevent cases bein considered &herein,either because this riht &ould be opposed to the e1ercise of a preferential rihtor because of the e1istence of so$e 9ustifiable cause $orall% opposed to there$oval of the part% en9o%in the $aintenance, the riht of selection $ust beunderstood as bein thereb% restricted.

4hereas the onl% *uestion discussed in the case &hich ave rise to this appeal&as &hether there &as an% reason to prevent the e1ercise of the option rantedb% article !G of the Civil Code to the person oblied to furnish subsistence, toreceive and $aintain in his o&n house the one &ho is entitled to receive it andinas$uch as nothin has been alleed or discussed &ith reard to the parentalauthorit% of Pedro Alcantara Calvo, &hich he ha not e1ercised, and it havin beenset forth that the natural father si$pl% clai$s his child for the purpose of thusbetter attendin to her $aintenance, no action havin been ta)en b% hi$ to&ardprovidin the support until, o&in to such nelience, the $other &as oblied tode$and it it is seen that these circu$stances, toether &ith the fact of the$arriae of Pedro Alcantara, and that it &ould be difficult for the $other to$aintain relations &ith her dauhter, all constitute an i$pedi$ent of such anature as to prevent the e1ercise of the option in the present case, &ithoutpre9udice to such decision as $a% be dee$ed proper &ith reard to the other*uestions previousl% cited in respect to &hich no opinion should be e1pressed atthis ti$e.

The above &as *uoted &ith approval in Hnited <tates and :e esus vs. Alvir 5 Phil.Rep., "67, &herein the court held that the rule laid do&n in article !G of the Civil Code8is not absolute.8 but it is insisted that there e1isted a pree1istin or preferential riht ineach of these cases &hich &as opposed to the re$oval of the one entitled to support. 0t

9



is true that in the first the person clai$in the option &as the natural father of the childand had $arried a &o$an other than the child2s $other, and in the second the riht tosupport had alread% been established b% a final 9ud$ent in a cri$inal case.Not&ithstandin these facts the t&o cases clearl% established the proposition that theoption iven b% article !G of the Civil Code $a% not be e1ercised in an% and all cases.

Counsel for the defendant cite, in support of their contention, the decision of the supre$ecourt of <pain, dated Nove$ber , !+. 0n this case :on Berno Co$as, as a result ofcertain business reverses and in order no to pre9udice his &ife, conferred upon herpo&ers to ad$inister and dispose of her propert%. 4hen she left hi$ he ave her all the$uni$ents of title, $ortae credits, notes, P!+,+++ in accounts receivable, and the )e%to the safe in &hich he )ept a lare a$ount of 9e&els, thus deprivin hi$self of all hispossessions and bein reduced in conse*uence to &ant. <ubse*uentl% he instituted thiscivil action aainst his &ife, &ho &as then livin in opulence, for support and therevocation of the po&ers heretofore ranted in reference to the ad$inistration anddisposal of her propert%. 0n her ans&er the &ife clai$ed that the plaintiff 5her husband7&as not leall% in a situation to clai$ support and that the po&ers voluntaril% conferredand accepted b% her &ere bilateral and could not be canceled b% the plaintiff. /ro$ a

9ud$ent in favor of the plaintiff the defendant &ife appealed to the AudenciaTerritorial &herein, after due trial, 9ud$ent &as rendered in her favor dis$issin theaction upon the $erits. The plaintiff appealed to the supre$e court and that hih tribunal,in affir$in the 9ud$ent of the Audencia Territorial , said3

Considerin that article !G, No. !, of the Civil Code, providin that the spousesare $utuall% oblied to provide each other &ith support, cannot but besubordinate to the other provisions of said Code &hich reulates the fa$il%orani(ation and the duties of spouses not leall% separated, a$on &hich dutiesare those of their livin toether and $utuall% helpin each other, as provided inarticle 6 of the afore$entioned code and ta)in this for ranted, the obliationof the spouse &ho has propert% to furnish support to the one &ho has no propert%

and is in need of it for subsistence, is to be understood as li$ited to the case&here, in accordance &ith la&, their separation has been decreed, eitherte$poraril% or finall% and this case, &ith respect to the husband, cannot occuruntil a 9ud$ent of divorce is rendered, since, until then, if he is culpable, he isnot deprived of the $anae$ent of his &ife2s propert% and of the product of theother propert% belonin to the con9ual partnership and

Considerin that, should the doctrine $aintained in the appeal prevail, it &ouldallo& $arried persons to disreard the $arriae bond and separate fro$ eachother of their o&n free &ill, thus establishin, contrar% to the leal provisioncontained in said article 6 of the Civil Code, a leal status entirel% inco$patible&ith the nature and effects of $arriae in disreard of the duties inherent therein

and disturbin the unit% of the fa$il%, in opposition to &hat the la&, in confor$it%&ith ood $orals, has established and.

Considerin that, as the spouses :. Ra$on Benso and :oIa Adela 'alindo arenot leall% separated, it is their dut% to live toether and afford each other helpand support and for this reason, it cannot be held that the for$er has need ofsupport fro$ his &ife so that he $a% live apart fro$ her &ithout the con9ualabode &here it is his place to be, nor of her conferrin po&er upon hi$ to disposeeven of the fruits of her propert% in order there&ith to pa% the $atri$oniale1penses and, conse*uentl%, those of his o&n support &ithout need of oin tohis &ife &herefore the 9ud$ent appealed fro$, den%in the petition of :.Ra$on Benso for support, has not violated the articles of the Civil Code and the

doctrine invo)ed in the assin$ents of error ! and of the appeal.

10



/ro$ a careful readin of the case 9ust cited and *uoted fro$ it appears *uite clearl% thatthe spouses separated voluntaril% in accordance &ith an aree$ent previousl% $ade. Atleast there are stron indications to this effect, for the court sa%s, 8should the doctrine$aintained in the appeal prevail, it &ould allo& $arried persons to disreard the$arriae bond and separate fro$ each other of their o&n free &ill.8 0f this be the truebasis upon &hich the supre$e court of <pain rested its decision, then the doctrine

therein enunciated &ould not be controllin in cases &here one of the spouses &asco$pelled to leave the con9ual abode b% the other or &here the husband voluntaril%abandons such abode and the &ife see)s to force hi$ to furnish support. That this is trueappears fro$ the decision of the sa$e hih tribunal, dated @ctober !6, !+. 0n this casethe &ife brouht an action for support aainst her husband &ho had &illfull% andvoluntaril% abandoned the con9ual abode &ithout an% cause &hatever. The supre$ecourt, reversin the 9ud$ent absolvin the defendant upon the round that no action fordivorce, etc., had been instituted, said3

0n the case at bar, it has been proven that it &as :on Teodoro E1posito &ho leftthe con9ual abode, althouh he clai$s, &ithout ho&ever provin his contention,that the person responsible for this situation &as his &ife, as she turned hi$ out

of the house. /ro$ this state of affairs it results that it is the &ife &ho is part%abandoned, the husband not havin prosecuted an% action to )eep her in hisco$pan% and he therefore finds hi$self, as lon as he consents to the situation,under the ineluctable obliation to support his &ife in fulfill$ent of the natural dut%sanctioned in article 6 of the Code in relation &ith pararaph ! of article !G. 0nnot so holdin, the trial court, on the $ista)en round that for the fulfill$ent of thisdut% the situation or relation of the spouses should be reulated in the $anner itindicates, has $ade the errors of la& assined in the first three rounds alleed,because the nature of the dut% of affordin $utual support is co$patible andenforcible in all situations, so lon as the need% spouse does not create an% illicitsituation of the court above described. la(phil.net

0f &e are in error as to the doctrine enunciated b% the supre$e court of <pain in itsdecision of Nove$ber , !+, and if the court did hold, as contended b% counsel for thedefendant in the case under consideration, that neither spouse can be co$pelled tosupport the other outside of the con9ual abode, unless it be b% virtue of a final 9ud$entrantin the in9ured one a divorce or separation fro$ the other, still such doctrine orholdin &ould not necessaril% control in this 9urisdiction for the reason that thesubstantive la& is not in ever% particular the sa$e here as it is in <pain. As &e havealread% stated, articles G# to !+" of the Civil Code in force in the Peninsula are not inforce in the Philippine 0slands. The la& overnin the duties and obliations of husbandand &ife in this countr% are articles GG to " of the La& of Civil Marriae of !"+ .0n <painthe co$plainin spouse has, under article !+ of the Civil Code, various causes fordivorce, such as adulter% on the part of the &ife in ever% case and on the part of the

husband &hen public scandal or disrace of the &ife results therefro$ personal violenceactuall% inflicted or rave insults3 violence e1ercised b% the husband to&ard the &ife inorder to force her to chane her reliion the proposal of the husband to prostitute his&ife the atte$pts of the husband or &ife to corrupt their sons or to prostitute theirdauhters the connivance in their corruption or prostitution and the conde$nation of aspouse to perpetual chains or hard labor, &hile in this 9urisdiction the onl% round for adivorce is adulter%. 5Benedicto vs. :e la Ra$a, Phil .Rep., G, G.7 This positive andabsolute doctrine &as announced b% this court in the case 9ust cited after an e1haustivee1a$ination of the entire sub9ect. Althouh the case &as appealed to the <upre$e Courtof the Hnited <tates and the 9ud$ent rendered b% this court &as there reversed, thereversal did not affect in an% &a% or &ea)en the doctrine in reference to adulter% beinthe onl% round for a divorce. And since the decision &as pro$ulated b% this court inthat case in :ece$ber, !+, no chane or $odification of the rule has been announced.0t is, therefore, the &ell settled and accepted doctrine in this 9urisdiction.

