Jarantilla v. Jarantilla (G.R. No. business arrangement.

This proved to be successful as they were able

to establish a manufacturing and trading business, acquire real
154486; Dec. 1, 2010) properties, and construct buildings, among other things. The same
ended in 1973 upon their voluntary dissolution.

CASE DIGEST: FEDERICO JARANTILLA, JR., Petitioner, v.

The spouses Buenaventura and ConchitaRemotigue executed a
ANTONIETA JARANTILLA, BUENAVENTURA REMOTIGUE,
document Acknowledgement of Participating Capital stating the
substituted by CYNTHIA REMOTIGUE, DOROTEO JARANTILLA
participating capital of of their co-owners as of the year 1952, with
and TOMAS JARANTILLA, Respondents. Jarantilla v. Jarantilla
AntonietaJarantillas stated as eight thousand pesos (P8,000.00) and
(G.R. No. 154486; December 1, 2010).
Federico Jarantilla, Jr.s as five thousand pesos (P5,000.00).

FACTS: The spouses Andres Jarantilla and FelisaJaleco were survived

The controversy started when Antonieta filed a complaint against
by eight children: Federico Sr., Delfin, Benjamin, Conchita, Rosita,
Buenaventura, Cynthia, Doroteo and Tomas, for the accounting of the
Pacita, Rafael and Antonieta. Petitioner Federico Jarantilla, Jr. is the
assets and income of the co-ownership, for its partition and the delivery
grandchild of the late Jarantilla spouses by their son Federico Jarantilla,
of her share corresponding to eight percent (8%), and for damages.
Sr. and his wife Leda Jamili. Petitioner also has two other brothers:
She alleged that the initial contribution of property and money came
Doroteo and Tomas Jarantilla.
from the heirs inheritance, and her subsequent annual investment of
seven thousand five hundred pesos (P7,500.00) as additional capital
The Jarantilla heirs extrajudicially partitioned amongst themselves the
came from the proceeds of her farm.
real properties of their deceased parents. With the exception of the real
property adjudicated to PacitaJarantilla, the heirs also agreed to allot
Respondents denied having formed a partnership. They did not deny
the produce of the said real properties for the years 1947-1949 for the
the existence and validity of the "Acknowledgement of Participating
studies of Rafael and AntonietaJarantilla.
Capital" and in fact used this as evidence to support their claim that
Antonietas 8% share was limited to the businesses enumerated therein.
Sps. Rosita Jarantilla and Vivencio Deocampo entered into an
Petitioner Federico Jr joined his aunt Antonieta and likewise asserted
agreement with the spouses Buenaventura Remotigue and
his share in the supposed partnership.
ConchitaJarantilla to provide mutual assistance to each other by way of
financial support to any commercial and agricultural activity on a joint
The RTC rendered judgment in favor of Antonieta and Federico. On
appeal, the CA set the RTC Decision. Petitioner filed a petition for Participating Capital is a duly notarized document voluntarily executed
review to the SC. by Conchita Jarantilla-Remotigue and Buenaventura Remotigue in
1957. Petitioner does not dispute its contents and is actually relying on
ISSUE: Did the CA err in ruling that petitioners are not entitled to it to prove his participation in the partnership.
profits over the businesses not listed in the Acknowledgement? Art. 1797. The losses and profits shall be distributed in conformity
with the agreement. If only the share of each partner in the profits
HELD: There is a co-ownership when an undivided thing or right has been agreed upon, the share of each in the losses shall be in
belongs to different persons. It is a partnership when two or more the same proportion.
persons bind themselves to contribute money, property, or industry to a In the absence of stipulation, the share of each partner in the profits and
common fund, with the intention of dividing the profits among losses shall be in proportion to what he may have contributed, but the
themselves. industrial partner shall not be liable for the losses.

The common ownership of property does not itself create a partnership The petitioner himself claims his share to be 6%, as stated in the
between the owners, though they may use it for the purpose of making Acknowledgement of Participating Capital. However, petitioner fails to
gains; and they may, without becoming partners, agree among realize that this document specifically enumerated the businesses
themselves as to the management, and use of such property and the covered by the partnership: Manila Athletic Supply, Remotigue Trading
application of the proceeds therefrom. in Iloilo City and Remotigue Trading in Cotabato City.

Under Article 1767 of the Civil Code, there are two essential elements Since there was a clear agreement that the capital the partners
in a contract of partnership: (a) an agreement to contribute money, contributed went to the three businesses, then there is no reason to
property or industry to a common fund; and (b) intent to divide the deviate from such agreement and go beyond the stipulations in the
profits among the contracting parties. document. Therefore, the CA did not err in limiting petitioners share to
the assets of the businesses enumerated in the Acknowledgement of
It is not denied that all the parties in this case have agreed to contribute Participating Capital.
capital to a common fund to be able to later on share its profits. They In Villareal v. Ramirez, the Court held that since a partnership is a
have admitted this fact, agreed to its veracity, and even submitted one separate juridical entity, the shares to be paid out to the partners
common documentary evidence to prove such partnership - the is necessarily limited only to its total resources.
Acknowledgement of Participating Capital.The Acknowledgement of
The petitioner further asserts that he is entitled to respondents
properties based on the concept of trust.

