THIRD DIVISION[G.R. No.135813. October 25, 2001.]FERNANDO SANTOS,petitioner,vs. Spouses ARSENIO and NIEVES REYES,respondents.Pacifico M. Lontok and Arcangelita M. Romilla-Lontokfor petitioner.Benito P. Fabiefor private respondents.SYNOPSISOn June 13, 1986, petitioner Fernando Santos, respondent Nieves Reyes and Meliton Zabat launched a lending business venture. It was agreed that the petitioner as financier will receive 70% of the profit while Nieves and Zabat as industrial partner will receive 15% each. Later, it was discovered that Zabat engaged in the same lending business in competition with their partnership, thus, he was expelled from the partnership. Arsenio, Nieves' husband, replaced Zabat. On June 5, 1987, petitioner filed a complaint for recovery of sum of money claiming that Spouses Arsenio and Nieves Reyes in their capacities as employees misappropriated funds intended for Cesar Gragera. In their answer, spouses Reyes asserted that they were partners and not mere employees of petitioner. The complaint was filed to preempt and prevent them from claiming their rightful share to the profits of the partnership. After trial, the courta quoruled in favor of spouses Reyes. It further ruled that petitioner failed to prove that he had entrusted any money to Nieves. Thus, it granted spouses Reyes' counterclaim for their share in the partnership and for damages. On appeal, the decision of the trial court was affirmed by the Court of Appeals (CA). Hence, this petition for review.The Court ruled that by the contract of partnership, 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. The "Articles of Agreement" stipulated that the signatories shall share the profits of the business in a 70-15-15 manner, with petitioner getting the lion's share. This stipulation clearly proved the establishment of a partnership. However, after a close examination of respondent's exhibits, the Court found a reason to disagree with the CA. Exhibit "10-I" showed that the partnership earned a "total income" of P20,429,520 for the period June 13, 1986 until April 19, 1987. It did not consider the expenses sustained by the partnership. The point is that all expenses incurred by the money-lending enterprise of the parties must first be deducted from the "total income" in order to arrive at the "net profit." Contrary to the rulings of both the trial and the appellate courts, respondents' exhibits did not reflect the complete financial condition of the money-lending business. The lower courts obviously labored over a mistaken notion that Exhibit "10-I-1" represented the "net profits" earned by the partnership.SYLLABUS1.CIVIL LAW; OBLIGATIONS AND CONTRACTS; PARTNERSHIP; DEFINED. By the contract of partnership, 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.2.ID.; ID.; ID.; ESTABLISHED IN CASE AT BAR. The "Articles of Agreement" stipulated that the signatories shall share the profits of the business in a 70-15-15 manner, with petitioner getting the lion's share. This stipulation clearly proved the establishment of a partnership. . . . Nieves was not merely petitioner's employee. She discharged her bookkeeping duties in accordance with paragraphs 2 and 3 of the Agreement . . . . The "Second Party" named in the Agreement was none other than Nieves Reyes. On the other hand, Arsenio's duties as credit investigator are subsumed under the phrase "screening of prospective borrowers." Because of this Agreement and the disbursement of monthly "allowances" and "profit shares" or "dividends" (Exh. "6") to Arsenio, we uphold the factual finding of both courts that he replaced Zabat in the partnership. Indeed, the partnership was established to engage in a money-lending business, despite the fact that it was formalized only after the Memorandum of Agreement had been signed by petitioner and Gragera. Contrary to petitioner's contention, there is no evidence to show that a different business venture is referred to in this Agreement, which was executed on August 6, 1986, or about a month after the Memorandum had been signed by petitioner and Gragera on July 14, 1986.3.REMEDIAL LAW; EVIDENCE; CREDIBILITY OF WITNESSES; FACTUAL FINDINGS OF THE COURT OF APPEALS AFFIRMING THOSE OF THE TRIAL COURT ARE BINDING AND CONCLUSIVE ON THE SUPREME COURT. Petitioner has utterly failed to demonstrate why a review of these factual findings is warranted. Well-entrenched is the basic rule that factual findings of the Court of Appeals affirming those of the trial court are binding and conclusive on the Supreme Court. Although there are exceptions to this rule, petitioner has not satisfactorily shown that any of them is applicable to this issue.4.ID.; ID.; ID.; ID.; THE RULE MAY BE RELAXED WHEN THE ISSUE INVOLVES THE EVALUATION OF EXHIBITS OR DOCUMENTS THAT ARE ATTACHED TO THE CASE RECORDS. The trial court has the advantage of observing the witnesses while they are testifying, an opportunity not available to appellate courts. Thus, its assessment of the credibility of witnesses and their testimonies are accorded great weight, even finality, when supported by substantial evidence; more so when such assessment is affirmed by the CA. But when the issue involves the evaluation of exhibits or documents that are attached to the case records, as in the third issue, the rule may be relaxed. Under that situation, this Court has a similar opportunity to inspect, examine and evaluate those records, independently of the lower courts. Hence, we deem the award of the partnership share, as computed by the trial court and adopted