MARIANO P. PASCUAL and RENATO P.

DRAGON, petitioners,
vs.
THE COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX
APPEALS, respondents

G.R. No. 78133 October 18, 1988

FACTS:

On June 22, 1965, petitioners bought two (2) parcels of land from Santiago
Bernardino, et al. and on May 28, 1966, they bought another three (3) parcels of land
from Juan Roque. The first two parcels of land were sold by petitioners in 1968 to
Marenir Development Corporation, while the three parcels of land were sold by
petitioners to Erlinda Reyes and Maria Samson on March 19,1970. Petitioner realized a
net profit in the sale made in 1968 in the amount of P165, 224.70, while they realized
a net profit of P60,000 in the sale made in 1970. The corresponding capital gains
taxes were paid by petitioners in 1973 and 1974 .

Respondent Commissioner informed petitioners that in the years 1968 and 1970,
petitioners as co-owners in the real estate transactions formed an unregistered
partnership or joint venture taxable as a corporation under Section 20(b) and its
income was subject to the taxes prescribed under Section 24, both of the National
Internal Revenue Code; that the unregistered partnership was subject to corporate
income tax as distinguished from profits derived from the partnership by them which
is subject to individual income tax.

ISSUE:

Whether petitioners formed an unregistered partnership subject to corporate income

tax (partnership vs. co-ownership)

RULING:

Article 1769 of the new Civil Code lays down the rule for determining when a
transaction should be deemed a partnership or a co-ownership. Said article
paragraphs 2 and 3, provides:(2) Co-ownership or co-possession does not 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;
The sharing of returns does not in itself establish a partnership whether or not the
persons sharing therein have a joint or common right or interest in the property.
There must be a clear intent to form a partnership, the existence of a juridical
personality different from the individual partners, and the freedom of each party to
transfer or assign the whole property.

In the present case, there is clear evidence of co-ownership between the petitioners.
There is no adequate basis to support the proposition that they thereby formed an
unregistered partnership. The two isolated transactions whereby they purchased
properties and sold the same a few years thereafter did not thereby make them
partners. They shared in the gross profits as co- owners and paid their capital gains
taxes on their net profits and availed of the tax amnesty thereby. Under the
circumstances, they cannot be considered to have formed an unregistered partnership
which is thereby liable for corporate income tax, as the respondent commissioner
proposes.

And even assuming for the sake of argument that such unregistered partnership
appears to have been formed, since there is no such existing unregistered partnership
with a distinct personality nor with assets that can be held liable for said deficiency
corporate income tax, then petitioners can be held individually liable as partners for
this unpaid obligation of the partnership.
MUNICIPALITY OF PILILLA, RIZAL, petitioner,
vs.
HON. COURT OF APPEALS, HON. ARTURO A. MARAVE, as Presiding Judge, Regional
Trial Court, Branch 78, Morong, Rizal, and PHILIPPINE PETROLEUM
CORPORATION, respondents.

G.R. No. 105909 June 28, 1994

FACTS:

Two parcels of land covering a fishpond equally owned by PrimitivaLejano and

LorenzaAraniego. The one half undivided portion owned by Araniego was later
purchased by plaintiff from his father TeofiloAbejo, the only heir of the original owner
(husband of Araniego). Prior to this sale, the whole fishpond was leased by the heirs
of Primitiva Lejano with the knowledge and consent of Teofilo A. Abejo in favor of De
Guia. De Guia continues to possess the entire fishpond and derived income therein
despite the expiration of the lease contract and several demands to vacate by
TeofiloAbejo and by his successor-in-interest, Jose Abejo.Abejo filed a complaint for
recovery of possession with damages against De Guia. However, Abejo failed to
present evidence of the judicial or extrajudicial partition of the fishpond.

ISSUE:

Whether a co-owner can file ejectment case against a co-owner?Whether Abejo was
entitled to rent?