As a rule, the burden of proving the existence of a trust is on the party

asserting its existence, and such proof must be clear and
satisfactorily show the existence of the trust and its
elements. While implied trusts may be proved by oral evidence, the
evidence must be trustworthy and received by the courts with extreme
caution, and should not be made to rest on loose, equivocal or indefinite
declarations. Trustworthy evidence is required because oral evidence
can easily be fabricated.

The petitioner has failed to prove that there exists a trust over the
subject real properties. Aside from his bare allegations, he has failed to
show that the respondents used the partnerships money to purchase
the said properties. Even assuming arguendo that some partnership
income was used to acquire these properties, the petitioner should have
successfully shown that these funds came from his share in the
partnership profits. After all, by his own admission, and as stated in the
Acknowledgement of Participating Capital, he owned a mere 6% equity
in the partnership.
 G.R. No. 154486. December 1, 2010.* common fund; and (b) intent to divide the profits among the contracting parties.—
FEDERICO JARANTILLA, JR., petitioner, vs. ANTONIETA Under Article 1767 of the Civil Code, there are two essential elements in a contract
JARANTILLA, BUENAVENTURA REMOTIGUE, substituted by of partnership: (a) an agreement to contribute money, property or industry to a
CYNTHIA REMOTIGUE, DOROTEO JARANTILLA and TOMAS common fund; and (b) intent to divide the profits among the contracting parties.
Land Titles; Tax Declarations; While tax declarations and realty tax receipts
JARANTILLA, respondents.
do not conclusively prove ownership, they may constitute strong evidence of
Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; It
ownership when accompanied by possession for a period sufficient for
is a settled rule that in a petition for review on certiorari under Rule 45 of the Rules
prescription.—Petitioner has not presented evidence, other than these
of Civil Procedure, only questions of law may be raised by the parties and passed
unsubstantiated testimonies, to prove that the respondents did not have the
upon by this Court.—It is a settled rule that in a petition for review
means to fund their other businesses and real properties without the partnership’s
on certiorari under Rule 45 of the Rules of Civil Procedure, only questions of law
income. On the other hand, the respondents have not only, by testimonial
may be raised by the parties and passed upon by this Court. A question of law
evidence, proven their case against the petitioner, but have also presented
arises when there is doubt as to what the law is on a certain state of facts, while
sufficient documentary evidence to substantiate their claims, allegations and
there is a question of fact when the doubt arises as to the truth or falsity of the
defenses. They presented preponderant proof on how they acquired and funded
alleged facts. For a question to be one of law, the same must not involve an
such properties in addition to tax receipts and tax declarations. It has been held
examination of the probative value of the evidence presented by the litigants or
that “while tax declarations and realty tax receipts do not conclusively prove
any of them.
ownership, they may constitute strong evidence of ownership when accompanied
Same; Same; Same; Same; Factual findings of the trial court, when confirmed
by possession for a period sufficient for prescription.”
by the Court of Appeals, are final and conclusive.—Factual findings of the trial
Same; Torrens Title; Registration in the Torrens system does not create or vest
court, when confirmed by the Court of Appeals, are final and conclusive except in
title as registration is not a mode of acquiring ownership.—It is true that a
the following cases: (1) when the inference made is manifestly mistaken, absurd
certificate of title is merely an evidence of ownership or title over the particular
or impossible; (2) when there is a grave abuse of discretion; (3) when the finding is
property described therein. Registration in the Torrens system does not create or
grounded entirely on speculations, surmises or conjectures; (4) when the judgment
vest title as registration is not a mode of acquiring ownership; hence, this cannot
of the Court of Appeals is based on misapprehension of facts; (5) when the findings
deprive an aggrieved party of a remedy in law.
of fact are conflicting; (6) when the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the admissions of both
appellant and appellee; (7) when the findings of the Court of Appeals are contrary
to those of the trial court; (8) when the findings of fact are conclusions without
citation of specific evidence on which they are based; (9) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the parties and which,
if properly considered, would justify a different conclusion; and (10) when the
findings of fact of the Court of Appeals are premised on the absence of evidence
and are contradicted by the evidence on record.
Civil Law; Property; Words and Phrases; Co-ownership; There is a co-
ownership when an undivided thing or right belongs to different persons.—There
is a co-ownership when an undivided thing or right belongs to different persons. It
is a partnership when two or more persons bind themselves to contribute money,
property, or industry to a common fund, with the intention of dividing the profits
among themselves.
Same; Contracts; Partnership; There are two essential elements in a contract
of partnership: (a) an agreement to contribute money, property or industry to a
 Republic of the Philippines construct buildings, among other things.9 This partnership ended in 1973 when
SUPREME COURT the parties, in an "Agreement,"10 voluntarily agreed to completely dissolve their
Manila "joint business relationship/arrangement."11
FIRST DIVISION On April 29, 1957, the spouses Buenaventura and Conchita Remotigue
G.R. No. 154486 December 1, 2010 executed a document wherein they acknowledged that while registered only in
FEDERICO JARANTILLA, JR., Petitioner, Buenaventura Remotigue’s name, they were not the only owners of the capital of
vs. the businesses Manila Athletic Supply (712 Raon Street, Manila), Remotigue