11



But it is arued that to rant support in an independent suit is e*uivalent to rantindivorce or separation, as it necessitates a deter$ination of the *uestion &hether the &ifehas a ood and sufficient cause for livin separate fro$ her husband and, conse*uentl%,if a court lac)s po&er to decree a divorce, as in the instant case, po&er to rant aseparate $aintenance $ust also be lac)in. The &ea)ness of this aru$ent lies in theassu$ption that the po&er to rant support in a separate action is dependent upon a

po&er to rant a divorce. That the one is not dependent upon the other is apparent fro$the ver% nature of the $arital obliations of the spouses. The $ere act of $arriaecreates an obliation on the part of the husband to support his &ife. This obliation isfounded not so $uch on the e1press or i$plied ter$s of the contract of $arriae as onthe natural and leal dut% of the husband an obliation, the enforce$ent of &hich is ofsuch vital concern to the state itself that the la&s &ill not per$it hi$ to ter$inate it b% hiso&n &ronful acts in drivin his &ife to see) protection in the parental ho$e. A 9ud$entfor separate $aintenance is not due and pa%able either as da$aes or as a penalt% noris it a debt in the strict leal sense of the ter$, but rather a 9ud$ent callin for theperfor$ance of a dut% $ade specific b% the $andate of the soverein. This is done fro$necessit% and &ith a vie& to preserve the public peace and the purit% of the &ife as&here the husband $a)es so base de$ands upon his &ife and indules in the habit of

assaultin her. The pro tanto separation resultin fro$ a decree for separate support isnot an i$peach$ent of that public polic% b% &hich $arriae is rearded as so sacred andinviolable in its nature it is $erel% a stroner polic% overrulin a &ea)er one and e1ceptin so far onl% as such separation is tolerated as a $eans of preservin the public peaceand $orals $a% be considered, it does not in an% respect &hatever i$pair the $arriaecontract or for an% purpose place the &ife in the situation of a feme sole.

The foreoin are the rounds upon &hich our short opinion and order for 9ud$ent,heretofore filed in this case, rest.

Torres, Johnson and )arson, JJ., concur.

C0R <. <HTER

/ACT<3A li$ited partnership na$ed 4illia$ . <uter 2Morcoin2 Co., Ltd &as for$ed+<epte$ber !G" b% 4illia$ . <uter as the eneral partner, and ulia <piriand'ustav Carlson. The% contributed, respectivel%, P#+,+++.++, P!,+++.++ andP#,+++.++. it &as also dul% reistered &ith the <EC. @n !G <uter and <piri ot$arried and ineffect Carlson sold his share to the couple, the sa$e &as alsoreistered &ith the

<EC. The li$ited partnership had been filin its inco$e ta1 returns as acorporation,&ithout ob9ection b% the herein petitioner, Co$$issioner of 0nternalRevenue, until in !&hen the latter, in an assess$ent, consolidated the inco$eof the fir$ and the individualinco$es of the partners-spouses <uter and <piriresultin in a deter$ination of adeficienc% inco$e ta1 aainst respondent <uter inthe a$ount of P#,6".+6 for !Gand PG,6".++ for !.

0<<HE34hether or not the li$ited partnership has been dissolved after the $arriaeof<uter and <piri and bu%in the interest of li$ited partner Carlson.

RHL0N'3No, the li$ited partnership &as notdissolved.>A husband and a &ife $a% not enter into a contract of eneralcopartnership, because under the Civil Code, &hich applies in the absence of e1press provision in the Code of Co$$erce, persons prohibited fro$ $a)indonations to each other are prohibited

12



fro$ enterin into universal partnerships. 5#Echaverri !67 0t follo&s that the $arriae ofpartners necessaril% brins about thedissolution of a pre-e1istin partnership.>4hat the la& prohibits &as &hen the spouses entered into a eneralpartnership. 0nthe case at bar, the partnership &as li$ited


Manila

EN BANC

G.R. No. 15574 September 17, 1919

SMITH, !E"" COMPN "TD.:, petitioner,vs.

O;UIN NTI2IDD, Co))etor o< C-&tom& o< t=e port o< Ceb-, respondent.

!oss and 'a(rence for petitioner. Attorney-General *aredes for respondent.

M"CO"M, J.:

A &rit of mandamus is pra%ed for b% <$ith, Bell D Co. 5Ltd.7, aainst oa*uin Natividad,Collector of Custo$s of the port of Cebu, Philippine 0slands, to co$pel hi$ to issue acertificate of Philippine reistr% to the petitioner for its $otor vessel +ato. The Attorne%-'eneral, actin as counsel for respondent, de$urs to the petition on the eneral roundthat it does not state facts sufficient to constitute a cause of action. 4hile the facts are

thus ad$itted, and &hile, $oreover, the pertinent provisions of la& are clear andunderstandable, and interpretative A$erican 9urisprudence is found in abundance, %et theissue sub$itted is not lihtl% to be resolved. The *uestion, flatl% presented, is, &hether Act. No. #"6! of the Philippine Leislature is valid J or, $ore directl% stated, &hether the'overn$ent of the Philippine 0slands, throuh its Leislature, can den% the reistr% ofvessels in its coast&ise trade to corporations havin alien stoc)holders.

/ACT<.

<$ith, Bell D Co., 5Ltd.7, is a corporation orani(ed and e1istin under the la&s of thePhilippine 0slands. A $a9orit% of its stoc)holders are British sub9ects. 0t is the o&ner of a$otor vessel )no&n as the +ato built for it in the Philippine 0slands in !!6, of $ore than

fifteen tons ross The +ato &as brouht to Cebu in the present %ear for the purpose oftransportin plaintiff2s $erchandise bet&een ports in the 0slands. Application &as $ade atCebu, the ho$e port of the vessel, to the Collector of Custo$s for a certificate ofPhilippine reistr%. The Collector refused to issue the certificate, ivin as his reason thatall the stoc)holders of <$ith, Bell D Co., Ltd., &ere not citi(ens either of the Hnited<tates or of the Philippine 0slands. The instant action is the result.

LA4.

The Act of Conress of April #, !+, repealin the <hippin Act of April +, !+6 butreenactin a portion of section of this La&, and still in force, provides in its section !3

That until Conress shall have authori(ed the reistr% as vessels of the Hnited<tates of vessels o&ned in the Philippine 0slands, the 'overn$ent of the

13



Philippine 0slands is hereb% authori(ed to adopt, fro$ ti$e to ti$e, and enforcereulations overnin the transportation of $erchandise and passenersbet&een ports or places in the Philippine Archipelao. 5 <tat. at L., "+ <ection!#, H. <. Co$p <tat. K!!6 " Pub. La&s, 6G.7

The Act of Conress of Auust #, !!6, co$$onl% )no&n as the ones La&, still inforce, provides in section , 5first pararaph, first sentence7, 6, ", , !+, and !, asfollo&s.

<EC. . That no la& shall be enacted in said 0slands &hich shall deprive an%person of life, libert%, or propert% &ithout due process of la&, or den% to an%person therein the e*ual protection of the la&s. . . .

<EC. 6. That the la&s no& in force in the Philippines shall continue in force andeffect, e1cept as altered, a$ended, or $odified herein, until altered, a$ended, orrepealed b% the leislative authorit% herein provided or b% Act of Conress of theHnited <tates.

<EC. ". That the leislative authorit% herein provided shall have po&er, &hen notinconsistent &ith this Act, b% due enact$ent to a$end, alter $odif%, or repeal an%la&, civil or cri$inal, continued in force b% this Act as it $a% fro$ ti$e to ti$e seefit

This po&er shall specificall% e1tend &ith the li$itation herein provided as to thetariff to all la&s relatin to revenue provided as to the tariff to all la&s relatin torevenue and ta1ation in effect in the Philippines.

