Partnership - Mendiola vs Court of Appeals (497 SCRA 346) CORPO
On February 15, 2001, petitioner filed his complaint for illegal dismissal, recovery of
SECOND DIVISION separation pay, and payment of attorney's fees with the NLRC. 28
G.R. No. 159333 July 31, 2006 Labor Arbiter Felipe Pati ruled in favor of petitioner, finding there was constructive
dismissal.
ARSENIO T. MENDIOLA, petitioner,
vs. Private respondent Pacfor appealed to the NLRC which ruled in its favor. On
COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, PACIFIC December 20, 2001, the NLRC set aside the July 30, 2001 decision of the labor
FOREST RESOURCES, PHILS., INC. and/or CELLMARK AB, respondents. arbiter, for lack of jurisdiction and lack of merit. 31 It held there was no employer-
employee relationship between the parties. Based on the two agreements between
Facts: the parties, it concluded that petitioner is not an employee of private respondent
Pacfor, but a full co-owner (50/50 equity).
Private respondent Pacific Forest Resources, Phils., Inc. (Pacfor) is a corporation
organized and existing under the laws of California, USA. The NLRC denied petitioner's Motion for Reconsideration. 32
Private respondent Pacfor entered into a "Side Agreement on Representative Office Petitioner was not successful on his appeal to the Court of Appeals. The appellate
known as Pacific Forest Resources (Phils.), Inc."5 with petitioner Arsenio T. court upheld the ruling of the NLRC.
Mendiola (ATM).
Issue: Whether or not an employer-employee relationship exists between petitioner
Private respondent will establish a Pacfor representative office in the Philippines, to and private respondent Pacfor.
be known as Pacfor Phils, and petitioner ATM will be its President and its resident
agent in the Philippines. Ruling:
In July 2000, petitioner wrote Kevin Daley, Vice President for Asia of Pacfor, No partnership or co-ownership exists between the parties.
seeking confirmation of his 50% equity of Pacfor Phils. 10 Private respondent Pacfor,
through William Gleason, its President, replied that petitioner is not a part-owner of In a partnership, the members become co-owners of what is contributed to the firm
Pacfor Phils. because the latter is merely Pacfor-USA's representative office and not capital and of all property that may be acquired thereby and through the efforts of
an entity separate and distinct from Pacfor-USA. the members.36
Petitioner claimed that he was all along made to believe that he was in a joint The property or stock of the partnership forms a community of goods, a common
venture with them. fund, in which each party has a proprietary interest. 37 In fact, the New Civil Code
regards a partner as a co-owner of specific partnership property. 38 Each partner
October 2000, petitioner wrote Pacfor-USA demanding payment of unpaid possesses a joint interest in the whole of partnership property. If the relation does
commissions and office furniture and equipment rentals, amounting to more than not have this feature, it is not one of partnership. 39
one million dollars.15
This essential element, the community of interest, or co-ownership of, or joint
On the basis of the "Side Agreement," petitioner insisted that he and Pacfor equally interest in partnership property is absent in the relations between petitioner and
own Pacfor Phils. private respondent Pacfor.
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Partnership - Mendiola vs Court of Appeals (497 SCRA 346) CORPO
Petitioner is not a part-owner of Pacfor Phils. William Gleason, private respondent
Pacfor's President established this fact when he said that Pacfor Phils. is simply a
"theoretical company" for the purpose of dividing the income 50-50. He stressed that
petitioner knew of this arrangement from the very start, having been the one to
propose to private respondent Pacfor the setting up of a representative office, and
"not a branch office" in the Philippines to save on taxes. Thus, the parties in this
case, merely shared profits. This alone does not make a partnership. 40
Besides, a corporation cannot become a member of a partnership in the absence of
express authorization by statute or charter.41 This doctrine is based on the following
considerations: (1) that the mutual agency between the partners, whereby the
corporation would be bound by the acts of persons who are not its duly appointed
and authorized agents and officers, would be inconsistent with the policy of the law
that the corporation shall manage its own affairs separately and exclusively; and, (2)
that such an arrangement would improperly allow corporate property to become
subject to risks not contemplated by the stockholders when they originally invested
in the corporation.42 No such authorization has been proved in the case at bar.
IN VIEW WHEREOF, the petition is GRANTED.
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