ANTONIETA JARANTILLA, BUENAVENTURA REMOTIGUE, substituted Trading (Calle Real, Iloilo City) and Remotigue Trading (Cotabato City). In this
by CYNTHIA REMOTIGUE, DOROTEO JARANTILLA and TOMAS same "Acknowledgement of Participating Capital," they stated the participating
JARANTILLA, Respondents. capital of their co-owners as of the year 1952, with Antonieta Jarantilla’s stated
DECISION as eight thousand pesos (₱8,000.00) and Federico Jarantilla, Jr.’s as five thousand
LEONARDO-DE CASTRO, J.: pesos (₱5,000.00).12
This petition for review on certiorari1 seeks to modify the Decision2 of the The present case stems from the amended complaint13 dated April 22, 1987
Court of Appeals dated July 30, 2002 in CA-G.R. CV No. 40887, which set aside filed by Antonieta Jarantilla against Buenaventura Remotigue, Cynthia
the Decision3 dated December 18, 1992 of the Regional Trial Court (RTC) of Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla and Tomas Jarantilla, for
Quezon City, Branch 98 in Civil Case No. Q-50464. the accounting of the assets and income of the co-ownership, for its partition and
The pertinent facts are as follows: the delivery of her share corresponding to eight percent (8%), and for damages.
The spouses Andres Jarantilla and Felisa Jaleco were survived by eight Antonieta claimed that in 1946, she had entered into an agreement with Conchita
children: Federico, Delfin, Benjamin, Conchita, Rosita, Pacita, Rafael and and Buenaventura Remotigue, Rafael Jarantilla, and Rosita and Vivencio
Antonieta.4 Petitioner Federico Jarantilla, Jr. is the grandchild of the late Deocampo to engage in business. Antonieta alleged that the initial contribution of
Jarantilla spouses by their son Federico Jarantilla, Sr. and his wife Leda property and money came from the heirs’ inheritance, and her subsequent annual
Jamili.5 Petitioner also has two other brothers: Doroteo and Tomas Jarantilla. investment of seven thousand five hundred pesos (₱7,500.00) as additional capital
Petitioner was one of the defendants in the complaint before the RTC while came from the proceeds of her farm. Antonieta also alleged that from 1946-1969,
Antonieta Jarantilla, his aunt, was the plaintiff therein. His co-respondents before she had helped in the management of the business they co-owned without
he joined his aunt Antonieta in her complaint, were his late aunt Conchita receiving any salary. Her salary was supposedly rolled back into the business as
Jarantilla’s husband Buenaventura Remotigue, who died during the pendency of additional investments in her behalf. Antonieta further claimed co-ownership of
the case, his cousin Cynthia Remotigue, the adopted daughter of Conchita certain properties14 (the subject real properties) in the name of the defendants
Jarantilla and Buenaventura Remotigue, and his brothers Doroteo and Tomas since the only way the defendants could have purchased these properties were
Jarantilla.6 through the partnership as they had no other source of income.
In 1948, the Jarantilla heirs extrajudicially partitioned amongst themselves The respondents, including petitioner herein, in their Answer,15 denied
the real properties of their deceased parents.7 With the exception of the real having formed a partnership with Antonieta in 1946. They claimed that she was
property adjudicated to Pacita Jarantilla, the heirs also agreed to allot the produce in no position to do so as she was still in school at that time. In fact, the proceeds
of the said real properties for the years 1947-1949 for the studies of Rafael and of the lands they partitioned were devoted to her studies. They also averred that
Antonieta Jarantilla.8 while she may have helped in the businesses that her older sister Conchita had
In the same year, the spouses Rosita Jarantilla and Vivencio Deocampo formed with Buenaventura Remotigue, she was paid her due salary. They did not
entered into an agreement with the spouses Buenaventura Remotigue and deny the existence and validity of the "Acknowledgement of Participating Capital"
Conchita Jarantilla to provide mutual assistance to each other by way of financial and in fact used this as evidence to support their claim that Antonieta’s 8% share
support to any commercial and agricultural activity on a joint business was limited to the businesses enumerated therein. With regard to Antonieta’s
arrangement. This business relationship proved to be successful as they were able claim in their other corporations and businesses, the respondents said these
to establish a manufacturing and trading business, acquire real properties, and should also be limited to the number of her shares as specified in the respective
articles of incorporation. The respondents denied using the partnership’s income While the Court of Appeals agreed to some of the RTC’s factual findings, it
to purchase the subject real properties and said that the certificates of title should also established that Antonieta Jarantilla was not part of the partnership formed
be binding on her.16 in 1946, and that her 8% share was limited to the businesses enumerated in the
During the course of the trial at the RTC, petitioner Federico Jarantilla, Jr., Acknowledgement of Participating Capital. On July 30, 2002, the Court of Appeals
who was one of the original defendants, entered into a compromise rendered the herein challenged decision setting aside the RTC’s decision, as
agreement17 with Antonieta Jarantilla wherein he supported Antonieta’s claims follows:
and asserted that he too was entitled to six percent (6%) of the supposed WHEREFORE, the decision of the trial court, dated 18 December 1992 is SET
partnership in the same manner as Antonieta was. He prayed for a favorable ASIDE and a new one is hereby entered ordering that:
judgment in this wise: (1) after accounting, plaintiff Antonieta Jarantilla be given her share of 8% in
Defendant Federico Jarantilla, Jr., hereby joins in plaintiff’s prayer for an the assets and profits of Manila Athletic Supply, Remotigue Trading in Iloilo City
accounting from the other defendants, and the partition of the properties of the co- and Remotigue Trading in Cotabato City;
ownership and the delivery to the plaintiff and to defendant Federico Jarantilla, (2) after accounting, defendant Federico Jarantilla, Jr. be given his share of
Jr. of their rightful share of the assets and properties in the co- 6% of the assets and profits of the above-mentioned enterprises; and, holding that