<EC. . That eneral leislative po&er, e1cept as other&ise herein provided, ishereb% ranted to the Philippine Leislature, authori(ed b% this Act.

<EC. !+. That &hile this Act provides that the Philippine overn$ent shall havethe authorit% to enact a tariff la& the trade relations bet&een the islands and theHnited <tates shall continue to be overned e1clusivel% b% la&s of the Conressof the Hnited <tates3 *roided , That tariff acts or acts a$endator% to the tariff ofthe Philippine 0slands shall not beco$e la& until the% shall receive the approval of the President of the Hnited <tates, nor shall an% act of the Philippine Leislatureaffectin i$$iration or the currenc% or coinae la&s of the Philippines beco$e ala& until it has been approved b% the President of the Hnited <tates3 *roidedfurther, That the President shall approve or disapprove an% act $entioned in theforeoin proviso &ithin si1 $onths fro$ and after its enact$ent and sub$issionfor his approval, and if not disapproved &ithin such ti$e it shall beco$e a la& thesa$e as if it had been specificall% approved.

<EC. !. That all la&s or parts of la&s applicable to the Philippines not in conflict&ith an% of the provisions of this Act are hereb% continued in force and effect.8 5<tat at L., G6.7

@n /ebruar% #, !!, the Philippine Leislature enacted Act No. #"6!. The first sectionof this la& a$ended section !!"# of the Ad$inistrative Code to read as follo&s3

<EC. !!"#. )ertificate of *hilippine register. J Hpon reistration of a vessel ofdo$estic o&nership, and of $ore than fifteen tons ross, a certificate ofPhilippine reister shall be issued for it. 0f the vessel is of do$estic o&nership

and of fifteen tons ross or less, the ta)in of the certificate of Philippine reistershall be optional &ith the o&ner.

1



8:o$estic o&nership,8 as used in this section, $eans o&nership vested in so$eone or $ore of the follo&in classes of persons3 5a7 Citi(ens or native inhabitantsof the Philippine 0slands 5b7 citi(ens of the Hnited <tates residin in thePhilippine 0slands 5c 7 any corporation or company composed (holly of citizens of the *hilippine slands or of the nited $tates or of both, created under the la&s of the Hnited <tates, or of an% <tate thereof, or of thereof, or the $anain aent or

$aster of the vessel resides in the Philippine 0slands

An% vessel of $ore than fifteen ross tons &hich on /ebruar% eihth, nineteenhundred and eihteen, had a certificate of Philippine reister under e1istin la&,shall li)e&ise be dee$ed a vessel of do$estic o&nership so lon as there shallnot be an% chane in the o&nership thereof nor an% transfer of stoc) of theco$panies or corporations o&nin such vessel to person not included under thelast precedin pararaph.

<ections # and of Act No. #"6! a$ended sections !!"6 and !#+# of the Ad$inistrativeCode to read as follo&s3

<EC. !!"6. nestigation into character of essel. / 0o application for acertificate of *hilippine register shall be approed until the collector of customs issatisfied fro$ an inspection of the vessel that it is enaed or destined to beenaed in leiti$ate trade and that it is of domestic o(nership as sucho(nership is defined in section eleen hundred and seenty-t(o of this )ode.

The collector of custo$s $a% at an% ti$e inspect a vessel or e1a$ine its o&ner,$aster, cre&, or passeners in order to ascertain &hether the vessel is enaedin leiti$ate trade and is entitled to have or retain the certificate of Philippinereister.

<EC. !#+#. Li$itin nu$ber of forein officers and enineers on board vessels.J No Philippine vessel operatin in the coast&ise trade or on the hih seas shallbe per$itted to have on board $ore than one $aster or one $ate and oneenineer &ho are not citi(ens of the Hnited <tates or of the Philippine 0slands,even if the% hold licenses under section one thousand one hundred and ninet%-nine hereof. No other person &ho is not a citi(en of the Hnited <tates or of thePhilippine 0slands shall be an officer or a $e$ber of the cre& of such vessel. An%such vessel &hich fails to co$pl% &ith the ter$s of this section shall be re*uiredto pa% an additional tonnae ta1 of fift% centavos per net ton per $onth durin thecontinuance of said failure.

0<<HE<.

Predicated on these facts and provisions of la&, the issues as above stated recur,na$el%, &hether Act No #"6! of the Philippine Leislature is valid in &hole or in part J&hether the 'overn$ent of the Philippine 0slands, throuh its Leislature, can den% thereistr% of vessel in its coast&ise trade to corporations havin alien stoc)holders .

@P0N0@N.

!. Considered fro$ a positive standpoint, there can e1ist no $easure of doubt as to thepo&er of the Philippine Leislature to enact Act No. #"6!. The Act of Conress of April#, !+, &ith its specific deleation of authorit% to the 'overn$ent of the Philippine0slands to reulate the transportation of $erchandise and passeners bet&een ports orplaces therein, the liberal construction iven to the provisions of the Philippine Bill, the Act of Conress of ul% !, !+#, b% the courts, and the rant b% the Act of Conress of Auust #, !!6, of eneral leislative po&er to the Philippine Leislature, are certainl%

1C



superabundant authorit% for such a la&. 4hile the Act of the local leislature $a% in a&a% be inconsistent &ith the Act of Conress reulatin the coastin trade of theContinental Hnited <tates, %et the eneral rule that onl% such la&s of the Hnited <tateshave force in the Philippines as are e1pressl% e1tended thereto, and the abneation ofpo&er b% Conress in favor of the Philippine 0slands &ould leave no startin point forconvincin aru$ent. As a $atter of fact, counsel for petitioner does not assail leislative

action fro$ this direction 5$ee H. <. s. Bull K!!+, ! Phil., " <innot s. :avenportK! ## ;o&., ##".7

#. 0t is fro$ the neative, prohibitor% standpoint that counsel arues aainst theconstitutionalit% of Act No. #"6!. The first pararaph of the Philippine Bill of Rihts of thePhilippine Bill, repeated aain in the first pararaph of the Philippine Bill of Rihts as setforth in the ones La&, provides 8That no la& shall be enacted in said 0slands &hich shalldeprive an% person of life, libert%, or propert% &ithout due process of la&, or den% to an%person therein the e*ual protection of the la&s.8 Counsel sa%s that Act No. #"6! deniesto <$ith, Bell D Co., Ltd., the e*ual protection of the la&s because it, in effect, prohibitsthe corporation fro$ o&nin vessels, and because classification of corporations based onthe citi(enship of one or $ore of their stoc)holders is capricious, and that Act No. #"6!

deprives the corporation of its properl% &ithout due process of la& because b% thepassae of the la& co$pan% &as auto$aticall% deprived of ever% beneficial attribute ofo&nership in the +ato and left &ith the na)ed title to a boat it could not use .

The uaranties e1tended b% the Conress of the Hnited <tates to the Philippine 0slandshave been used in the sa$e sense as li)e provisions found in the Hnited <tatesConstitution. 4hile the 8due process of la& and e*ual protection of the la&s8 clause ofthe Philippine Bill of Rihts is couched in slihtl% different &ords than the correspondinclause of the /ourteenth A$end$ent to the Hnited <tates Constitution, the first should beinterpreted and iven the sa$e force and effect as the latter. 5epner s. H.<. K!+G,! H. <., !++ <ierra s. Mortia K!+", #+G H. <.,.G"+ H. <. s. Bull K!!+, ! Phil.,".7 The $eanin of the /ourteenth A$end$ent has been announced in classic decisions

of the Hnited <tates <upre$e Court. Even at the e1pense of restatin &hat is so &ell)no&n, these basic principles $ust aain be set do&n in order to serve as the basis ofthis decision.

