DIVISION

[ GR No. 172690, Mar 03, 2010 ]

HEIRS OF JOSE LIM v. JULIET VILLA LIM

DECISION
628 Phil. 40

NACHURA, J.:
[1]
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil
[2]
Procedure, assailing the Court of Appeals (CA) Decision dated June 29, 2005, which
[3]
reversed and set aside the decision of the Regional Trial Court (RTC) of Lucena City,
dated April 12, 2004.

The facts of the case are as follows:

Petitioners are the heirs of the late Jose Lim (Jose), namely: Jose's widow Cresencia Palad
(Cresencia); and their children Elenito, Evelia, Imelda, Edelyna and Edison, all surnamed
[4]
Lim (petitioners), represented by Elenito Lim (Elenito). They filed a Complaint for
Partition, Accounting and Damages against respondent Juliet Villa Lim (respondent), widow
of the late Elfledo Lim (Elfledo), who was the eldest son of Jose and Cresencia.

Petitioners alleged that Jose was the liaison officer of Interwood Sawmill in Cagsiay,
Mauban, Quezon. Sometime in 1980, Jose, together with his friends Jimmy Yu (Jimmy) and
Norberto Uy (Norberto), formed a partnership to engage in the trucking business. Initially,
with a contribution of P50,000.00 each, they purchased a truck to be used in the hauling
and transport of lumber of the sawmill. Jose managed the operations of this trucking
business until his death on August 15, 1981. Thereafter, Jose's heirs, including Elfledo, and
partners agreed to continue the business under the management of Elfledo. The shares in
the partnership profits and income that formed part of the estate of Jose were held in trust
by Elfledo, with petitioners' authority for Elfledo to use, purchase or acquire properties
using said funds.

Petitioners also alleged that, at that time, Elfledo was a fresh commerce graduate serving as
his father's driver in the trucking business. He was never a partner or an investor in the
business and merely supervised the purchase of additional trucks using the income from the
trucking business of the partners. By the time the partnership ceased, it had nine trucks,
/
which were all registered in Elfledo's name. Petitioners asseverated that it was also through
Elfledo's management of the partnership that he was able to purchase numerous real
properties by using the profits derived therefrom, all of which were registered in his name
and that of respondent. In addition to the nine trucks, Elfledo also acquired five other motor
vehicles.

On May 18, 1995, Elfledo died, leaving respondent as his sole surviving heir. Petitioners
claimed that respondent took over the administration of the aforementioned properties,
which belonged to the estate of Jose, without their consent and approval. Claiming that they
are co-owners of the properties, petitioners required respondent to submit an accounting of
all income, profits and rentals received from the estate of Elfledo, and to surrender the
administration thereof. Respondent refused; thus, the filing of this case.

Respondent traversed petitioners' allegations and claimed that Elfledo was himself a partner
of Norberto and Jimmy. Respondent also claimed that per testimony of Cresencia, sometime
in 1980, Jose gave Elfledo P50,000.00 as the latter's capital in an informal partnership with
Jimmy and Norberto. When Elfledo and respondent got married in 1981, the partnership
only had one truck; but through the efforts of Elfledo, the business flourished. Other than
this trucking business, Elfledo, together with respondent, engaged in other business
ventures. Thus, they were able to buy real properties and to put up their own car assembly
and repair business. When Norberto was ambushed and killed on July 16, 1993, the trucking
business started to falter. When Elfledo died on May 18, 1995 due to a heart attack,
respondent talked to Jimmy and to the heirs of Norberto, as she could no longer run the
business. Jimmy suggested that three out of the nine trucks be given to him as his share,
while the other three trucks be given to the heirs of Norberto. However, Norberto's wife,
Paquita Uy, was not interested in the vehicles. Thus, she sold the same to respondent, who
paid for them in installments.

Respondent also alleged that when Jose died in 1981, he left no known assets, and the
partnership with Jimmy and Norberto ceased upon his demise. Respondent also stressed
that Jose left no properties that Elfledo could have held in trust. Respondent maintained
that all the properties involved in this case were purchased and acquired through her and
her husband's joint efforts and hard work, and without any participation or contribution
from petitioners or from Jose. Respondent submitted that these are conjugal partnership
properties; and thus, she had the right to refuse to render an accounting for the income or
profits of their own business.