ownership.181avvphi1 (3) plaintiff Antonieta Jarantilla is a stockholder in the following corporations
The RTC, in an Order19 dated March 25, 1992, approved the Joint Motion to to the extent stated in their Articles of Incorporation:
Approve Compromise Agreement20 and on December 18, 1992, decided in favor of (a) Rural Bank of Barotac Nuevo, Inc.;
Antonieta, to wit: (b) MAS Rubber Products, Inc.;
WHEREFORE, premises above-considered, the Court renders judgment in (c) Manila Athletic Supply, Inc.; and
favor of the plaintiff Antonieta Jarantilla and against defendants Cynthia (d) B. Remotigue Agro-Industrial Development Corp.
Remotigue, Doroteo Jarantilla and Tomas Jarantilla ordering the latter: (4) No costs.23
1. to deliver to the plaintiff her 8% share or its equivalent amount on the real The respondents, on August 20, 2002, filed a Motion for Partial
properties covered by TCT Nos. 35655, 338398, 338399 & 335395, all of the Reconsideration but the Court of Appeals denied this in a Resolution24 dated
Registry of Deeds of Quezon City; TCT Nos. (18303)23341, 142882 & March 21, 2003.
490007(4615), all of the Registry of Deeds of Rizal; and TCT No. T-6309 of the Antonieta Jarantilla filed before this Court her own petition for review
Registry of Deeds of Cotabato based on their present market value; on certiorari25 dated September 16, 2002, assailing the Court of Appeals’ decision
2. to deliver to the plaintiff her 8% share or its equivalent amount on the on "similar grounds and similar assignments of errors as this present case"26 but
Remotigue Agro-Industrial Corporation, Manila Athletic Supply, Inc., MAS it was dismissed on November 20, 2002 for failure to file the appeal within the
Rubber Products, Inc. and Buendia Recapping Corporation based on the shares of reglementary period of fifteen (15) days in accordance with Section 2, Rule 45 of
stocks present book value; the Rules of Court.27
3. to account for the assets and income of the co-ownership and deliver to Petitioner filed before us this petition for review on the sole ground that:
plaintiff her rightful share thereof equivalent to 8%; THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT
4. to pay plaintiff, jointly and severally, the sum of ₱50,000.00 as moral RULING THAT PETITIONER FEDERICO JARANTILLA, JR. IS ENTITLED TO
damages; A SIX PER CENTUM (6%) SHARE OF THE OWNERSHIP OF THE REAL
5. to pay, jointly and severally, the sum of ₱50,000.00 as attorney’s fees; and PROPERTIES ACQUIRED BY THE OTHER DEFENDANTS USING COMMON
6. to pay, jointly and severally, the costs of the suit.21 FUNDS FROM THE BUSINESSES WHERE HE HAD OWNED SUCH SHARE.28
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 Petitioner asserts that he was in a partnership with the Remotigue spouses,
judgment and ordering the partition of the co-ownership and giving to [him] six the Deocampo spouses, Rosita Jarantilla, Rafael Jarantilla, Antonieta Jarantilla
per centum (6%) of the properties."22 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 claim was essentially the same as Antonieta’s, the Court of Appeals also ruled that
his 6% share in the subject real properties. He is relying on the Acknowledgement petitioner be given his 6% share in the same businesses listed in the
of Participating Capital, on his own testimony, and Antonieta Jarantilla’s Acknowledgement of Participating Capital.
testimony to support this contention. Factual findings of the trial court, when confirmed by the Court of Appeals,
The core issue is whether or not the partnership subject of the are final and conclusive except in the following cases: (1) when the inference made
Acknowledgement of Participating Capital funded the subject real properties. In is manifestly mistaken, absurd or impossible; (2) when there is a grave abuse of
other words, what is the petitioner’s right over these real properties? Issue discretion; (3) when the finding is grounded entirely on speculations, surmises or
It is a settled rule that in a petition for review on certiorari under Rule 45 of conjectures; (4) when the judgment of the Court of Appeals is based on
the Rules of Civil Procedure, only questions of law may be raised by the parties misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the
and passed upon by this Court.29 Court of Appeals, in making its findings, went beyond the issues of the case and
A question of law arises when there is doubt as to what the law is on a certain the same is contrary to the admissions of both appellant and appellee; (7) when
state of facts, while there is a question of fact when the doubt arises as to the truth the findings of the Court of Appeals are contrary to those of the trial court; (8)
or falsity of the alleged facts. For a question to be one of law, the same must not when the findings of fact are conclusions without citation of specific evidence on
involve an examination of the probative value of the evidence presented by the which they are based; (9) when the Court of Appeals manifestly overlooked certain
litigants or any of them. The resolution of the issue must rest solely on what the relevant facts not disputed by the parties and which, if properly considered, would
law provides on the given set of circumstances. Once it is clear that the issue justify a different conclusion; and (10) when the findings of fact of the Court of
invites a review of the evidence presented, the question posed is one of fact. Thus, Appeals are premised on the absence of evidence and are contradicted by the
the test of whether a question is one of law or of fact is not the appellation given evidence on record.33
to such question by the party raising the same; rather, it is whether the appellate In this case, we find no error in the ruling of the Court of Appeals.
court can determine the issue raised without reviewing or evaluating the evidence, Both the petitioner and Antonieta Jarantilla characterize their relationship
in which case, it is a question of law; otherwise it is a question of fact.30 with the respondents as a co-ownership, but in the same breath, assert that a
Since the Court of Appeals did not fully adopt the factual findings of the RTC, verbal partnership was formed in 1946 and was affirmed in the 1957
this Court, in resolving the questions of law that are now in issue, shall look into Acknowledgement of Participating Capital.