The uaranties of the /ourteenth A$end$ent and so of the first pararaph of thePhilippine Bill of Rihts, are universal in their application to all person &ithin the territorial 9urisdiction, &ithout reard to an% differences of race, color, or nationalit%. The &ord8person8 includes aliens. 5ic) 4o s. ;op)ins K!6, !! H. <., 6 Trua1 s. RaichK!!, # H. <., .7 Private corporations, li)e&ise, are 8persons8 &ithin the scope ofthe uaranties in so far as their propert% is concerned. 5<anta Clara Count% s. <outhernPac. R. R. Co. K!6, !!.H. <., G Pe$bina Minin Co. s. Penns%lvania K!,.!#H. <., !! Covinton D L. Turnpi)e Road Co. s. <andford K!6, !6G H. <., ".7

Classification &ith the end in vie& of providin diversit% of treat$ent $a% be $adea$on corporations, but $ust be based upon so$e reasonable round and not be a$ere arbitrar% selection 5'ulf, Colorado D <anta /e Rail&a% Co. s. Ellis K!",.!6 H.<., !+.7 E1a$ples of la&s held unconstitutional because of unla&ful discri$inationaainst aliens could be cited. 'enerall%, these decisions relate to statutes &hich hadatte$pted arbitraril% to forbid aliens to enae in ordinar% )inds of business to earn theirlivin. 5<tate s. Monto$er% K!++, G Maine, !#, peddlin J but see.Co$$on&ealth s. ;ana K!+", ! Mass., #6# Te$plar s. Board of E1a$iners ofBarbers K!+#, !! Mich., #G, barbers ic) 4o s. ;op)ins K!6, !! H. <.,.6,discri$ination aainst Chinese Trua1 s. Raich K!!, # H. <., n re ParrottK!+, ! /ed , G! /raser s. McCon&a% D Torle% Co. K!", # /ed , #" uniataLi$estone Co. s. /ale% K!, !" Penn., !, all relatin to the e$plo%$ent of aliens

b% private corporations.7

1D



A literal application of eneral principles to the facts before us &ould, of course, causethe inevitable deduction that Act No. #"6! is unconstitutional b% reason of its denial to acorporation, so$e of &hole $e$bers are foreiners, of the e*ual protection of the la&s.Li)e all beneficient propositions, deeper research discloses provisos. E1a$ples of adenial of rihts to aliens not&ithstandin the provisions of the /ourteenth A$end$entcould be cited. 5Traesser s.'ra% K!+, " Md., #+, licenses to sell spirituous li*uors

denied to persons not citi(ens of the Hnited <tates Co$$on&ealth s. ;ana K!+", !Mass , #6#, e1cludin aliens fro$ the riht to peddle Patsone s.Co$$on&ealth ofPenns%lvania K!!G, ## H. <. , !, prohibitin the )illin of an% &ild bird or ani$al b%an% unnaturali(ed forein-born resident #% parte 'illeti K!!, "+ /la., GG#,discri$inatin in favor of citi(ens &ith reference to the ta)in for private use of theco$$on propert% in fish and o%sters found in the public &aters of the <tate;ei$ s. McCall K!!, # H. <.,.!", and Crane s. Ne& or) K!!, # H. <., !,li$itin e$plo%$ent on public &or)s b%, or for, the <tate or a $unicipalit% to citi(ens ofthe Hnited <tates.7

@ne of the e1ceptions to the eneral rule, $ost persistent and far reachin in influence is,that neither the /ourteenth A$end$ent to the Hnited <tates Constitution, broad and

co$prehensive as it is, nor an% other a$end$ent, 8&as desined to interfere &ith thepo&er of the <tate, so$eti$es ter$ed its Opolice po&er,2 to prescribe reulations topro$ote the health, peace, $orals, education, and ood order of the people, andleislate so as to increase the industries of the <tate, develop its resources and add to its&ealth and prosperit%. /ro$ the ver% necessities of societ%, leislation of a specialcharacter, havin these ob9ects in vie&, $ust often be had in certain districts.85Barbier s. Connoll% K!G, !! H.<., #" Ne& @rleans 'as Co. s. Lousiana Liht Co.K!, !! H.<., 6+.7 This is the sa$e police po&er &hich the Hnited <tates <upre$eCourt sa% 8e1tends to so dealin &ith the conditions &hich e1ist in the state as to brinout of the$ the reatest &elfare in of its people.8 5Bacon s.4al)er K!+", #+G H.<.,!!.7 /or *uite si$ilar reasons, none of the provision of the Philippine @ranic La& couldcould have had the effect of den%in to the 'overn$ent of the Philippine 0slands, actin

throuh its Leislature, the riht to e1ercise that $ost essential, insistent, and illi$itableof po&ers, the soverein police po&er, in the pro$otion of the eneral &elfare and thepublic interest. 5H. <. s. Toribio K!!+, ! Phil., Churchill and Tait s. Raffert% K!!,# Phil., + Rubi s. Provincial Board of Mindoro K!!, Phil., 66+.7 Another notablee1ception per$its of the reulation or distribution of the public do$ain or the co$$onpropert% or resources of the people of the <tate, so that use $a% be li$ited to its citi(ens.5#% parte 'illeti K!!, "+ /la., GG# McCread% s. irinia K!"6, G H. <., !Patsone s. Co$$on&ealth of Penns%lvania K!!G, ##H. <., !.7 <till anothere1ception per$its of the li$itation of e$plo%$ent in the construction of public &or)s b%,or for, the <tate or a $unicipalit% to citi(ens of the Hnited <tates or of the <tate.5At)in s. ansas K!+,!! H. <., #+" ;ei$ s. McCall K!!, # H.<., !"Cranes. Ne& or) K!!, # H. <., !.7 Even as to classification, it is ad$itted that a<tate $a% classif% &ith reference to the evil to be prevented the *uestion is a practicalone, dependent upon e1perience. 5Patsone s.Co$$on&ealth of Penns%lvania K!!G,## H. <., !.7

To 9ustif% that portion of Act no. #"6! &hich per$its corporations or co$panies to obtain acertificate of Philippine reistr% onl% on condition that the% be co$posed &holl% of citi(ensof the Philippine 0slands or of the Hnited <tates or both, as not infrinin Philippine@ranic La&, it $ust be done under so$e one of the e1ceptions here $entioned This$ust be done, $oreover, havin particularl% in $ind &hat is so often of controllin effectin this 9urisdiction J our local e1perience and our peculiar local conditions.

To recall a fe& facts in eoraph%, &ithin the confines of Philippine 9urisdictional li$its are

found $ore than three thousand islands. Literall%, and absolutel%, stea$ship lines are, for an 0nsular territor% thus situated, the arteries of co$$erce. 0f one be severed, the life-blood of the nation is lost. 0f on the other hand these arteries are protected, then the

17



securit% of the countr% and the pro$otion of the eneral &elfare is sustained. Ti$e andaain, &ith such conditions confrontin it, has the e1ecutive branch of the 'overn$ent of the Philippine 0slands, al&a%s later &ith the sanction of the 9udicial branch, ta)en a fir$stand &ith reference to the presence of undesirable foreiners. The 'overn$ent hasthus assu$ed to act for the all-sufficient and pri$itive reason of the benefit andprotection of its o&n citi(ens and of the self-preservation and interit% of its do$inion. 5 n

re Patterson K!+#, ! Phil., /orbes s.Chuoco, Tiaco and Crossfield K!!+, !6 Phil.,G.## H.<., G n re McCulloch :ic) K!!, Phil., G!.7 Boats o&ned b%foreiners, particularl% b% such solid and reputable fir$s as the instant clai$ant, $ihtindeed traverse the &aters of the Philippines for aes &ithout doin an% particular har$. Aain, so$e evil$inded foreiner $iht ver% easil% ta)e advantae of such lavishhospitalit% to chart Philippine &aters, to obtain valuable infor$ation for unfriendl% foreinpo&ers, to stir up insurrection, or to pre9udice /ilipino or A$erican co$$erce. Moreover,under the <panish portion of Philippine la&, the &aters &ithin the do$estic 9urisdictionare dee$ed part of the national do$ain, open to public use. 5Boo) 00, Tit. 0, Ch. 0, CivilCode <panish La& of 4aters of Auust , !66, arts !, #, .7 Co$$on carriers &hich inthe Philippines as in the Hnited <tates and other countries are, as Lord ;ale said,8affected &ith a public interest,8 can onl% be per$itted to use these public &aters as a

privilee and under such conditions as to the representatives of the people $a% see$&ise. 5$ee :e illata s. <tanle% K!!, # Phil., G!.7

0n Patsone s. Co$$on&ealth of Penns%lvania 5K!!, ## H.<., !7, a case hereinbefore $entioned, ustice ;ol$es deliverin the opinion of the Hnited <tates <upre$eCourt said3

This statute $a)es it unla&ful for an% unnaturali(ed forein-born resident to )illan% &ild bird or ani$al e1cept in defense of person or propert%, and Oto that end2$a)es it unla&ful for such forein-born person to o&n or be possessed of ashotun or rifle &ith a penalt% of # and a forfeiture of the un or uns. Theplaintiff in error &as found uilt% and &as sentenced to pa% the above$entioned

fine. The 9ud$ent &as affir$ed on successive appeals. 5#! Pa., G6 " Atl.,#.7 ;e brins the case to this court on the round that the statute is contrar% tothe !Gth A$end$ent and also is in contravention of the treat% bet&een the Hnited<tates and 0tal%, to &hich latter countr% the plaintiff in error belons .

Hnder the !Gth A$end$ent the ob9ection is t&ofold un9ustifiabl% deprivin thealien of propert%, and discri$ination aainst such aliens as a class. But the for$er reall% depends upon the latter, since it hardl% can be disputed that if the la&fulob9ect, the protection of &ild life 5'eer s. Connecticut, !6! H.<., ! G+ L. ed.," !6 <up. Ct. Rep., 6++7, &arrants the discri$ination, the, $eans adopted for$a)in it effective also $iht be adopted. . . .

