Civil Law,  Legally Yours

Estanislao v. Court of Appeals

Estanislao v. Court of Appeals

G.R. No. L-49982; April 27, 1988


The petitioner and the private respondents were siblings who co-owned a certain lot in QC, which were being leased to Shell. They agreed to open and operate a gas station with an initial investment of P15,000.00 to be taken from the advance rentals due to them from SHELL. Thus, a joint affidavit was executed stating that the advanced rentals would redound to the “capital investment” for the operation of the partnership. Consequently, the petitioner and the respondents executed another document entitled “Additional Cash Pledge Agreement”, with Shell as a signatory, indicating that the advanced rentals of the same amount would start on May 24, 1966, rather than May 25, 1996 of the earlier agreement.

The petitioner failed to render proper accounting of the partnership. Thus, the private respondents filed a complaint for the petitioner to render proper accounting, and for the respondents to be given their proper share in the profits. The petitioner contended that there was no longer a partnership existing between him and the respondents since

  1. The subsequent agreement expressly superseded the former agreement;
  2. The subsequent agreement no longer referred to as “capital investments”; and
  3. The subsequent agreement was indicated that the business was in the nature of a sole proprietorship.


Did the subsequent agreement terminate the existing partnership between the petitioner and the respondents?


No. The Court held that the subsequent agreement did not terminate the partnership. The Court maintained that the provision containing the terms, “cancels and supersedes” only refers to the P15,000.00 amount which moved the date from May 24, 1996 from May 25, 1996.

Furthermore, while the term “capital investment” was no longer retained in the new agreement, and that the agreement speaks of the petitioner as the sole dealer, there still was no cancellation of the partnership since these adjustments were only proper since shell was a signatory and it was against their company policy that business would be a partnership and not a sole proprietorship.

Lastly, the Court made notice of the fact that the petitioner himself gave periodic accounting of the business, allowed authority to the respondent to examine and audit the accounts. Clearly, therefore, they bound themselves to contribute money to a common fund with the intention of dividing the profits among themselves.

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