by the CA, to be incomplete and not binding on this Court.5.CIVIL LAW; OBLIGATIONS AND CONTRACTS; PARTNERSHIP; TOTAL INCOME; ELUCIDATED. Exhibit "10-I" shows that the partnership earned a "total income" of P20,429,520 for the period June 13, 1986 until April 19, 1987. This entry is derived from the sum of the amounts under the following column headings: "2-Day Advance Collection," "Service Fee," "Notarial Fee," "Application Fee," "Net Interest Income" and "Interest Income on Investment." Such entries represent the collections of the money-lending business or its gross income. The "total income" shown on Exhibit "10-I" did not consider the expenses sustained by the partnership. For instance, it did not factor in the "gross loan releases" representing the money loaned to clients. Since the business is money-lending, such releases are comparable with the inventory or supplies in other business enterprises.6.ID.; ID.; ID.; SHARE OF EACH PARTNER SHOULD BE BASED ON THE NET PROFIT. Noticeably missing from the computation of the "total income" is the deduction of the weekly allowance disbursed to respondents. Exhibits "I"et seq.and "J"et seq.show that Arsenio received allowances from July 19, 1986 to March 27, 1987 in the aggregate amount of P25,500; and Nieves, from July 12, 1986 to March 27, 1987 in the total amount of P25,600. These allowances are different from the profit already received by Arsenio. They represent expenses that should have been deducted from the business profits. The point is that all expenses incurred by the money-lending enterprise of the parties must first be deducted from the "total income" in order to arrive at the "net profit" of the partnership. The share of each one of them should be based on this "net profit" and not from the "gross income" or "total income" reflected in Exhibit "10-I," which the two courts invariably referred to as "cash flow" sheets.7.ID.; ID.; ID.; ID.; INDUSTRIAL PARTNER'S SHARE MUST COME FROM THE NET PROFITS; INDUSTRIAL PARTNER DOES NOT SHARE IN THE LOSSES IF LATTER EXCEEDS THE INCOME. For the purpose of determining the profit that should go to an industrial partner (who shares in the profits but is not liable for the losses), the gross income from all the transactions carried on by the firm must be added together, and from this sum must be subtracted the expenses or the losses sustained in the business. Only in the difference representing the net profits does the industrial partner share. But if, on the contrary, the losses exceed the income, the industrial partner does not share in the losses.DEcTCaD E C I S I O NPANGANIBAN,Jp:As a general rule, the factual findings of the Court of Appeals affirming those of the trial court are binding on the Supreme Court. However, there are several exceptions to this principle. In the present case, we find occasion to apply both the rule and one of the exceptions.The CaseBefore us is a Petition for Review onCertiorariassailing the November 28, 1997 Decision,1as well as the August 17, 1998 and the October 9, 1998 Resolutions,2issued by the Court of Appeals (CA) in CA-GR CV No. 34742. The Assailed Decision disposed as follows:"WHEREFORE, the decision appealed from is AFFIRMED save as for the counterclaim which is hereby DISMISSED. Costs against [petitioner]."3Resolving respondent's Motion for Reconsideration, the August 17, 1998 Resolution ruled as follows:"WHEREFORE, [respondents'] motion for reconsideration is GRANTED. Accordingly, the court's decision dated November 28, 1997 is hereby MODIFIED in that the decision appealed from is AFFIRMEDin toto, with costs against [petitioner]."4The October 9, 1998 Resolution denied "for lack of merit" petitioner's Motion for Reconsideration of the August 17, 1998 Resolution.5The FactsThe events that led to this case are summarized by the CA as follows:"Sometime in June, 1986, [Petitioner] Fernando Santos and [Respondent] Nieves Reyes were introduced to each other by one Meliton Zabat regarding a lending business venture proposed by Nieves. It was verbally agreed that [petitioner would] act as financier while [Nieves] and Zabat [would] take charge of solicitation of members and collection of loan payments. The venture was launched on June 13, 1986, with the understanding that [petitioner] would receive 70% of the profits while . . . Nieves and Zabat would earn 15% each."In July, 1986, . . . Nieves introduced Cesar Gragera to [petitioner]. Gragera, as chairman of the Monte Maria Development Corporation6(Monte Maria, for brevity), sought short-term loans for members of the corporation. [Petitioner] and Gragera executed an agreement providing funds for Monte Maria's members. Under the agreement, Monte Maria, represented by Gragera, was entitled to P1.31 commission per thousand paid daily to [petitioner] (Exh. 'A'). . . . Nieves kept the books as representative of [petitioner] while [Respondent] Arsenio, husband of Nieves, acted as credit investigator."On August 6, 1986, [petitioner], . . . [Nieves] and Zabat executed the 'Article of Agreement' which formalized their earlier verbal arrangement."