The discri$ination undoubtedl% presents a $ore difficult *uestion. But &e start&ith reference to the evil to be prevented, and that if the class discri$inatedaainst is or reasonabl% $iht be considered to define those fro$ &ho$ the evil$ainl% is to be feared, it properl% $a% be pic)ed out. A lac) of abstract s%$$etr%does not $atter. The *uestion is a practical one, dependent upon e1perience. . . .

The *uestion therefore narro&s itself to &hether this court can sa% that theleislature of Penns%lvania &as not &arranted in assu$in as its pre$ise for thela& that resident unnaturali(ed aliens &ere the peculiar source of the evil that itdesired to prevent. 5Barrett s. 0ndiana,. ## H.<., #6, # " L. ed., !++, !+# <up. Ct. Rep., 6#.7

@bviousl% the *uestion, so stated, is one of local e1perience, on &hich this courtouht to be ver% slo& to declare that the state leislature &as &ron in its facts

1<



5Ada$s s. Mil&au)ee, ## H.<., "#, " L. ed., "!,."" <up. Ct. Rep.,6!+.7 0f &e $iht trust popular speech in so$e states it &as riht but it is enouhthat this court has no such )no&lede of local conditions as to be able to sa% thatit &as $anifestl% &ron. . . .

ud$ent affir$ed.

4e are inclined to the vie& that &hile <$ith, Bell D Co. Ltd., a corporation havin alienstoc)holders, is entitled to the protection afforded b% the due-process of la& and e*ualprotection of the la&s clause of the Philippine Bill of Rihts, nevertheless, Act No. #"6! of the Philippine Leislature, in den%in to corporations such as <$ith, Bell D. Co. Ltd., theriht to reister vessels in the Philippines coast&ise trade, does not belon to that viciousspecies of class leislation &hich $ust al&a%s be conde$ned, but does fall &ithinauthori(ed e1ceptions, notabl%, &ithin the purvie& of the police po&er, and so does notoffend aainst the constitutional provision.

This opinion $iht &ell be brouht to a close at this point. 0t occurs to us, ho&ever, thatthe leislative histor% of the Hnited <tates and the Philippine 0slands, and, probabl%, theleislative histor% of other countries, if &e &ere to ta)e the ti$e to search it out, $ihtdisclose si$ilar atte$pts at restriction on the riht to enter the coast&ise trade, and $ihtthus furnish valuable aid b% &hich to ascertain and, if possible, effectuate leislativeintention.

. The po&er to reulate co$$erce, e1pressl% deleated to the Conress b% theConstitution, includes the po&er to nationali(e ships built and o&ned in theHnited <tates b% reistries and enroll$ents, and the recordin of the $uni$entsof title of A$erican vessels. The Conress 8$a% encourae or it $a% entirel%prohibit such co$$erce, and it $a% reulate in an% &a% it $a% see fit bet&eenthese t&o e1tre$es.8 5H.<. s.Crai K!6, # /ed., " 'ibbons s. @denK!#G, 4heat., ! The Passener Cases K!G, " ;o&., #.7

Actin &ithin the purvie& of such po&er, the first Conress of the Hnited <tates had notbeen lon convened before it enacted on <epte$ber !, !", 8An Act for Reisterin andClearin essels, Reulatin the Coastin Trade, and for other purposes.8 <ection ! ofthis la& provided that for an% ship or vessel to obtain the benefits of A$erican reistr%, it$ust belon &holl% to a citi(en or citi(ens of the Hnited <tates 8and no other.8 5! <tat. atL., .7 That Act &as shortl% after repealed, but the sa$e idea &as carried into the Acts of Conress of :ece$ber !, !"# and /ebruar% !, !". 5! <tat. at L., #", +.7.<ectionG of the Act of !"# provided that in order to obtain the reistr% of an% vessel, an oathshall be ta)en and subscribed b% the o&ner, or b% one of the o&ners thereof, before theofficer authori(ed to $a)e such reistr%, declarin, 8that there is no sub9ect or citi(en ofan% forein prince or state, directl% or indirectl%, b% &a% of trust, confidence, or other&ise,

interested in such vessel, or in the profits or issues thereof.8 <ection # of the Act of !"even &ent so far as to sa% 8that if an% licensed ship or vessel shall be transferred to an%person &ho is not at the ti$e of such transfer a citi(en of and resident &ithin the Hnited<tates, ... ever% such vessel &ith her tac)le, apparel, and furniture, and the caro foundon board her, shall be forefeited.8 0n case of alienation to a foreiner, Chief usticeMarshall said that all the privilees of an A$erican botto$ &ere ipsofacto forfeited. 5H.<. s. 4illins and /rancis K!+", G Cranch, G.7 Even as late as !",the Attorne%-'eneral of the Hnited <tates &as of the opinion that under the provisions ofthe Act of :ece$ber !, !"#, no vessel in &hich a foreiner is directl% or indirectl%interested can la&full% be reistered as a vessel of the Hnited. <tates. 5!G @p. Att%.-'en.KH.<., G+.7

These la&s continued in force &ithout contest, althouh possibl% the Act of March ,!#, $a% have affected the$, until a$ended b% the Act of Ma% #, !6 5# <tat. at L.,

19



!7 &hich e1tended the privilees of reistr% fro$ vessels &holl% o&ned b% a citi(en orciti(ens of the Hnited <tates to corporations created under the la&s of an% of the statesthereof. The la&, as a$ended, $ade possible the deduction that a vessel belonin to ado$estic corporation &as entitled to reistr% or enroll$ent even thouh so$e stoc) of theco$pan% be o&ned b% aliens. The riht of o&nership of stoc) in a corporation &asthereafter distinct fro$ the riht to hold the propert% b% the corporation

5;u$phre%s s. Mcissoc) K!+, !G+ H.<., +G Queen s. Arnaud K!G6, Q. B.,+6 # @p. Att%.-'en. KH.<.,!.7

@n A$erican occupation of the Philippines, the ne& overn$ent found a substantive la&in operation in the 0slands &ith a civil la& histor% &hich it &isel% continued in force Articlefifteen of the <panish Code of Co$$erce per$itted an% foreiner to enae in Philippinetrade if he had leal capacit% to do so under the la&s of his nation. 4hen the PhilippineCo$$ission ca$e to enact the Custo$s Ad$inistrative Act 5No. 7 in !+#, it returnedto the old A$erican polic% of li$itin the protection and fla of the Hnited <tates tovessels o&ned b% citi(ens of the Hnited <tates or b% native inhabitants of the Philippine0slands 5<ec. !!".7 T&o %ears later, the sa$e bod% reverted to the e1istin Conressionalla& b% per$ittin certification to be issued to a citi(en of the Hnited <tates or to a

corporation or co$pan% created under the la&s of the Hnited <tates or of an% statethereof or of the Philippine 0slands 5Act No. !#, sec. .7 The t&o ad$inistration codesrepeated the sa$e provisions &ith the necessar% a$plification of inclusion of citi(ens ornative inhabitants of the Philippine 0slands 5Ad$. Code of !!6, sec. !G Ad$. Code of !!", sec. !!"#7. And no& Act No. #"6! has returned to the restrictive idea of the oriinalCusto$s Ad$inistrative Act &hich in turn &as $erel% a reflection of the statutor%lanuae of the first A$erican Conress.

Provisions such as those in Act No. #"6!, &hich den% to foreiners the riht to acertificate of Philippine reistr%, are thus found not to be as radical as a first readin&ould $a)e the$ appear.

4ithout an% subterfue, the apparent purpose of the Philippine Leislature is seen to beto enact an anti-alien shippin act. The ulti$ate purpose of the Leislature is toencourae Philippine ship-buildin. This, &ithout doubt, has, li)e&ise, been the intentionof the Hnited <tates Conress in passin naviation or tariff la&s on different occasions.The ob9ect of such a la&, the Hnited <tates <upre$e Court once said, &as to encourae A$erican trade, naviation, and ship-buildin b% ivin A$erican ship-o&ners e1clusiveprivilees. 5@ld :o$inion <tea$ship Co. s.irinia K!+, ! H.<., # ent2sCo$$entaries, ol. , p. !.7

0n the concurrin opinion of ustice ohnson in 'ibbons s. @den 5K!#G, 4heat., !7is found the follo&in3

Licensin acts, in fact, in leislation, are universall% restrainin acts as, fore1a$ple, acts licensin a$in houses, retailers of spirituous li*uors, etc. Theact, in this instance, is distinctl% of that character, and for$s part of an e1tensives%ste$, the ob9ect of &hich is to encourae A$erican shippin, and place the$on an e*ual footin &ith the shippin of other nations. Al$ost ever% co$$ercialnation reserves to its o&n sub9ects a $onopol% of its coastin trade and acountervailin privilee in favor of A$erican shippin is conte$plated, in the&hole leislation of the Hnited <tates on this sub9ect. 0t is not to ive the vesselan A$erican character, that the license is ranted that effect has been correctl%attributed to the act of her enroll$ent. But it is to confer on her A$ericanprivilees, as contradistinuished fro$ forein and to preserve the. 'overn$entfro$ fraud b% foreiners, in surreptitiousl% intrudin the$selves into the A$erican

co$$ercial $arine, as &ell as frauds upon the revenue in the trade coast&ise,that this &hole s%ste$ is pro9ected.