the facts only in so far as the two courts a quo differed in their appreciation thereof. There is a co-ownership when an undivided thing or right belongs to different
The RTC found that an unregistered partnership existed since 1946 which persons.34 It is a partnership when two or more persons bind themselves to
was affirmed in the 1957 document, the "Acknowledgement of Participating contribute money, property, or industry to a common fund, with the intention of
Capital." The RTC used this as its basis for giving Antonieta Jarantilla an 8% dividing the profits among themselves.35 The Court, in Pascual v. The
share in the three businesses listed therein and in the other businesses and real Commissioner of Internal Revenue,36 quoted the concurring opinion of Mr. Justice
properties of the respondents as they had supposedly acquired these through funds Angelo Bautista in Evangelista v. The Collector of Internal Revenue37 to further
from the partnership.31 elucidate on the distinctions between a co-ownership and a partnership, to wit:
The Court of Appeals, on the other hand, agreed with the RTC as to I wish however to make the following observation: Article 1769 of the new
Antonieta’s 8% share in the business enumerated in the Acknowledgement of Civil Code lays down the rule for determining when a transaction should be
Participating Capital, but not as to her share in the other corporations and real deemed a partnership or a co-ownership. Said article paragraphs 2 and 3, provides;
properties. The Court of Appeals ruled that Antonieta’s claim of 8% is based on the (2) Co-ownership or co-possession does not itself establish a partnership,
"Acknowledgement of Participating Capital," a duly notarized document which whether such co-owners or co-possessors do or do not share any profits made by
was specific as to the subject of its coverage. Hence, there was no reason to pattern the use of the property;
her share in the other corporations from her share in the partnership’s businesses. (3) The sharing of gross returns does not of itself establish a partnership,
The Court of Appeals also said that her claim in the respondents’ real properties whether or not the persons sharing them have a joint or common right or interest
was more "precarious" as these were all covered by certificates of title which served in any property from which the returns are derived;
as the best evidence as to all the matters contained therein.32 Since petitioner’s
 From the above it appears that the fact that those who agree to form a co- common fund. Hence, the issue narrows down to their intent in acting as they
ownership share or do not share any profits made by the use of the property held in did.39 It is not denied that all the parties in this case have agreed to contribute
common does not convert their venture into a partnership. Or the sharing of the capital to a common fund to be able to later on share its profits. They have
gross returns does not of itself establish a partnership whether or not the persons admitted this fact, agreed to its veracity, and even submitted one common
sharing therein have a joint or common right or interest in the property. This only documentary evidence to prove such partnership - the Acknowledgement of
means that, aside from the circumstance of profit, the presence of other elements Participating Capital.
constituting partnership is necessary, such as the clear intent to form a partnership, As this case revolves around the legal effects of the Acknowledgement of
the existence of a juridical personality different from that of the individual Participating Capital, it would be instructive to examine the pertinent portions of
partners, and the freedom to transfer or assign any interest in the property by one this document:
with the consent of the others. ACKNOWLEDGEMENT OF
It is evident that an isolated transaction whereby two or more persons PARTICIPATING CAPITAL
contribute funds to buy certain real estate for profit in the absence of other KNOW ALL MEN BY THESE PRESENTS:
circumstances showing a contrary intention cannot be considered a partnership. That we, the spouses Buenaventura Remotigue and Conchita Jarantilla de
Persons who contribute property or funds for a common enterprise and agree Remotigue, both of legal age, Filipinos and residents of Loyola Heights, Quezon
to share the gross returns of that enterprise in proportion to their contribution, City, P.I. hereby state:
but who severally retain the title to their respective contribution, are not thereby That the Manila Athletic Supply at 712 Raon, Manila, the Remotigue Trading
rendered partners. They have no common stock or capital, and no community of of Calle Real, Iloilo City and the Remotigue Trading, Cotabato Branch, Cotabato,
interest as principal proprietors in the business itself which the proceeds derived. P.I., all dealing in athletic goods and equipments, and general merchandise are
A joint purchase of land, by two, does not constitute a co-partnership in recorded in their respective books with Buenaventura Remotigue as the registered
respect thereto; nor does an agreement to share the profits and losses on the sale owner and are being operated by them as such:
of land create a partnership; the parties are only tenants in common. That they are not the only owners of the capital of the three establishments
Where plaintiff, his brother, and another agreed to become owners of a single and their participation in the capital of the three establishments together with the
tract of realty, holding as tenants in common, and to divide the profits of disposing other co-owners as of the year 1952 are stated as follows:
of it, the brother and the other not being entitled to share in plaintiff’s commission, 1. Buenaventura Remotigue (TWENTY-FIVE THOUSAND)₱25,000.00
no partnership existed as between the three parties, whatever their relation may 2. Conchita Jarantilla de Remotigue (TWENTY-FIVE THOUSAND)…
have been as to third parties. 25,000.00
In order to constitute a partnership inter sese there must be: (a) An intent to 3. Vicencio Deocampo (FIFTEEN THOUSAND)…… 15,000.00
form the same; (b) generally participating in both profits and losses; (c) and such a 4. Rosita J. Deocampo (FIFTEEN THOUSAND)….... 15,000.00