[Petitioner] and [Nieves] later discovered that their partner Zabat engaged in the same lending business in competition with their partnership[.] Zabat was thereby expelled from the partnership. The operations with Monte Maria continued."On June 5, 1987, [petitioner] filed a complaint for recovery of sum of money and damages. [Petitioner] charged [respondents], allegedly in their capacities as employees of [petitioner], with having misappropriated funds intended for Gragera for the period July 8, 1986 up to March 31, 1987. Upon Gragera's complaint that his commissions were inadequately remitted, [petitioner] entrusted P200,000.00 to . . . Nieves to be given to Gragera. . . . Nieves allegedly failed to account for the amount. [Petitioner] asserted that after examination of the records, he found that of the total amount of P4,623,201.90 entrusted to [respondents], only P3,068,133.20 was remitted to Gragera, thereby leaving the balance of P1,555,065.70 unaccounted for."In their answer, [respondents] asserted that they were partners and not mere employees of [petitioner]. The complaint, they alleged, was filed to preempt and prevent them from claiming their rightful share to the profits of the partnership.". . . Arsenio alleged that he was enticed by [petitioner] to take the place of Zabat after [petitioner] learned of Zabat's activities. Arsenio resigned from his job at the Asian Development Bank to join the partnership."For her part, . . . Nieves claimed that she participated in the business as a partner, as the lending activity with Monte Maria originated from her initiative. Except for the limited period of July 8, 1986 through August 20, 1986, she did not handle sums intended for Gragera. Collections were turned over to Gragera because he guaranteed 100% payment of all sums loaned by Monte Maria. Entries she made on worksheets were based on this assumptive 100% collection of all loans. The loan releases were made less Gragera's agreed commission. Because of this arrangement, she neither received payments from borrowers nor remitted any amount to Gragera. Her job was merely to make worksheets (Exhs. '15' to '15-DDDDDDDDDD') to convey to [petitioner] how much he would earn if all the sums guaranteed by Gragera were collected."[Petitioner] on the other hand insisted that [respondents] were his mere employees and not partners with respect to the agreement with Gragera. He claimed that after he discovered Zabat's activities, he ceased infusing funds, thereby causing the extinguishment of the partnership. The agreement with Gragera was a distinct partnership [from] that of [respondent] and Zabat. [Petitioner] asserted that [respondents] were hired as salaried employees with respect to the partnership between [petitioner] and Gragera."[Petitioner] further asserted that in Nieves' capacity as bookkeeper, she received all payments from which Nieves deducted Gragera's commission. The commission would then be remitted to Gragera. She likewise determined loan releases."During the pre-trial, the parties narrowed the issues to the following points: whether [respondents] were employees or partners of [petitioner], whether [petitioner] entrusted money to [respondents] for delivery to Gragera, whether the P1,555,068.70 claimed under the complaint was actually remitted to Gragera and whether [respondents] were entitled to their counterclaim for share in the profits."7Ruling of the Trial CourtIn its August 13, 1991 Decision, the trial court held that respondents were partners, not mere employees, of petitioner. It further ruled that Gragera was only a commission agent of petitioner, not his partner. Petitioner moreover failed to prove that he had entrusted any money to Nieves. Thus, respondents' counterclaim for their share in the partnership and for damages was granted. The trial court disposed as follows:"39.WHEREFORE, the Court hereby renders judgment as follows:39.1.THE SECOND AMENDED COMPLAINT dated July 26, 1989 is DISMISSED.39.2.The [Petitioner] FERNANDO J. SANTOS is ordered to pay the [Respondent] NIEVES S. REYES, the following:39.2.1P3,064,428.00The 15 percent share of the[respondent] NIEVES S. REYESin the profits of her joint venturewith the [petitioner].39.2.2.Six (6) percent ofAs damages from August 3,P3,064,428.001987 until the P3,064,428.00is fully paid.39.2.3.P50,000.00As moral damages39.2.4.P10,000.00As exemplary damages39.3.The [petitioner] FERNANDO J. SANTOS is ordered to pay the [respondent] ARSENIO REYES, the following:39.3.1.P2,899,739.50The balance of the 15 percentshare of the [respondent]ARSENIO REYES in the profitsof his joint venture with the[petitioner].39.3.2.Six (6) percent ofAs damages from August 3,P2,899,739.501987 until the P2,899,739.50 isfully paid.39.3.3.P25,000.00As moral damages39.3.4.P10,000.00As exemplary damages39.4.The [petitioner] FERNANDO J. SANTOS is ordered to pay the [respondents]:39.4.1.P50,000.00As attorney's fees; and39.4.2The cost of the suit."8Ruling of the Court of AppealsOn appeal, the Decision of the trial court was upheld, and the counterclaim of respondents was dismissed. Upon the latter's Motion for Reconsideration, however, the trial court's Decision was reinstatedin toto. Subsequently, petitioner's own Motion for Reconsideration was denied in the CA Resolution of October 9, 1998.The CA ruled that the following circumstances indicated the existence of a partnership among the parties: (1) it was Nieves who broached to petitioner the idea of starting a money-lending business and introduced him to Gragera; (2) Arsenio received "dividends" or "profit-shares" covering the period July 15 to August 7, 1986 (Exh. "6"); and (3) the partnership contract was executed after the Agreement with Gragera and petitioner and thus showed the parties' intention to consider it as a transaction of the partnership. In their common venture, petitioner invested capital while respondents contributed industry or services, with the intention of sharing in the profits of the business.The CA