G.R. No. 137378 - Philippine Aluminum Wheels, Inc. vs. FASGI Enterprises, Inc.

Lim Tong Lim, Antonio Chua and Peter Yao agreed to engage in a commercial fishing business under the name “Ocean Quest Fishing Corporation,” although no corporation was ever validly formed.
To finance the venture, they borrowed ₱3.25 million from Jesus Lim (petitioner’s brother), using two fishing vessels (F/B Lourdes and F/B Nelson) as security; petitioner’s name appeared on the titles at lender’s insistence.
Subsequent loans and vessel refurbishing expenses were likewise covered by credit from Jesus Lim, and additional vessels (F/B Lady Anne Mel and F/B Tracy) were placed in petitioner’s name as security.

On February 7, 1990, Chua and Yao (in the name of the nonexistent “Ocean Quest Fishing Corporation”) ordered fishing nets totaling ₱532,045 and floats totaling ₱68,000 from Philippine Fishing Gear Industries, Inc.
They failed to pay. On September 20, 1990, respondent secured a writ of preliminary attachment over nets aboard F/B Lourdes, which was enforced by the RTC sheriff.
The trial court later ordered the nets sold at public auction; respondent was the lone bidder at ₱900,000, which sum was deposited with the court as substitute security.

RTC (Malabon, Branch 72) ruled that Lim, Chua and Yao were general partners under Article 1767, jointly liable for the purchase price, interest, attorney’s fees, rental and costs, but ordered petitioner to reimburse himself from the ₱900,000 deposit.
On appeal (CA-GR CV 41477), the Court of Appeals affirmed the RTC, holding that a verbal partnership existed, profits and losses were to be shared equally (as evidenced by a Compromise Agreement in Civil Case No. 1492-MN), and that all three were liable for partnership debts.
Petitioner sought certiorari in the Supreme Court to challenge (a) the existence of partnership, (b) his liability for the nets and floats, and (c) the propriety of the attachment.

Whether the Court of Appeals erred in finding a partnership among Lim, Chua and Yao based primarily on a Compromise Agreement executed in a separate case.
Whether Lim may be held liable for the nets and floats purchased by Chua and Yao when he did not directly transact with respondent and claimed only to be a lessor of the fishing vessels.
Whether the issuance and enforcement of the writ of preliminary attachment against the nets was improper.