community of interest, as far as third persons are concerned as enables each party 5. Antonieta Jarantilla (EIGHT THOUSAND)……….. 8,000.00
to make contract, manage the business, and dispose of the whole property. x x x. 6. Rafael Jarantilla (SIX THOUSAND)…………….. ... 6,000.00
The common ownership of property does not itself create a partnership 7. Federico Jarantilla, Jr. (FIVE THOUSAND)……….. 5,000.00
between the owners, though they may use it for the purpose of making gains; and 8. Quintin Vismanos (TWO THOUSAND)…………... 2,000.00
they may, without becoming partners, agree among themselves as to the That aside from the persons mentioned in the next preceding paragraph, no
management, and use of such property and the application of the proceeds other person has any interest in the above-mentioned three establishments.
therefrom.38 (Citations omitted.) IN WITNESS WHEREOF, they sign this instrument in the City of Manila,
Under Article 1767 of the Civil Code, there are two essential elements in a P.I., this 29th day of April, 1957.
contract of partnership: (a) an agreement to contribute money, property or industry [Sgd.]
to a common fund; and (b) intent to divide the profits among the contracting parties. BUENAVENTURA REMOTIGUE
The first element is undoubtedly present in the case at bar, for, admittedly, all the [Sgd.]
parties in this case have agreed to, and did, contribute money and property to a CONCHITA JARANTILLA DE REMOTIGUE40
 The Acknowledgement of Participating Capital is a duly notarized document purchased using funds of the partnership, wherein he has a 6% share, then "law
voluntarily executed by Conchita Jarantilla-Remotigue and Buenaventura and equity mandates that he should be considered as a co-owner of those
Remotigue in 1957. Petitioner does not dispute its contents and is actually relying properties in such proportion."43 In Pigao v. Rabanillo,44 this Court explained the
on it to prove his participation in the partnership. Article 1797 of the Civil Code concept of trusts, to wit:
provides: Express trusts are created by the intention of the trustor or of the parties,
Art. 1797. The losses and profits shall be distributed in conformity with the while implied trusts come into being by operation of law, either through
agreement. If only the share of each partner in the profits has been agreed upon, implication of an intention to create a trust as a matter of law or through the
the share of each in the losses shall be in the same proportion. imposition of the trust irrespective of, and even contrary to, any such intention. In
In the absence of stipulation, the share of each partner in the profits and turn, implied trusts are either resulting or constructive trusts. Resulting trusts
losses shall be in proportion to what he may have contributed, but the industrial are based on the equitable doctrine that valuable consideration and not legal title
partner shall not be liable for the losses. As for the profits, the industrial partner determines the equitable title or interest and are presumed always to have been
shall receive such share as may be just and equitable under the circumstances. If contemplated by the parties. They arise from the nature or circumstances of the
besides his services he has contributed capital, he shall also receive a share in the consideration involved in a transaction whereby one person thereby becomes
profits in proportion to his capital. (Emphases supplied.) invested with legal title but is obligated in equity to hold his legal title for the
It is clear from the foregoing that a partner is entitled only to his share as benefit of another.45
agreed upon, or in the absence of any such stipulations, then to his share in On proving the existence of a trust, this Court held that:
proportion to his contribution to the partnership. The petitioner himself claims his Respondent has presented only bare assertions that a trust was created.
share to be 6%, as stated in the Acknowledgement of Participating Capital. Noting the need to prove the existence of a trust, this Court has held thus:
However, petitioner fails to realize that this document specifically enumerated the "As a rule, the burden of proving the existence of a trust is on the party
businesses covered by the partnership: Manila Athletic Supply, Remotigue asserting its existence, and such proof must be clear and satisfactorily show the
Trading in Iloilo City and Remotigue Trading in Cotabato City. Since there was a existence of the trust and its elements. While implied trusts may be proved by oral
clear agreement that the capital the partners contributed went to the three evidence, the evidence must be trustworthy and received by the courts with
businesses, then there is no reason to deviate from such agreement and go beyond extreme caution, and should not be made to rest on loose, equivocal or indefinite
the stipulations in the document. Therefore, the Court of Appeals did not err in declarations. Trustworthy evidence is required because oral evidence can easily be
limiting petitioner’s share to the assets of the businesses enumerated in the fabricated." 46
Acknowledgement of Participating Capital. The petitioner has failed to prove that there exists a trust over the subject
In Villareal v. Ramirez,41 the Court held that since a partnership is a separate real properties. Aside from his bare allegations, he has failed to show that the
juridical entity, the shares to be paid out to the partners is necessarily limited only respondents used the partnership’s money to purchase the said properties. Even
to its total resources, to wit: assuming arguendo that some partnership income was used to acquire these
Since it is the partnership, as a separate and distinct entity, that must refund properties, the petitioner should have successfully shown that these funds came
the shares of the partners, the amount to be refunded is necessarily limited to its from his share in the partnership profits. After all, by his own admission, and as
total resources. In other words, it can only pay out what it has in its coffers, which stated in the Acknowledgement of Participating Capital, he owned a mere 6%
consists of all its assets. However, before the partners can be paid their shares, the equity in the partnership.
creditors of the partnership must first be compensated. After all the creditors have In essence, the petitioner is claiming his 6% share in the subject real