disbelieved petitioner's claim that Nieves had misappropriated a total of P200,000 which was supposed to be delivered to Gragera to cover unpaid commissions. It was his task to collect the amounts due, while hers was merely to prepare the daily cash flow reports (Exhs. "15-15DDDDDDDDDD") to keep track of his collections.Hence, this Petition.9IssuePetitioner asks this Court to rule on the following issues:10"Whether or not Respondent Court of Appeals acted with grave abuse of discretion tantamount to excess or lack of jurisdiction in:1.Holding that private respondents were partners/joint venturers and not employees of Santos in connection with the agreement between Santos and Monte Maria/Gragera;2.Affirming the findings of the trial court that the phrase 'Received by' on documents signed by Nieves Reyes signified receipt of copies of the documents and not of the sums shown thereon;3.Affirming that the signature of Nieves Reyes on Exhibit 'E' was a forgery;4.Finding that Exhibit 'H' [did] not establish receipt by Nieves Reyes of P200,000.00 for delivery to Gragera;5Affirming the dismissal of Santos' [Second] Amended Complaint;6.Affirming the decision of the trial court, upholding private respondents' counterclaim;7.Denying Santos' motion for reconsideration dated September 11, 1998."Succinctly put, the following were the issues raised by petitioner: (1) whether the parties' relationship was one of partnership or of employer-employee; (2) whether Nieves misappropriated the sums of money allegedly entrusted to her for delivery to Gragera as his commissions; and (3) whether respondents were entitled to the partnership profits as determined by the trial court.The Court's RulingThe Petition is partly meritorious.First Issue:Business RelationshipPetitioner maintains that he employed the services of respondent spouses in the money-lending venture with Gragera, with Nieves as bookkeeper and Arsenio as credit investigator. That Nieves introduced Gragera to Santos did not make her a partner. She was only a witness to the Agreement between the two. Separate from the partnership between petitioner and Gragera was that which existed among petitioner, Nieves and Zabat, a partnership that was dissolved when Zabat was expelled.On the other hand, both the CA and the trial court rejected petitioner's contentions and ruled that the business relationship was one of partnership. We quote from the CA Decision, as follows:"[Respondents] were industrial partners of [petitioner]. . . . Nieves herself provided the initiative in the lending activities with Monte Maria. In consonance with the agreement between appellant, Nieves and Zabat (later replaced by Arsenio), [respondents] contributed industry to the common fund with the intention of sharing in the profits of the partnership. [Respondents] provided services without which the partnership would not have [had] the wherewithal to carry on the purpose for which it was organized and as such [were] considered industrial partners (Evangelista v. Abad Santos, 51 SCRA 416 [1973])."While concededly, the partnership between [petitioner,] Nieves and Zabat was technically dissolved by the expulsion of Zabat therefrom, the remaining partners simply continued the business of the partnership without undergoing the procedure relative to dissolution. Instead, they invited Arsenio to participate as a partner in their operations. There was therefore, no intent to dissolve the earlier partnership. The partnership between [petitioner,] Nieves and Arsenio simply took over and continued the business of the former partnership with Zabat, one of the incidents of which was the lending operations with Monte Maria.xxx xxx xxx"Gragera and [petitioner] were not partners. The money-lending activities undertaken with Monte Maria was done in pursuit of the business for which the partnership between [petitioner], Nieves and Zabat (later Arsenio) was organized. Gragera who represented Monte Maria was merely paid commissions in exchange for the collection of loans. The commissions were fixed on gross returns, regardless of the expenses incurred in the operation of the business. The sharing of gross returns does not in itself establish a partnership."11We agree with both courts on this point.By the contract of partnership, 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.12The "Articles of Agreement" stipulated that the signatories shall share the profits of the business in a 70-15-15 manner, with petitioner getting the lion's share.13This stipulation clearly proved the establishment of a partnership.We find no cogent reason to disagree with the lower courts that the partnership continued lending money to the members of the Monte Maria Community Development Group, Inc., which later on changed its business name to Private Association for Community Development, Inc. (PACDI). Nieves was not merely petitioner's employee. She discharged her bookkeeping duties in accordance with paragraphs 2 and 3 of the Agreement, which states as follows:"2.That the SECOND PARTY and THIRD PARTY shall handle the solicitation and screening of prospective borrowers, and shall . . . each be responsible in handling the collection of the loan payments of the borrowers that they each solicited."3.That the bookkeeping and daily balancing of account of the business operation shall be handled by the SECOND PARTY."14The "Second Party" named in the Agreement was none other than Nieves Reyes. On the other hand, Arsenio's duties as credit investigator are subsumed under the phrase "screening of