RULING:

Under Article 484, there is co-ownership whenever the ownership of an undivided

thing or right belongs to different persons. A co-owner of an undivided parcel of land
is an owner of the whole, and over the whole he exercises the right of dominion, but
he is at the same time the owner of a portion which is truly abstract. Article 487 also
provides that anyone of the co-owners may bring an action for ejectment. This
article covers all kinds of actions for the recovery of possession. Any co-owner may
file an action under Article 487 not only against a third person, but also against
another co-owner who takes exclusive possession and asserts exclusive ownership of
the property. However, the only purpose of the action is to obtain recognition of the
co-ownership. The plaintiff cannot seek exclusion of the defendant from the property
because as a co-owner he has a right of possession.
If one co-owner alone occupies the property without opposition from the other co-
owners, and there is no lease agreement, the other co-owners cannot demand the
payment of rent. Conversely, if there is an agreement to lease the house, the co-
owners can demand rent from the co-owner who dwells in the house.
The Lejano Heirs and TeofiloAbejo agreed to lease the entire FISHPOND to DE
GUIA. After DE GUIAs lease expired in 1979, he could no longer use the entire
FISHPOND without paying rent.
REYNALDO BALOLOY and ADELINA BALOLOY-HIJE, petitioners,
vs.
ALFREDO HULAR, respondent.

G.R. No. 157767 September 9, 2004

FACTS:

Spouses Lino and Victoriana Estopin were the original owners of a parcel of land
located in Barangay Biriran, Juban, Sorsogon ( Lot No. 3347 ) of the Juban Cadastre. A
major portion of the property was agricultural, while the rest was residential.
November 11 and 25, 1961: When Lino Estopin died intestate, his widow, Victoriana
Lagata, executed a Deed of Absolute Sale on over the agricultural portion of Lot No.
3347, ( 15,906 sqm) and the residential portion of the property (287 sqm) to Astrologo
Hular. In 1961 or thereabouts: Iluminado asked Hulars permission to construct a house
on a portion of Lot No. 3347 near the road, and the latter agreed.
Iluminado Baloloy in 1945 acquired a coconut land (north of the residential portion of
Lot 3347 Lot No. 3353 (9302 sqm) and registered the same. Iluminado constructed his
house on a portion of Lot No. 3353. He and his family, including his children, forthwith
resided in said house.
In 1979, respondent Hular had his house constructed near the trail (road) on Lot No.
3347, which, however, occupied a big portion of Lot No. 3353.
Iluminado died intestate on November 29, 1985. His widow and their children
continued residing in the property, while petitioner Reynaldo Baloloy, one of
Iluminados children, later constructed his house near that of his deceased father.
When Astrologo died, he was survived by his children, Jose, Romeo, Anacleto, Elena,
Leo, Teresita, and the respondent, among others, who continued to reside in their
house. Sometime in l991 the respondent had Lot No. 3353 surveyed and discovered
that the residential area deeded by Lagata to Astrologo Hular had an area of 1,405
square meters, instead of 287 square meters only.
Respondent Alfredo Hular filed a complaint for quieting of title of real property
against the children and heirs of Iluminado Baloloy, namely, Anacorita, Antonio, and
petitioners Reynaldo and Adelina, all surnamed Baloloy. He prayed among others that
he be declared the absolute owner of the property in question.

ISSUE:
 Whether all the indispensable parties had been impleaded by the respondent in the
trial court

RULING:

No. Respondent adduced evidence that when his parents died intestate, they were
survived by their children, the respondent and his siblings Elena, Jose, Romeo,
Anacleto, Leo, and Teresita.
Article 1078 of the Civil Code provides that where there are two or more heirs, the
whole estate of the decedent is, before partition, owned in common by such heirs,
subject to the payment of the debts of the deceased. Under Article 487 of the New
Civil Code, any of the co-owners may bring an action in ejectment. This article covers
all kinds of actions for the recovery of possession, including an accion publiciana and
a reinvidicatory action. If the action is for the benefit of the plaintiff alone who
claims to be the sole owner and entitled to the possession thereof, the action will not
prosper unless he impleads the other co-owners who are indispensable parties.
In this case, the respondent alone filed the complaint, claiming sole ownership over
the subject property and praying that he be declared the sole owner thereof. There is
no proof that the other co- owners had waived their rights over the subject property
or conveyed the same to the respondent or such co-owners were aware of the case in
the trial court.