been paid, whatever is left of the partnership assets becomes available for the properties, by relying on his own self-serving testimony and the equally biased
payment of the partners’ shares.42 testimony of Antonieta Jarantilla. Petitioner has not presented evidence, other
There is no evidence that the subject real properties were assets of the than these unsubstantiated testimonies, to prove that the respondents did not
partnership referred to in the Acknowledgement of Participating Capital. have the means to fund their other businesses and real properties without the
The petitioner further asserts that he is entitled to respondents’ properties partnership’s income. On the other hand, the respondents have not only, by
based on the concept of trust. He claims that since the subject real properties were testimonial evidence, proven their case against the petitioner, but have also
presented sufficient documentary evidence to substantiate their claims, SEC. 48. Certificate not subject to collateral attack. – A certificate of title shall
allegations and defenses. They presented preponderant proof on how they acquired not be subject to collateral attack. It cannot be altered, modified, or cancelled
and funded such properties in addition to tax receipts and tax declarations.47 It except in a direct proceeding in accordance with law.
has been held that "while tax declarations and realty tax receipts do not This Court has deemed an action or proceeding to be "an attack on a title
conclusively prove ownership, they may constitute strong evidence of ownership when its objective is to nullify the title, thereby challenging the judgment pursuant
when accompanied by possession for a period sufficient for to which the title was decreed."56 In Aguilar v. Alfaro,57 this Court further
prescription."48 Moreover, it is a rule in this jurisdiction that testimonial evidence distinguished between a direct and an indirect or collateral attack, as follows:
cannot prevail over documentary evidence.49 This Court had on several occasions, A collateral attack transpires when, in another action to obtain a different
expressed our disapproval on using mere self-serving testimonies to support one’s relief and as an incident to the present action, an attack is made against the
claim. In Ocampo v. Ocampo,50 a case on partition of a co-ownership, we held that: judgment granting the title. This manner of attack is to be distinguished from a
Petitioners assert that their claim of co-ownership of the property was direct attack against a judgment granting the title, through an action whose main
sufficiently proved by their witnesses -- Luisa Ocampo-Llorin and Melita Ocampo. objective is to annul, set aside, or enjoin the enforcement of such judgment if not
We disagree. Their testimonies cannot prevail over the array of documents yet implemented, or to seek recovery if the property titled under the judgment had
presented by Belen. A claim of ownership cannot be based simply on the been disposed of. x x x.
testimonies of witnesses; much less on those of interested parties, self-serving as Petitioner’s only piece of documentary evidence is the Acknowledgement of
they are.51 Participating Capital, which as discussed above, failed to prove that the real
It is true that a certificate of title is merely an evidence of ownership or title properties he is claiming co-ownership of were acquired out of the proceeds of the
over the particular property described therein. Registration in the Torrens system businesses covered by such document. Therefore, petitioner’s theory has no factual
does not create or vest title as registration is not a mode of acquiring ownership; or legal leg to stand on.
hence, this cannot deprive an aggrieved party of a remedy in law.52 However, WHEREFORE, the Petition is hereby DENIED and the Decision of the Court
petitioner asserts ownership over portions of the subject real properties on the of Appeals in CA-G.R. CV No. 40887, dated July 30, 2002 is AFFIRMED.
strength of his own admissions and on the testimony of Antonieta SO ORDERED.
Jarantilla.1avvphi1 As held by this Court in Republic of the Philippines v. TERESITA J. LEONARDO-DE CASTRO
Orfinada, Sr.53: Associate Justice
Indeed, a Torrens title is generally conclusive evidence of ownership of the WE CONCUR:
land referred to therein, and a strong presumption exists that a Torrens title was RENATO C. CORONA
regularly issued and valid. A Torrens title is incontrovertible against Chief Justice
any informacion possessoria, of other title existing prior to the issuance thereof not Chairperson
annotated on the Torrens title. Moreover, persons dealing with property covered DIOSDADO M. PERALTA* ROBERTO A. ABAD**
by a Torrens certificate of title are not required to go beyond what appears on its Associate Justice Associate Justice
face.54 JOSE PORTUGAL PEREZ
As we have settled that this action never really was for partition of a co- Associate Justice
ownership, to permit petitioner’s claim on these properties is to allow a collateral, CERTIFICATION
indirect attack on respondents’ admitted titles. In the words of the Court of Pursuant to Section 13, Article VIII of the Constitution, I certify that the
Appeals, "such evidence cannot overpower the conclusiveness of these certificates conclusions in the above Decision had been reached in consultation before the case
of title, more so since plaintiff’s [petitioner’s] claims amount to a collateral attack, was assigned to the writer of the opinion of the Court’s Division.
which is prohibited under Section 48 of Presidential Decree No. 1529, the Property RENATO C. CORONA
Registration Decree."55 Chief Justice
 30 Binay v. Odeña, G.R. No. 163683, June 8, 2007, 524 SCRA 248, 255-256,
citing Velayo-Fong v. Velayo, G.R. No. 155488, December 6, 2006, 510 SCRA 320,
329-330.
31 Rollo, pp. 105-110.
Footnotes
32 Id. at 42.
* Per Special Order No. 913 dated November 2, 2010.
33 Go v. Court of Appeals, 403 Phil. 883, 890 (2001).
** Per Special Order No. 917 dated November 24, 2010.
1 Under Rule 45 of the 1997 Rules of Civil Procedure. 34 Civil Code, Art. 484.
2 Rollo, pp. 34-45; penned by Associate Justice Buenaventura J. Guerrero 35 Civil Code, Art. 1767.
36 248 Phil. 788 (1988).
with Associate Justices Rodrigo V. Cosico and Perlita J. Tria Tirona concurring.
3 Id. at 105-110. 37 102 Phil. 140 (1957).