prospective borrowers." Because of this Agreement and the disbursement of monthly "allowances" and "profit shares" or "dividends" (Exh. "6") to Arsenio, we uphold the factual finding of both courts that he replaced Zabat in the partnership.Indeed, the partnership was established to engage in a money-lending business, despite the fact that it was formalized only after the Memorandum of Agreement had been signed by petitioner and Gragera. Contrary to petitioner's contention, there is no evidence to show that a different business venture is referred to in this Agreement, which was executed on August 6, 1986, or about a month after the Memorandum had been signed by petitioner and Gragera on July 14, 1986. The Agreement itself attests to this fact:"WHEREAS, the parties have decided to formalize the terms of their business relationship in order that their respective interests may be properly defined and established for their mutual benefit and understanding."15Second Issue:No Proof of Misappropriation ofGragera's Unpaid CommissionPetitioner faults the CA finding that Nieves did not misappropriate money intended for Gragera's commission. According to him, Gragera remitted his daily collection to Nieves. This is shown by Exhibit "B" (the "Schedule of Daily Payments"), which bears her signature under the words "received by." For the period July 1986 to March 1987, Gragera should have earned a total commission of P4,282,429.30. However, only P3,068,133.20 was received by him. Thus, petitioner infers that she misappropriated the difference of P1,214,296.10, which represented the unpaid commissions. Exhibit "H" is an untitled tabulation which, according to him, shows that Gragera was also entitled to a commission of P200,000, an amount that was never delivered by Nieves.16On this point, the CA ruled that Exhibits "B", "F", "E" and "H" did not show that Nieves received for delivery to Gragera any amount from which the P1,214,296.10 unpaid commission was supposed to come, and that such exhibits were insufficient proof that she had embezzled P200,000. Said the CA:"The presentation of Exhibit "D" vaguely denominated as 'members ledger' does not clearly establish that Nieves received amounts from Monte Maria's members. The document does not clearly state what amounts the entries thereon represent. More importantly, Nieves made the entries for the limited period of January 11, 1987 to February 17, 1987 only while the rest were made by Gragera's own staff."Neither can we give probative value to Exhibit 'E' which allegedly shows acknowledgment of the remittance of commissions to Verona Gonzales. The document is a private one and its due execution and authenticity have not been duly proved as required in[S]ection 20, Rule 132 of the Rules of Court which states:'SECTION 20.Proof of Private Document Before any private document offered as authentic is received in evidence, its due execution and authenticity must be proved either:(a)By anyone who saw the document executed or written; or(b)By evidence of the genuineness of the signature or handwriting of the maker.'Any other private document need only be identified as that which it is claimed to be.'"The courta quoeven ruled that the signature thereon was a forgery, as it found that:'. . . . But NIEVES denied that Exh. E-1 is her signature; she claimed that it is a forgery. The initial stroke of Exh. E-1 starts from up and goes downward. The initial stroke of the genuine signatures of NIEVES (Exhs. A-3, B-1, F-1, among others) starts from below and goes upward. This difference in the start of the initial stroke of the signatures Exhs. E-1 and of the genuine signatures lends credence to Nieves' claim that the signature Exh. E-1 is a forgery.'xxx xxx xxx"Nieves' testimony that the schedules of daily payment (Exhs. 'B' and 'F') were based on the predetermined 100% collection as guaranteed by Gragera is credible and clearly in accord with the evidence. A perusal of Exhs. "B" and "F" as well as Exhs. '15' to 15-DDDDDDDDDD' reveal that the entries were indeed based on the 100% assumptive collection guaranteed by Gragera. Thus, the total amount recorded on Exh. 'B' is exactly the number of borrowers multiplied by the projected collection of P150.00 per borrower. This holds true for Exh. 'F'."Corollarily, Nieves' explanation that the documents werepro formaand that she signed them not to signify that she collected the amounts but that she received the documents themselves is more believable than [petitioner's] assertion that she actually handled the amounts."Contrary to [petitioner's] assertion, Exhibit 'H' does not unequivocally establish that . . . Nieves received P200,000.00 as commission for Gragera. As correctly stated by the courta quo, the document showed a liquidation ofP240,000.00and not P200,000.00."Accordingly, we find Nieves' testimony that after August 20, 1986, all collections were made by Gragera believable and worthy of credence. Since Gragera guaranteed a daily 100% payment of the loans, he took charge of the collections. As [petitioner's] representative, Nieves merely prepared the daily cash flow reports (Exh. '15' to '15 DDDDDDDDDD') to enable [petitioner] to keep track of Gragera's operations. Gragera on the other hand devised the schedule of daily payment (Exhs. 