20



The Hnited <tates Conress in assu$in its rave responsibilit% of leislatin &isel% for ane& countr% did so i$bued &ith a spirit of A$ericanis$. :o$estic naviation and trade, itdecreed, could onl% be carried on b% citi(ens of the Hnited <tates. 0f the representativesof the A$erican people acted in this patriotic $anner to advance the national polic%, andif their action &as accepted &ithout protest in the courts, &ho can sa% that the% did notenact such beneficial la&s under the all-pervadin police po&er, &ith the pri$e $otive of

safeuardin the countr% and of pro$otin its prosperit%F Quite si$ilarl%, the PhilippineLeislature $ade up entirel% of /ilipinos, representin the $andate of the /ilipino peopleand the uardian of their rihts, actin under practicall% autono$ous po&ers, and i$bued&ith a stron sense of Philippinis$, has desired for these 0slands safet% fro$ foreininterlopers, the use of the co$$on propert% e1clusivel% b% its citi(ens and the citi(ens ofthe Hnited <tates, and protection for the co$$on ood of the people. 4ho can sa%,therefore, especiall% can a court, that &ith all the facts and circu$stances affectin the/ilipino people before it, the Philippine Leislature has erred in the enact$ent of Act No.#"6!F

<urel%, the $e$bers of the 9udiciar% are not e1pected to live apart fro$ active life, in$onastic seclusion a$idst dust% to$es and ancient records, but, as )een spectators of

passin events and alive to the dictates of the eneral J the national J &elfare, canincline the scales of their decisions in favor of that solution &hich &ill $ost effectivel%pro$ote the public polic%. All the presu$ption is in favor of the constitutionall% of the la&and &ithout ood and stron reasons, courts should not atte$pt to nullif% the action ofthe Leislature. 80n construin a statute enacted b% the Philippine Co$$ission5Leislature7, &e dee$ it our dut% not to ive it a construction &hich &ould be repunantto an Act of Conress, if the lanuae of the statute is fairl% susceptible of anotherconstruction not in conflict &ith the hiher la&.8 5n re 'uariIa K!!, #G. Phil., 6H.<. s. Ten u K!!#, #G Phil., !.7 That is the true construction &hich &ill best carr%leislative intention into effect.

4ith full consciousness of the i$portance of the *uestion, &e nevertheless are clearl% of

the opinion that the li$itation of do$estic o&nership for purposes of obtainin acertificate of Philippine reistr% in the coast&ise trade to citi(ens of the Philippine 0slands,and to citi(ens of the Hnited <tates, does not violate the provisions of pararaph ! ofsection of the Act of Conress of Auust #, !!6 No treat% riht relied upon Act No.#"6! of the Philippine Leislature is held valid and constitutional .

Bache & Co Vs. Ruiz

FACTS:

:n 2 e" 1970, )o!!issioner Eera of Fnternal Reenue, +rote a letter

a%%resse% to J Rui re#uesting te issuan'e of a sear' +arrant against

&etitioners for iolation of e' D?a@ of te NFR), in relation to all oter

&ertinent &roisions tereof, &arti'ularl$ e'ts C3, 72, 73, 20< an% 209,

an% autoriing Reenue xa!iner %e *eon !a5e an% 4le te

a&&li'ation for sear' +arrant +i' +as atta'e% to te letter. =e

next %a$, %e *eon an% is +itnesses +ent to )F Rial to o"tain te

sear' +arrant. At tat ti!e J Rui +as earing a 'ertain 'ase so, "$

!eans of a note, e instru'te% is >e&ut$ )ler5 of )ourt to ta5e te

%e&ositions of >e *eon an% *ogronio. After te session a% a%ourne%, J

Rui +as infor!e% tat te %e&ositions a% alrea%$ "een ta5en. =e

21



stenogra&er rea% to i! er stenogra&i' notes an% tereafter, J Rui

as5e% res&on%ent *ogronio to ta5e te oat an% +arne% i! tat if is

%e&osition +as foun% to "e false an% +itout legal "asis, e 'oul% "e

'arge% for &erur$. J Rui signe% %e *eon6s a&&li'ation for sear'

+arrant an% *ogronio6s %e&osition. =e sear' +as su"se#uentl$'on%u'te%.

'!!() eter or not tere a% "een a ali% sear' +arrant.

#)L* =e ) rule% in faor of a'e on tree groun%s.

1. J Rui faile% to &ersonall$ exa!ine te 'o!&lainant an% is +itness.

(ersonal exa!ination "$ te u%ge of te 'o!&lainant an% is

+itnesses is ne'essar$ to ena"le i! to %eter!ine te existen'e or

non-existen'e of a &ro"a"le 'ause.

2. =e sear' +arrant +as issue% for !ore tan one s&e'i4' oense.

=e sear' +arrant in #uestion +as issue% for at least four %istin't

oenses un%er te =ax )o%e. As rule% in Stonehill Hu' is te

seriousness of te irregularities 'o!!itte% in 'onne'tion +it te

%is&ute% sear' +arrants, tat tis )ourt %ee!e% it 4t to a!en%

e'tion 3 of Rule 122 of te for!er Rules of )ourt tat Ia sear'

+arrant sall not issue "ut u&on &ro"a"le 'ause in 'onne'tion +it one

s&e'i4' oense.6 Not satis4e% +it tis #uali4'ation, te )ourt a%%e%

tereto a &aragra&, %ire'ting tat Ino sear' +arrant sall issue for

!ore tan one s&e'i4' oense.

3. =e sear' +arrant %oes not &arti'ularl$ %es'ri"e te tings to "e

seie%.

=e %o'u!ents, &a&ers an% ee'ts sougt to "e seie% are %es'ri"e%in te ear' arrant

Hnregistere% an% &riate "oo5s of a''ounts ?le%gers, ournals,

'olu!nars, re'ei&ts an% %is"urse!ents "oo5s, 'usto!ers le%gers@

re'ei&ts for &a$!ents re'eie% 'erti4'ates of sto'5s an% se'urities

'ontra'ts, &ro!issor$ notes an% %ee%s of sale telex an% 'o%e%

!essages "usiness 'o!!uni'ations, a''ounting an% "usiness re'or%s

'e'5s an% 'e'5 stu"s re'or%s of "an5 %e&osits an% +it%ra+als an%

re'or%s of foreign re!ittan'es, 'oering te $ears 19DD to 1970.K

22



=e %es'ri&tion %oes not !eet te re#uire!ent in Art FFF, e'. 1, of te

)onstitution, an% of e'. 3, Rule 12D of te Reise% Rules of )ourt, tat

te +arrant soul% &arti'ularl$ %es'ri"e te tings to "e seie%.

A sear' +arrant !a$ "e sai% to &arti'ularl$ %es'ri"e te tings to "eseie% +en te %es'ri&tion terein is as s&e'i4' as te 'ir'u!stan'es

+ill or%inaril$ allo+ or +en te %es'ri&tion ex&resses a 'on'lusion of

fa't not of la+ "$ +i' te +arrant oL'er !a$ "e gui%e% in !a5ing

te sear' an% seiure or +en te tings %es'ri"e% are li!ite% to

tose +i' "ear %ire't relation to te oense for +i' te +arrant is

"eing issue%.

ataan i&$ar% Es. ()GG

en (resi%ent )oraon A#uino too5 &o+er, te (resi%ential

)o!!ission on Goo% Goern!ent ?()GG@ +as for!e% in or%er to

re'oer ill gotten +ealt allege%l$ a'#uire% "$ for!er (resi%ent Mar'os

an% is 'ronies. A#uino ten issue% t+o exe'utie or%ers in 19<D an%

&ursuant tereto, a se#uestration an% a ta5eoer or%er +ere issue%

against ataan i&$ar% engineering )o., Fn'. ?A):@. A):

+as allege% to "e in a'tualit$ o+ne% an% 'ontrolle% "$ te Mar'oses

troug te Ro!ual%e fa!il$, an% in turn, troug %u!!$

sto'5ol%ers.