Trial on the merits ensued. On April 12, 2004, the RTC rendered its decision in favor of
petitioners, thus:

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 WHEREFORE, premises considered, judgment is hereby rendered:

1) Ordering the partition of the above-mentioned properties equally between the

plaintiffs and heirs of Jose Lim and the defendant Juliet Villa-Lim; and

2) Ordering the defendant to submit an accounting of all incomes, profits and rentals
received by her from said properties.

SO ORDERED.

Aggrieved, respondent appealed to the CA.

On June 29, 2005, the CA reversed and set aside the RTC's decision, dismissing petitioners'
complaint for lack of merit. Undaunted, petitioners filed their Motion for Reconsideration,
[5] which the CA, however, denied in its Resolution[6] dated May 8, 2006.

Hence, this Petition, raising the sole question, viz.:

IN THE APPRECIATION BY THE COURT OF THE EVIDENCE SUBMITTED BY THE

PARTIES, CAN THE TESTIMONY OF ONE OF THE PETITIONERS BE GIVEN
GREATER WEIGHT THAN THAT BY A FORMER PARTNER ON THE ISSUE OF THE
[7]
IDENTITY OF THE OTHER PARTNERS IN THE PARTNERSHIP?

In essence, petitioners argue that according to the testimony of Jimmy, the sole surviving
partner, Elfledo was not a partner; and that he and Norberto entered into a partnership with
Jose. Thus, the CA erred in not giving that testimony greater weight than that of Cresencia,
who was merely the spouse of Jose and not a party to the partnership.[8]

Respondent counters that the issue raised by petitioners is not proper in a petition for
review on certiorari under Rule 45 of the Rules of Civil Procedure, as it would entail the
review, evaluation, calibration, and re-weighing of the factual findings of the CA. Moreover,
respondent invokes the rationale of the CA decision that, in light of the admissions of
Cresencia and Edison and the testimony of respondent, the testimony of Jimmy was
effectively refuted; accordingly, the CA's reversal of the RTC's findings was fully justified.[9]

We resolve first the procedural matter regarding the propriety of the instant Petition.

Verily, the evaluation and calibration of the evidence necessarily involves consideration of
/
factual issues -- an exercise that is not appropriate for a petition for review on certiorari
under Rule 45. This rule provides that the parties may raise only questions of law, because
the Supreme Court is not a trier of facts. Generally, we are not duty-bound to analyze again
and weigh the evidence introduced in and considered by the tribunals below.[10] When
supported by substantial evidence, the findings of fact of the CA are conclusive and binding
on the parties and are not reviewable by this Court, unless the case falls under any of the
following recognized exceptions:

(1) When the conclusion is a finding grounded entirely on speculation, surmises and
conjectures;

(2) When the inference made is manifestly mistaken, absurd or impossible;

(3) Where there is a grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When the findings 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 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 facts set forth in the petition as well as in the petitioners' main and reply
briefs are not disputed by the respondents; and

(10) When the findings of fact of the Court of Appeals are premised on the supposed
[11]
absence of evidence and contradicted by the evidence on record.

We note, however, that the findings of fact of the RTC are contrary to those of the CA. Thus,
our review of such findings is warranted.

On the merits of the case, we find that the instant Petition is bereft of merit.

A partnership exists when two or more persons agree to place their money, effects, labor,
and skill in lawful commerce or business, with the understanding that there shall be / a
proportionate sharing of the profits and losses among them. A contract of partnership is
defined by the Civil Code as one where 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.[12]

Undoubtedly, the best evidence would have been the contract of partnership or the articles
of partnership. Unfortunately, there is none in this case, because the alleged partnership was
never formally organized. Nonetheless, we are asked to determine who between Jose and
Elfledo was the "partner" in the trucking business.

A careful review of the records persuades us to affirm the CA decision. The evidence
presented by petitioners falls short of the quantum of proof required to establish that: (1)
Jose was the partner and not Elfledo; and (2) all the properties acquired by Elfledo and
respondent form part of the estate of Jose, having been derived from the alleged
partnership.