'B' and 'F') to record the projected gross daily collections."As aptly observed by the courta quo:'26.1.As between the versions of SANTOS and NIEVES on how the commissions of GRAGERA [were] paid to him[,] that of NIEVES is more logical and practical and therefore, more believable. SANTOS' version would have given rise to this improbable situation: GRAGERA would collect the daily amortizations and then give them to NIEVES; NIEVES would get GRAGERA's commissions from the amortizations and then give such commission to GRAGERA.'"17These findings are in harmony with the trial court's ruling, which we quote below:"21.Exh. H does not prove that SANTOS gave to NIEVES and the latter received P200,000.00 for delivery to GRAGERA. Exh. H shows under its sixth column 'ADDITIONAL CASH' that the additional cash was P240,000.00. If Exh. H were the liquidation of the P200,000.00 as alleged by SANTOS, then his claim is not true. This is so because it is a liquidation of the sum of P240,000.00."21.1.SANTOS claimed that he learned of NIEVES' failure to give the P200,000.00 to GRAGERA when he received the latter's letter complaining of its delayed release. Assuming as true SANTOS' claim that he gave P200,000.00 to GRAGERA, there is no competent evidence that NIEVES did not give it to GRAGERA. The only proof that NIEVES did not give it is the letter. But SANTOS did not even present the letter in evidence. He did not explain why he did not."21.2.The evidence shows that all money transactions of the money-lending business of SANTOS were covered by petty cash vouchers. It is therefore strange why SANTOS did not present any voucher or receipt covering the P200,000.00."18In sum, the lower courts found it unbelievable that Nieves had embezzled P1,555,068.70 from the partnership. She did not remit P1,214,296.10 to Gragera, because he had deducted his commissions before remitting his collections. Exhibits "B" and "F" are merely computations of what Gragera should collect for the day; they do not show that Nieves received the amounts stated therein. Neither is there sufficient proof that she misappropriated P200,000, because Exhibit "H" does not indicate that such amount was received by her; in fact, it shows a different figure.Petitioner has utterly failed to demonstrate why a review of these factual findings is warranted. Well-entrenched is the basic rule that factual findings of the Court of Appeals affirming those of the trial court are binding and conclusive on the Supreme Court.19Although there are exceptions to this rule, petitioner has not satisfactorily shown that any of them is applicable to this issue.Third Issue:Accounting of PartnershipPetitioner refuses any liability for respondents' claims on the profits of the partnership. He maintains that "both business propositions were flops," as his investments were "consumed and eaten up by the commissions orchestrated to be due Gragera" a situation that "could not have been rendered possible without complicity between Nieves and Gragera."Respondent spouses, on the other hand, postulate that petitioner instituted the action below to avoid payment of the demands of Nieves, because sometime in March 1987, she "signified to petitioner that it was about time to get her share of the profits which had already accumulated to some P3 million." Respondents add that while the partnership has not declared dividends or liquidated its earnings, the profits are already reflected on paper. To prove the counterclaim of Nieves, the spouses show that from June 13, 1986 up to April 19, 1987, the profit totaled P20,429,520 (Exhs. "10"et seq. and "15" et seq.). Based on that income, her 15 percent share under the joint venture amounts to P3,064,428 (Exh. "10-I-3"); and Arsenio's, P2,026,000 minus the P30,000 which was already advanced to him (Petty Cash Vouchers, Exhs. "6, 6-A to 6-B").The CA originally held that respondents' counterclaim was premature, pending an accounting of the partnership. However, in its assailed Resolution of August 17, 1998, it turnedvolte face. Affirming the trial court's ruling on the counterclaim, it held as follows:"We earlier ruled that there is still need for an accounting of the profits and losses of the partnership before we can rule with certainty as to the respective shares of the partners. Upon a further review of the records of this case, however, there appears to be sufficient basis to determine the amount of shares of the parties and damages incurred by [respondents]. The fact is that the courta quoalready made such a determination [in its] decision dated August 13, 1991 on the basis of the facts on record."20The trial court's ruling alluded to above is quoted below:"27.The defendants' counterclaim for the payment of their share in the profits of their joint venture with SANTOS is supported by the evidence."27.1.NIEVES testified that: Her claim to a share in the profits is based on the agreement (Exhs. 5, 5-A and 5-B). The profits are shown in the working papers (Exhs. 10 to 10-I, inclusive) which she prepared. Exhs. 10 to 10-I (inclusive) were based on the daily cash flow reports of which Exh. 3 is a sample. The originals of the daily cash flow reports (Exhs. 3 and 15 to 15-D (10) were given to SANTOS. The joint venture had a net profit of P20,429,520.00 (Exh. 10-I-1), from its operations from June 13, 1986 to April 19, 1987 (Exh. 1-I-4). She had a share of P3,064,428.00 (Exh. 10-I-3) and ARSENIO, about P2,926,000.00, in the profits."27.1.1SANTOS never denied NIEVES' testimony that the money-lending business he was engaged in netted a profit and that the originals of the daily case flow reports were furnished to him. SANTOS however alleged that the money-lending operation of his joint venture with NIEVES and ZABAT resulted in a loss of about half a million pesos to