=e se#uestration or%er issue% in 19<D re#uire%, a!ong oters, tat

A): &ro%u'e 'or&orate re'or%s fro! 1973 to 19<D un%er &ain of

'onte!&t of te ()GG if it fails to %o so. A): assails tis or%er as it

aers, a!ong oters, tat it is against A):6s rigt against self

in'ri!ination an% unreasona"le sear'es an% seiures.

'!!() eter or not A): is 'orre't.

23



#)L* No. irst of all, ()GG as te rigt to re#uire te &ro%u'tion of

su' %o'u!ents &ursuant to te &o+er grante% to it. e'on%, an% !ore

i!&ortantl$, rigt against self-in'ri!ination as no a&&li'ation to

uri%i'al &ersons. =ere is a resere rigt in te legislature to

inestigate te 'ontra'ts of a 'or&oration an% 4n% out +eter it asex'ee%e% its &o+ers. Ft +oul% "e a strange ano!al$ to ol% tat a

state, aing 'artere% a 'or&oration li5e A): to !a5e use of

'ertain fran'ises, 'oul% not, in te exer'ise of soereignt$, in#uire

o+ tese fran'ises a% "een e!&lo$e%, an% +eter te$ a% "een

a"use%, an% %e!an% te &ro%u'tion of te 'or&orate "oo5s an% &a&ers

for tat &ur&ose.

Neiter is te rigt against unreasona"le sear'es an% seiures

a&&li'a"le ere. =ere +ere no sear'es !a%e an% no seiure &ursuantto an$ sear' +as eer !a%e. A): +as !erel$ or%ere% to &ro%u'e

te 'or&orate re'or%s.

'LL+R)+L !. R+M'R)-

.R. No. /001/0

July /0, 1223

%+C4! Villareal, C. Jose and J. Jose formed a partnership for the

operation of a restaurant and catering business under the name

“Aquarius Food House and Catering Services, each contributing

!"#. $amire% &as later added, contributing !"# as &ell. After

some time, one of them 'J. Jose( &ithdre& from the partnership) his

capital contribution &as refunded to him in cash b* agreement of the

partners.

+ithout prior no&ledge of respondents, petitioners closed do&n the

restaurant, allegedl* because of increased rental. -n arch /, /012,

3he respondent spouses &rote petitioners, sa*ing that the* &ere no

longer interested in continuing their partnership or in reopening the

2



restaurant, and that the* &ere accepting the latter4s offer to return

their capital contribution. 3he repeated oral and &ritten requests

&ere, ho&ever, left unheeded

5efore the $3C, respondents subsequentl* filed a Complaintfor the

collection of a sum of mone* from petitioners. the $3C ruled in favor

of the respondents, ordering petitioners to pa* damages and AF and

costs.

3he CA sustained the lo&er court4s decision, and made a computation

on the petitioners4 liabilit* to respondents6

Capital, at dissolution 778/,""",""".""

9ess6 liabilit* to creditors 20,DC<.00

Amount to be distributed to partners 2!0,:;.""

-ver6 <umber of partners 3

=ach partner4s share at dissolution !:,//;.""

77 &hich is erroneous, as this is the capital at the 5=>?<<?<> of the

partnership

Hence this petition.

2C



'!!() +-< the CA computation &as erroneous

#)L* +e hold that respondents have no right to demand from

petitioners the return of their equit* share.

@=S

>enerall*, in the pursuit of a partnership business, its capital is either

increased b* profits earned or decreased b* losses sustained. ?t does

not remain static and unaffected b* the changing fortunes of the

business. ?n the computation of the amount to be refunded torespondents, 3he CA did not consider6

/. 3he omission of an* provision for the depreciationof the furniture

and the equipment.

. 3he amorti%ation of the good&ill is not reflected

3. The capitali%ation amount paid b* the partnership to J. Jose &hen

he &ithdre& from the partnership.

5ecause of the abovementioned transactions, the partnership capital

&as actuall* reduced.

5ut the disposition is &ithout preBudice to proper proceedings for the

accounting, the liquidation and the distribution of the remainingpartnership assets, if an*

re"orio 5rte"a, 4omas del Castillo, Jr. and BenjaminBacorro v. C+, !)C and Joa6uin MisaG.R. No. 1092< Jul$ 3, 199CEitug, J.

%acts

2D



:rtega, ten a senior &artner in te la+ 4r! ito, Misa, an% *oa%a+it%re+ in sai% 4r!./e 4le% +it ) a &etition for %issolution an% li#ui%ation of&artnersi&.

) en "an' rule% tat +it%ra+al of Misa fro! te 4r! a%%issole% te &artnersi&.Reason; sin'e it is &artnersi& at +ill, tela+ 4r! 'oul% "e %issole% "$ an$ &artner atan$ti!e, su' as "$+it%ra+al terefro!, regar%less of goo% fait or "a% fait, sin'eno&artner 'an "e for'e% to 'ontinue in te &artnersi& against is+ill.

'ssue1. :N te &artnersi& of ito, Misa *oa%a ?no+ ito, *oa%a,

:rtega )astillo@is a &artnersi& at +ill 2. :N te+it%ra+al of Misa %issole% te &artnersi& regar%lessof isgoo% or "a% fait

#eld1. Yes. =e &artnersi& agree!ent of te 4r! &roi%es tat KtOe&artnersi& sall'ontinue so long as !utuall$ satisfa'tor$ an% u&onte %eat or legal in'a&a'it$ of one of te &artners, sall "e'ontinue% "$ te suriing &artners.K2. Yes. An$ one of te &artners!a$, at is sole &leasure, %i'tate a %issolution of te&artnersi& at+ill ?e.g. "$ +a$ of +it%ra+al of a &artner@. /e !ust, o+eer, a't

in goo%fait, not tat te atten%an'e of "a% fait 'an &reent te%issolution of te &artnersi& "uttat it 'an result in a lia"ilit$ for%a!ages

/eirs of Jose *i! Es. *i!

Business Organization – Partnership, Agency, Trust – Partner – Periodic

Accounting – Proft Sharing

Fn 19<0, te eirs of Jose *i! allege% tat Jose *i! entere% into a

&artnersi& agree!ent +it Ji!!$ Yu an% Nor"erto $. =e tree

'ontri"ute% (C0,000.00 ea' an% use% te fun%s to &ur'ase a tru'5 to

start teir tru'5ing "usiness. A $ear later o+eer, Jose *i! %ie%. =e

el%est son of Jose *i!, lPe%o *i!, too5 oer te tru'5ing "usiness an%

un%er is !anage!ent, te tru'5ing "usiness &ros&ere%. lPe%o +as

a"le to "ut real &ro&erties in is na!e. ro! one tru'5, e in'rease% it

to 9 tru'5s, all tru'5s +ere in is na!e o+eer. /e also a'#uire% oter

!otor ei'les in is na!e.

27



Fn 1993, Nor"erto $ +as 5ille%. Fn 199C, lPe%o *i! %ie% of a eart

atta'5. lPe%o6s +ife, Juliet *i!, too5 oer te &ro&erties "ut se

inti!ate% to Ji!!$ an% te eirs of Nor"erto tat se 'oul% not go on

+it te "usiness. o te &ro&erties in te &artnersi& +ere %ii%e%

a!ong te!.

No+ te oter eirs of Jose *i!, re&resente% "$ lenito *i!, re#uire%

Juliet to %o an a''ounting of all in'o!e, &ro4ts, an% &ro&erties fro! te

estate of lPe%o *i! as te$ 'lai!e% tat te$ are 'o-o+ners tereof.

Juliet refuse% en'e te$ sue% er.

=e eirs of Jose *i! argue% tat lPe%o *i! a'#uire% is &ro&erties

fro! te &artnersi& tat Jose *i! for!e% +it Nor"erto an% Ji!!$. Fn

'ourt, Ji!!$ Yu testi4e% tat Jose *i! +as te &artner an% not lPe%o*i!. =e eirs testi4e% tat lPe%o +as !erel$ te %rier of Jose *i!.

'!!() o is te H&artnerK "et+een Jose *i! an% lPe%o *i!Q

#)L* Ft is lPe%o *i! "ase% on te ei%en'e &resente% regar%less of

Ji!!$ Yu6s testi!on$ in 'ourt tat Jose *i! +as te &artner. Ff Jose *i!

+as te &artner, ten te &artnersi& +oul% ae "een %issole% u&on

is %eat ?in fa't, toug te ) %i% not sa$ so, F "eliee it soul% ae

"een %issole% u&on Nor"erto6s %eat in 1993@. A &artnersi& is

%issole% u&on te %eat of te &artner. urter, no ei%en'e +as

&resente% as to te arti'les of &artnersi& or 'ontra't of &artnersi&

"et+een Jose, Nor"erto an% Ji!!$. nfortunatel$, tere is none in tis

'ase, "e'ause te allege% &artnersi& +as neer for!all$ organie%.

ut at an$ rate, te u&re!e )ourt note% tat "ase% on te fun'tions

&erfor!e% "$ lPe%o, e is te a'tual &artner.