Petitioners heavily rely on Jimmy's testimony. But that testimony is just one piece of
evidence against respondent. It must be considered and weighed along with petitioners'
other evidence vis-à-vis respondent's contrary evidence. In civil cases, the party having the
burden of proof must establish his case by a preponderance of evidence. "Preponderance of
evidence" is the weight, credit, and value of the aggregate evidence on either side and is
usually considered synonymous with the term "greater weight of the evidence" or "greater
weight of the credible evidence." "Preponderance of evidence" is a phrase that, in the last
analysis, means probability of the truth. It is evidence that is more convincing to the court as
worthy of belief than that which is offered in opposition thereto.[13] Rule 133, Section 1 of
the Rules of Court provides the guidelines in determining preponderance of evidence, thus:

SECTION I. Preponderance of evidence, how determined. In civil cases, the party

having burden of proof must establish his case by a preponderance of evidence. In
determining where the preponderance or superior weight of evidence on the issues
involved lies, the court may consider all the facts and circumstances of the case, the
witnesses' manner of testifying, their intelligence, their means and opportunity of
knowing the facts to which they are testifying, the nature of the facts to which they
testify, the probability or improbability of their testimony, their interest or want of
interest, and also their personal credibility so far as the same may legitimately appear
upon the trial. The court may also consider the number of witnesses, though the
preponderance is not necessarily with the greater number.

At this juncture, our ruling in Heirs of Tan Eng Kee v. Court of Appeals[14] is enlightening.
/
Therein, we cited Article 1769 of the Civil Code, which provides:

Art. 1769. In determining whether a partnership exists, these rules shall apply:

(1) Except as provided by Article 1825, persons who are not partners as to each other
are not partners as to third persons;

(2) Co-ownership or co-possession does not of itself establish a partnership, whether

such co-owners or co-possessors do or do not share any profits made by the use of the
property;

(3) The sharing of gross returns does not of itself establish a partnership, whether or
not the persons sharing them have a joint or common right or interest in any property
from which the returns are derived;

(4) The receipt by a person of a share of the profits of a business is a prima facie
evidence that he is a partner in the business, but no such inference shall be drawn if
such profits were received in payment:
(a) As a debt by installments or otherwise;
(b) As wages of an employee or rent to a landlord;
(c) As an annuity to a widow or representative of a deceased partner;
(d) As interest on a loan, though the amount of payment vary with the profits of
the business;
(e) As the consideration for the sale of a goodwill of a business or other property
by installments or otherwise.

Applying the legal provision to the facts of this case, the following circumstances tend to
prove that Elfledo was himself the partner of Jimmy and Norberto: 1) Cresencia testified
that Jose gave Elfledo P50,000.00, as share in the partnership, on a date that coincided with
the payment of the initial capital in the partnership;[15] (2) Elfledo ran the affairs of the
partnership, wielding absolute control, power and authority, without any intervention or
opposition whatsoever from any of petitioners herein;[16] (3) all of the properties,
particularly the nine trucks of the partnership, were registered in the name of Elfledo; (4)
Jimmy testified that Elfledo did not receive wages or salaries from the partnership,
indicating that what he actually received were shares of the profits of the business;[17] and
(5) none of the petitioners, as heirs of Jose, the alleged partner, demanded periodic
accounting from Elfledo during his lifetime. As repeatedly stressed in Heirs of Tan Eng Kee,
[18] a demand for periodic accounting is evidence of a partnership.
/
Furthermore, petitioners failed to adduce any evidence to show that the real and personal
properties acquired and registered in the names of Elfledo and respondent formed part of
the estate of Jose, having been derived from Jose's alleged partnership with Jimmy and
Norberto. They failed to refute respondent's claim that Elfledo and respondent engaged in
other businesses. Edison even admitted that Elfledo also sold Interwood lumber as a
sideline.[19] Petitioners could not offer any credible evidence other than their bare
assertions. Thus, we apply the basic rule of evidence that between documentary and oral
evidence, the former carries more weight.[20]

Finally, we agree with the judicious findings of the CA, to wit:

The above testimonies prove that Elfledo was not just a hired help but one of the
partners in the trucking business, active and visible in the running of its affairs from
day one until this ceased operations upon his demise. The extent of his control,
administration and management of the partnership and its business, the fact that its
properties were placed in his name, and that he was not paid salary or other
compensation by the partners, are indicative of the fact that Elfledo was a partner and a
controlling one at that. It is apparent that the other partners only contributed in the
initial capital but had no say thereafter on how the business was ran. Evidently it was
through Elfredo's efforts and hard work that the partnership was able to acquire more
trucks and otherwise prosper. Even the appellant participated in the affairs of the
partnership by acting as the bookkeeper sans salary.