him. But such loss, even if true, does not negate NIEVES' claim that overall, the joint venture among them SANTOS, NIEVES and ARSENIO netted a profit. There is no reason for the Court to doubt the veracity of [the testimony of] NIEVES."27.2The P26,260.50 which ARSENIO received as part of his share in the profits (Exhs. 6, 6-A and 6-B) should be deducted from his total share."21After a close examination of respondents' exhibits, we find reason to disagree with the CA. Exhibit "10-I"22shows that the partnership earned a "total income" of P20,429,520 for the period June 13, 1986 until April 19, 1987. This entry is derived from the sum of the amounts under the following column headings: "2-Day Advance Collection," "Service Fee," "Notarial Fee," "Application Fee," "Net Interest Income" and "Interest Income on Investment." Such entries represent the collections of the money-lending business or its gross income.SEACTHThe "total income" shown on Exhibit "10-I" did not consider the expenses sustained by the partnership. For instance, it did not factor in the "gross loan releases" representing the money loaned to clients. Since the business is money-lending, such releases are comparable with the inventory or supplies in other business enterprises.Noticeably missing from the computation of the "total income" is the deduction of the weekly allowance disbursed to respondents. Exhibits "I"et seq. and "J"et seq.23show that Arsenio received allowances from July 19, 1986 to March 27, 1987 in the aggregate amount of P25,500; and Nieves, from July 12, 1986 to March 27, 1987 in the total amount of P25,600. These allowances are different from the profit already received by Arsenio. They represent expenses that should have been deducted from the business profits. The point is that all expenses incurred by the money-lending enterprise of the parties must first be deducted from the "total income" in order to arrive at the "net profit" of the partnership. The share of each one of them should be based on this "net profit" and not from the "gross income" or "total income" reflected in Exhibit "10-I," which the two courts invariably referred to as "cash flow" sheets.Similarly, Exhibits "15"et seq.,24which are the "Daily Cashflow Reports," do not reflect the business expenses incurred by the parties, because they show only the daily cash collections. Contrary to the rulings of both the trial and the appellate courts, respondents' exhibits do not reflect thecompletefinancial condition of the money-lending business. The lower courts obviously labored over a mistaken notion that Exhibit "10-I-1" represented the "net profits" earned by the partnership.For the purpose of determining the profit that should go to an industrial partner (who shares in the profits but is not liable for the losses), the gross income from all the transactions carried on by the firm must be added together, and from this sum must be subtracted the expenses or the losses sustained in the business. Only in the difference representing the net profits does the industrial partner share. But if, on the contrary, the losses exceed the income, the industrial partner does not share in the losses.25When the judgment of the CA is premised on a misapprehension of facts or a failure to notice certain relevant facts that would otherwise justify a different conclusion, as in this particular issue, a review of its factual findings may be conducted, as an exception to the general rule applied to the first two issues.26The trial court has the advantage of observing the witnesses while they are testifying, an opportunity not available to appellate courts. Thus, its assessment of the credibility of witnesses and their testimonies are accorded great weight, even finality, when supported by substantial evidence; more so when such assessment is affirmed by the CA. But when the issue involves the evaluation of exhibits or documents that are attached to the case records, as in the third issue, the rule may be relaxed. Under that situation, this Court has a similar opportunity to inspect, examine and evaluate those records, independently of the lower courts. Hence, we deem the award of the partnership share, as computed by the trial court and adopted by the CA, to be incomplete and not binding on this Court.WHEREFORE, the Petition is partly GRANTED. The assailed November 28, 1997 Decision is AFFIRMED, but the challenged Resolutions dated August 17, 1998 and October 9, 1998 are REVERSED and SET ASIDE. No costs.SO ORDERED.SECOND DIVISION[G.R. Nos.L-41182-3. April 15, 1988.]DR. CARLOS L.SEVILLAand LINA O.SEVILLA,petitioners-appellants,vs.THECOURT OF APPEALS, TOURIST WORLD SERVICE, INC., ELISEO S. CANILAO, and SEGUNDINA NOGUERA,respondents-appellees.Roman P. Mosquedafor petitioners-appellants.Felipe Magatfor respondents-appellees.SYLLABUS1.LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYER-EMPLOYEE RELATIONSHIP; TEST TO DETERMINE ITS EXISTENCE. In this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation. In general, we have relied on the so-called right of control test, "where the person for whom the services are performed reserves a right to control notonly the endto be achievedbut also the meansto be used in reaching such end." Subsequently, however, we have considered, in addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee relationship.2.CIVIL LAW; OBLIGATIONS AND CONTRACTS; AGENCY; CONSTRUED. When the petitioner, LinaSevilla, agreed to (wo)man the private respondent, Tourist World Service, Inc.'s Ermita office, she must have