=e follo+ing 'ir'u!stan'es ten% to &roe tat lPe%o +as i!self te

&artner of Ji!!$ an% Nor"erto;

1.@ )resen'ia testi4e% tat Jose gae lPe%o (C0,000.00, as sare in

te &artnersi&, on a %ate tat 'oin'i%e% +it te &a$!ent of te initial

'a&ital in te &artnersi&

2.@ lPe%o ran te aairs of te &artnersi&, +iel%ing a"solute 'ontrol,

&o+er an% autorit$, +itout an$ interention or o&&osition

+atsoeer fro! an$ of &etitioners erein

2<



3.@ all of te &ro&erties, &arti'ularl$ te nine tru'5s of te &artnersi&,

+ere registere% in te na!e of lPe%o

.@ Ji!!$ testi4e% tat lPe%o %i% not re'eie +ages or salaries fro!

te &artnersi&, in%i'ating tat +at e a'tuall$ re'eie% +ere saresof te &ro4ts of te "usiness an%

C.@ none of te eirs of Jose, te allege% &artner, %e!an%e% &erio%i'

a''ounting fro! lPe%o %uring is lifeti!e. As re&eate%l$ stresse% in

te 'ase of Heirs o Tan ng !ee, a %e!an% for &erio%i' a''ounting is

ei%en'e of a &artnersi&.

urter!ore, &etitioners faile% to a%%u'e an$ ei%en'e to so+ tat

te real an% &ersonal &ro&erties a'#uire% an% registere% in te na!es

of lPe%o an% Juliet for!e% &art of te estate of Jose, aing "een

%erie% fro! Jose6s allege% &artnersi& +it Ji!!$ an% Nor"erto.

lPe%o +as not ust a ire% el& "ut one of te &artners in te tru'5ing

"usiness, a'tie an% isi"le in te running of its aairs fro! %a$ one

until tis 'ease% o&erations u&on is %e!ise. =e extent of is 'ontrol,

a%!inistration an% !anage!ent of te &artnersi& an% its "usiness,

te fa't tat its &ro&erties +ere &la'e% in is na!e, an% tat e +as

not &ai% salar$ or oter 'o!&ensation "$ te &artners, are in%i'atie of

te fa't tat lPe%o +as a &artner an% a 'ontrolling one at tat. Ft is

a&&arent tat te oter &artners onl$ 'ontri"ute% in te initial 'a&ital

"ut a% no sa$ tereafter on o+ te "usiness +as ran. i%entl$ it

+as troug lfre%o6s eorts an% ar% +or5 tat te &artnersi& +as

a"le to a'#uire !ore tru'5s an% oter+ise &ros&er. en te a&&ellant

&arti'i&ate% in te aairs of te &artnersi& "$ a'ting as te

"oo55ee&er sans salar$.

(ioneer Fnsuran'e s. )AG.R. No. <197 Jul$ 2<, 19<9

A)=;*i! is an o+ner-o&erator of outern Airlines ?A*@. Ja&an>o!esti' Airlines ?J>A@ an% *i! entere%into a sales 'ontra't.(ioneer Fnsuran'e an% uret$ )or&. as suret$ exe'ute% its suret$"on% in faor of J>A on"ealf of its &rin'i&al *i!. or%er Ma'iner$an% /ea'$ #ui&!ent )o, Fn'., ran'is'o an% Mo%esto)erantes,an% )onstan'io Maglana 'ontri"ute% fun%s "ase% on te!isre&resentation of *i! tat te$ +illfor! a ne+ 'or&oration toex&an% is "usiness. =e$ exe'ute% t+o se&arate in%e!nit$agree!ents in faorof (ioneer, one signe% "$ Maglana an% te oter

29

http://www.uberdigests.info/2012/06/heirs-of-tan-eng-kee-vs-court-of-appeals/

http://www.uberdigests.info/2012/06/heirs-of-tan-eng-kee-vs-court-of-appeals/



ointl$ signe% "$ *i! for A*, or!ae'o an% te)eranteses. =ein%e!nit$ agree!ents sti&ulate% tat te in%e!nitors &rin'i&all$agree an% "in%te!seles ointl$ an% seerall$ to in%e!nif$ an%ol% an% sae (ioneer fro! an% against an$all %a!ages,losses, et'.of +ateer 5in% an% nature !a$ in'ur in 'onse#uen'e of aing

"e'o!e suret$.*i! exe'ute% in faor of (ioneer a %ee% of 'attel!ortgage as se'urit$. &on %efault on te&a$!ents, (ioneer &ai%for i! an% 4le% a &etition for te fore'losure of 'attel !ortgage asse'urit$.Maglana, or!ae'o an% te )erantes6s 4le% 'ross-'lai!s against *i! alleging tat te$ +ere not &riies tote'ontra'ts signe% "$ *i! an% for re'oer$ of te su! of !one$ te$a%an'e% to *i! for te &ur'ase of te air'rafts. =e %e'ision +asren%ere% ol%ing *i! lia"le to &a$.

F;1. eter (ioneer as a 'ause of a'tion against res&on%ents.2. eter failure to in'or&orate auto!ati'all$ resulte% to %e fa'to&artnersi&.

/*>;1. , (ioneer as no rigt to institute an% !aintain in its o+n na!e ana'tion for te "ene4t of tereinsurers. Ft is +ell-settle% tat ana'tion "rougt "$ an attorne$-in-fa't in is o+n na!e instea% oftat of te &rin'i&al +ill not &ros&er, an% tis is so een +ere tena!e of te &rin'i&al is %is'lose% in te'o!&laint. An attorne$-in-

fa't is not a real &art$ in interest, tat tere is no la+ &er!itting ana'tion to "e"rougt "$ an attorne$-in-fa't.

2. N:. (artnersi& inter se %oes not ne'essaril$ exist, for or%inaril$&ersons 'annot "e !a%e toassu!e te relation of &artners as"et+een te!seles, +en teir &ur&ose is tat no &artnersi& sallexistan% it soul% "e i!&lie% onl$ +en ne'essar$ to %o usti'e"et+een te &arties tus, one +o ta5es no &artex'e&t to su"s'ri"efor sto'5 in a &ro&ose% 'or&oration +i' is neer legall$ for!e%%oes not "e'o!e a&artner +it oter su"s'ri"ers +o engage in"usiness un%er te na!e of te &reten%e% 'or&oration, so asto "e

lia"le as su' in an a'tion for settle!ent of te allege% &artnersi&an% 'ontri"ution.

*i! =ong *i! Es. (il ising Gear Fn%ustriesG.R. No. 13D< Noe!"er 3, 1999*essons A&&li'a"le; )or&oration "$ esto&&el %o'trine ?)or&orate*a+@

A)=;

30

http://www.philippinelegalguide.com/2013/05/jurisprudence-gr-no-136448-november-3.html

http://www.philippinelegalguide.com/2013/05/jurisprudence-gr-no-136448-november-3.html



e" 7 1990; :n "ealf of S:'ean Tuest ising )or&.S, Antonio)ua an% (eter Yao entere% into a &ur'ase of 4sing nets ofarious sies fro! (il. ising Gear Fn%ustries Fn'. ?(GF@'lai!ing te$ +ere engage% in enture +it *i! =ong *i!?N:= a signator$@

u$ers faile% to &a$ (GF 4le% a suit against )ua, Yao an% *i! + +rit of

&reli!inar$ atta'!ent )ua; A%!itte% lia"ilit$ an% re#ueste% resona"le ti!e an%

turne% oer nets in is &ossession Yao; ailre to a&&ear in su"se#uent earings *i!; )ounter'lai! an% )ross'lai! to life +rit of Atta'!ent )A aLr!e% R=); rit of Atta'!ent )ua, Yao an% *i! as

general &artners )ua, Yao an% *i! a% %e'i%e% to engage in "usiness + *i!Us

"roter Jesus *i! as 4nan'er of a loan V 'o!!on fun% )o!&ro!ise Agree!ent; &a$ loan + te &ro'ee%s of "oats

sale an% to %ii%e e#uall$ a!ong te! te ex'ess or lossF; N >o'trine of sto&&el 'an a&&l$ to *i!

/*>; Y. )A aLr!e%. Altoug &etitioner %i% not %ire'tl$ a't on "ealf of te 'or&.,

aing rea&e% te "ene4ts of te 'ontra't entere% into "$&ersons + +o! e &reiousl$ a% an existing rel., e is%ee!e% to "e &art of sai% asso'. an% 'oere% "$ te %o'trine

of esto&&el

pa dg.docx

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