Facts:

This case involves Leopoldo Alicbusan as the petitioner and the respondents consisting of the Court of Appeals, Cesar Cordero, and Baby's Canteen. The controversy began with a complaint filed by Cordero and Baby's Canteen against Alicbusan and Philippine Service Enterprises, Inc. before the Regional Trial Court in Pasay City. Cordero and Alicbusan had previously formed a partnership for operating Baby's Canteen at the Philtranco terminal in Pasay City, initially established for a fixed term from July 1981 to July 1984. However, both parties continued their partnership operations beyond the expiration without a formal amendment.

On May 11, 1990, Cordero filed Civil Case No. 7322 for collection, alleging that Philtranco had withheld remittances totaling P209,497.36 due to the Canteen, instigated by Alicbusan's actions as President of Philtranco. The alleged withholding was related to an agreement where employees bought items on credit, with deductions from their sa

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Facts:

Partnership Formation and Operation

• Leopoldo Alicbusan and Cesar Cordero initially entered into a partnership to operate Baby's Canteen located at the Philtranco terminal in Pasay City.
• Under the terms of the original agreement, Cordero was designated as the Managing Partner while Alicbusan was responsible for accounting, records keeping, and other comptrollership functions.
• The partnership was originally established for a fixed term (July 1981 to July 1984) but continued thereafter under the original agreement despite the expiration of the fixed period.

Dispute Arising from Business and Financial Transactions

• A complaint was filed by private respondents – Cesar Cordero and Baby's Canteen – against petitioner Alicbusan and Philippine Service Enterprises, Inc.
• The cause of action emerged from an arrangement whereby employees of Philtranco bought goods from Baby’s Canteen on credit, with payments deducted from their salaries and remitted by Philtranco.
• It was alleged by Cordero that the remittances for the salary deductions (covering February to mid-May 1990) were withheld by Philtranco upon the instigation of petitioner Alicbusan.
• Additional contention arose regarding the alleged termination of a lease for a stall (Stall No. 6) exclusively affecting plaintiff’s wife, which was argued to be an act of harassment and bad faith.

The Deed of Sale and Alleged Transfer of Rights

• On April 5, 1989, petitioner Alicbusan executed a Deed of Sale and Transfer of Right transferring all his rights and interests in Baby’s Canteen to Cordero for a total sum of ₱250,000.00.
• The deed set out specific terms:
• A downpayment of ₱50,000.00 to be paid upon signing.
• The balance payable in twenty monthly installments of ₱10,000.00 each, with postdated checks scheduled accordingly.
• It is contended by Alicbusan that subsequent modifications were agreed, wherein the initial downpayment was foregone in favor of accelerated installment payments totaling ₱90,500.00 between May and November 1989.
• Evidence, however, showed that the conditions stipulated in the deed were never met (e.g., non-payment of the ₱50,000.00 downpayment and installments not following the agreed amount or form), suggesting that the deed was simulated.

Trial Court and Appellate Proceedings

• The Regional Trial Court (RTC) of Pasay City ruled in favor of Cordero and Baby’s Canteen on February 7, 1991, affirming:
• The continuation of the partnership between Cordero and Alicbusan.
• Specific monetary awards, including:
• Payment by Philtranco for withheld remittances (₱290,912.31).

ii. Moral damages against both Philtranco and Alicbusan (₱30,000.00 each). iii. Joint and several liability for attorney’s fees (₱50,000.00). iv. Counterclaim adjustments regarding outstanding rentals.

Appellate Ruling and Grounds for Review

• The Court of Appeals, on October 29, 1993, affirmed the trial court’s decision:
• It found that the deed of sale was fictitious and simulated, as its stipulated conditions (downpayment and equal monthly installments via postdated checks) were not met.
• It confirmed that petitioner Alicbusan continued to function in his role as comptroller of the partnership, thereby evidencing that the alleged sale did not extinguish the partnership.
• The court also upheld the award of moral damages and attorney’s fees (although the latter was reduced by half), finding that petitioner’s bad faith actions, specifically the withholding of remittances, justified such awards.
• Petition for reconsideration was denied on February 4, 1994, and petitioner Alicbusan subsequently elevated the matter on certiorari, reiterating the issues raised prior to the Court of Appeals.

Issue:

Existence and Termination of the Partnership

• Whether a bona fide transfer or sale of partnership rights occurred, or whether the deed of sale was merely simulated.
• Whether the partnership between petitioner Alicbusan and respondent Cordero continued after the purported sale.

Compliance with the Stipulated Terms in the Deed of Sale

• Whether the conditions under the deed (downpayment and installment payments) were followed or were breached, thus rendering the deed invalid.
• The proper determination of whether the alleged modification to the payment schedule affected the nature of the transaction.

Burden of Proof and Evidentiary Presumptions

• Whether appellate courts erred in applying the legal presumptions (fair and regular business transactions, adherence to the ordinary course of business, and sufficient consideration) in assessing the validity of the deed.
• Whether the burden of proof was correctly allocated or improperly shifted against petitioner Alicbusan.

Liability for Actions and Award of Damages

• Whether petitioner's actions in withholding remittances were in gross and evident bad faith, justifying the moral damages awarded.
• The appropriateness of the award for attorney’s fees given the circumstances of the case and the conduct of the parties.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)