Fue Leung v. IAC G. R. No. 70926 Jan. 31, 1989 Justice Gutierrez, Jr.

Facts: Leung Yiu (private respondent) alleged that he and Fue Leung (petitioner) were partners in a restaurant called Sun Wah Panciteria located in Sta. Cruz, Manila o That he contributed P4k financial assistance to said business, as evidenced by a receipt signed by petitioner (he presented 2 witnesses to corroborate his claim), that he would be entitled to receive 22% of the business annual profit in return o That he received a check worth P12k from petitioner from the profits of the restaurant o That he is now entitled to receive 22% of the net profits of the restaurant Petitioner denied being partners with private respondent o That he did not receive anything from private respondent and that it was his own money that used as capital of the restaurant o That the receipts presented by private respondent were not genuine o That based on various government licenses and permits, the restaurant was and still is a single proprietorship solely owned and operated by him TC and CA: private respondent Petitioner: private responded said that he only gave petitioner financial assistance he did not claim that he is a partner

Issue: Held:

WON petitioner and private respondents are partners.1

Yes, they are. o Art. 1767: By the contract of partnership, 2 or more persons bind themselves to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves. o While financial assistance ordinarily means giving money to another without expecting any return, its use in the present case gave a different meaning o Doctrine: the nature of the action filed in court is determined by the facts alleged in the complaint as constituting the cause of action. The right to demand an accounting exists as long as the partnership exists (Arts. 1806-1809). o Prescription begins to run only upon the dissolution of the partnership when the final accounting is done. Art. 1831: The Court may order the dissolution of a partnership whenever its continuation has become inequitable.

On application by or for a partner the court shall decree a dissolution whenever: 3) a partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business; 4) a partner willfully or persistently commits a breach of the partnership agreement, or otherwise as conducts himself in matters relating to the partnership business that is not reasonably practicable to carry on the business in partnership with him; xxx 6) other circumstances render a dissolution equitable.