It is notable too that Jose Lim died when the partnership was barely a year old, and the
partnership and its business not only continued but also flourished. If it were true that
it was Jose Lim and not Elfledo who was the partner, then upon his death the
partnership should have

been dissolved and its assets liquidated. On the contrary, these were not done but
instead its operation continued under the helm of Elfledo and without any participation
from the heirs of Jose Lim.

Whatever properties appellant and her husband had acquired, this was through their
own concerted efforts and hard work. Elfledo did not limit himself to the business of
their partnership but engaged in other lines of businesses as well.

In sum, we find no cogent reason to disturb the findings and the ruling of the CA as they are
amply supported by the law and by the evidence on record.
/
WHEREFORE, the instant Petition is DENIED. The assailed Court of Appeals Decision
dated June 29, 2005 is AFFIRMED. Costs against petitioners.

SO ORDERED.

Corona, (Chairperson), Velasco, Jr., Del Castillo,* and Mendoza, JJ., concur.

* Additional member in lieu of Associate Justice Diosdado M. Peralta per Special Order No.
824 dated February 12, 2010.

[1] Rollo, pp. 9-31.

[2] Particularly docketed as CA-G.R. CV No. 83331; penned by Associate Justice Roberto A.
Barrios (deceased), with Associate Justices Amelita G. Tolentino and Vicente S.E. Veloso,
concurring; id. at 57-69.

[3] Particularly docketed as Civil Case No. 97-60; rollo, pp. 49-55.

[4] Records, pp. 1-9.

[5] CA rollo, pp. 116-128.

[6] Id. at 157-158.

[7] Petitioners' Memorandum; rollo, pp. 271-295, at 285.

[8] Id.

[9] Respondent's Memorandum; id. at 204-234.

[10] Francisco Madrid and Edgardo Bernardo v. Spouses Bonifacio Mapoy and Felicidad
Martinez, G.R. No. 150887, August 14, 2009. (Citations omitted.)

[11] Ontimare, Jr. v. Elep, G.R. No. 159224, January 20, 2006, 479 SCRA 257, 265.

[12] Litonjua, Jr. v. Litonjua, Sr., G.R. Nos. 166299-300, December 13, 2005, 477 SCRA
576, 584.

[13] Perfecta Cavile, Jose de la Cruz and Rural Bank of Bayawan, Inc. v. Justina Litania-
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Hong, accompanied and joined by her husband, Leopoldo Hong and Genoveva Litania,
G.R. No. 179540, March 13, 2009, citing Go v. Court of Appeals, 403 Phil. 883, 890-891
(2001).

[14] 396 Phil. 68 (2000).

[15] TSN, June 8, 1999, pp. 4, 8 and 9-10.

[16] TSN, May 2, 2000, p. 17.

[17] Id. at 15-16.

[18] Supra note 14, at 83, citing Estanislao, Jr. v. Court of Appeals, 160 SCRA 830, 837
(1988).

[19] TSN, September 15, 1999, p. 8.

[20] SPO2 Yap v. Judge Inopiquez, Jr., 451 Phil. 182, 192 (2003), citing Romago Electric
Co., Inc. v. Court of Appeals, 333 SCRA 291, 302 (2000), further citing Ereñeta v. Bezore,
54 SCRA 13 (1973) and Soriano v. Compañia General de Tabacos de Filipinas, 18 SCRA 999
(1966); and Government Service Insurance System v. Court of Appeals, 222 SCRA 685, 696
(1993), further citing Marvel Building Corporation, et al. v. David, 94 Phil. 376 (1954).