4 Id at 34. 38 Pascual v. The Commissioner of Internal Revenue, supra note 36 at 795-

5 Records, Vol. I, p. 1. 796.
6 Rollo, p. 49. 39 Id. at 795.

7 Id at 34-35. 40 Records, Vol. I, p. 6.

8 Records, Vol. I, p. 1. 41 453 Phil. 999 (2003).

9 Id at 7. 42 Id. at 1008-1009.

10 Id at 7-9. 43 Rollo, p. 24.

11 Id at 7. 44 G.R. No. 150712, May 2, 2006, 488 SCRA 546.

12 Id at 6. 45 Id. at 560-561.
13 Rollo, pp. 48-57. 46 Oco v. Limbaring, G.R. No. 161298, January 31, 2006, 481 SCRA 348.

14 Rollo, p. 18; the subject real properties are covered by TCT Nos. 35655, 47 Records, Vol. I, pp. 7-9, 54-62, Vol. II, pp. 482-486, 535-564, 567-653.
48 Heirs of Clemente Ermac v. Heirs of Vicente Ermac, 451 Phil. 368, 378
338398, 338399 & 335395, all of the Registry of Deeds of Quezon City; TCT Nos.
(18303)23341, 142882 & 490007(4615), all of the Registry of Deeds of Rizal; and (2003).
49 Romago Electric Co., Inc. v. Court of Appeals, 388 Phil. 964, 976 (2000).
TCT No. T-6309 of the Registry of Deeds of Cotabato.
15 Id. at 72-76. 50 471 Phil. 519 (2004).

16 Id. at 111-197. 51 Id. at 539.

17 Id. at 83-87. 52 Heirs of Clemente Ermac v. Heirs of Vicente Ermac, supra note 48 at 377.

18 Id. at 85-86. 53 G.R. No. 141145, November 12, 2004, 442 SCRA 342.

19 Id. at 102-104. 54 Id. at 359.

20 Id. at 83-87. 55 Rollo, pp. 42-43.

21 Id. at 109-110. 56 Oño v. Lim, G.R. No. 154270, March 9, 2010.

22 Id. at 205. 57 G.R. No. 164402, July 5, 2010.

23 Id. at 44.
24 CA rollo, p. 564.
25 Docketed as G.R. No. 154722.
26 Rollo, p. 313.
27 CA rollo, p. 284.
28 Rollo, p. 20.
29 Vector Shipping Corporation v. Macasa, G.R. No. 160219, July 21,

2008, 559 SCRA 105.