done so pursuant to a contract of agency. It is the essence of this contract that the agent renders services "in representation or on behalf of another."3.ID.; ID.; ID.; CASE AT BAR. In the case at bar,Sevillasolicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. And as we said,Sevillaherself, based on her letter of November 28, 1961, presumed her principal's authority as owner of the business undertaking. We are convinced, considering the circumstances and from the respondent Court's recital of facts, that the parties had contemplated a principal-agent relationship, rather than a joint management or a partnership.4.ID.; ID.; ID.; CANNOT BE REVOKED AT WILL. The agency that we hereby declare to be compatible with the intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the agency having been created for the mutual interest of the agent and the principal.5.CIVIL LAW; DAMAGES; AWARD THEREOF PROPER IN BREACH OF CONTRACT. We rule that for its unwarranted revocation of the contract of agency, the private respondent, Tourist World Service, Inc., should be sentenced to pay damages. Under the Civil Code, moral damages may be awarded for "breaches of contract where the defendant acted . . . in bad faith." We likewise condemn Tourist World Service, Inc. to pay further damages for the moral injury done to LinaSevillaarising from its brazen conduct subsequent to the cancellation of the power of attorney granted to her on the authority of Article 21 of the Civil Code, in relation to Article 2219 (10) thereof. The Court considers the sums of P25,000.00 as and for moral damages, P10,000.00 as exemplary damages, and P5,000.00 as nominal and/or temperate damages, to be just, fair, and reasonable under the circumstances.D E C I S I O NSARMIENTO,Jp:The petitioners invoke the provisions on human relations of the Civil Code in this appeal by certiorari. The facts are beyond dispute:xxx xxx xxxOn the strength of a contract (Exhibit A for the appellants Exhibit 2 for the appellees) entered into on Oct. 19, 1960 by and between Mrs. Segundina Noguera, party of the first part; the Tourist World Service, Inc., represented by Mr. Eliseo Canilao as party of the second part, and hereinafter referred to as appellants, the Tourist World Service, Inc. leased the premises belonging to the party of the first part at Mabini St., Manila for the former's use as a branch office. In the said contract the party of the third part held herself solidarily liable with the party of the second part for the prompt payment of the monthly rental agreed on. When the branch office was opened, the same was run by the herein appellant Lina O.Sevillapayable to Tourist World Service Inc. by any airline for any fare brought in on the efforts of Mrs. LinaSevilla, 4% was to go to LinaSevillaand 3% was to be withheld by the Tourist World Service, Inc. CdprOn or about November 24, 1961 (Exhibit 16) the Tourist World Service, Inc. appears to have been informed that LinaSevillawas connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was anyhow losing, the Tourist World Service considered closing down its office. This was firmed up by two resolutions of the board of directors of Tourist World Service, Inc. dated Dec. 2, 1961 (Exhibits 12 and 13), the first abolishing the office of the manager and vice-president of the Tourist World Service, Inc., Ermita Branch, and the second, authorizing the corporate secretary to receive the properties of the Tourist World Service then located at the said branch office. It further appears that on Jan. 3, 1962, the contract with the appellees for the use of the Branch Office premises was terminated and while the effectivity thereof was Jan. 31, 1962, the appellees no longer used it. As a matter of fact appellants used it since Nov. 1961. Because of this, and to comply with the mandate of the Tourist World Service, the corporate secretary Gabino Canilao went over to the branch office, and, finding the premises locked, and, being unable to contact LinaSevilla, he padlocked the premises on June 4, 1962 to protect the interests of the Tourist World Service. When neither the appellant LinaSevillanor any of her employees could enter the locked premises, a complaint was filed by the herein appellants against the appellees with a prayer for the issuance of mandatory preliminary injunction. Both appellees answered with counterclaims. For apparent lack of interest of the parties therein, the trial court ordered the dismissal of the case without prejudice.The appellee Segundina Noguera sought reconsideration of the order dismissing her counterclaim which the courta quo,in an order dated June 8, 1963, granted permitting her to present evidence in support of her counterclaim.On June 17, 1963, appellant LinaSevillarefiled her case against the herein appellees and after the issues were joined, the reinstated counterclaim of Segundina Noguera and the new complaint of appellant LinaSevillawere jointly heard following which the courta quoordered both cases dismissed for lack of merit, on the basis of which was elevated the instant appeal on the following assignment of errors:"I.THE LOWER COURT ERRED EVEN IN APPRECIATING THE NATURE OF PLAINTIFF-APPELLANT MRS. LINA O.SEVILLA'SCOMPLAINT."II.THE LOWER COURT ERRED IN HOLDING THAT APPELLANT MRS. LINA O.SEVILLA'SARRANGEMENT (WITH APPELLEE TOURIST WORLD SERVICE, INC.) WAS ONE MERELY OF EMPLOYER-EMPLOYEE RELATION AND IN FAILING TO HOLD THAT THE SAID ARRANGEMENT WAS ONE OF JOINT BUSINESS VENTURE."III.THE LOWER COURT ERRED IN RULING THAT PLAINTIFF-APPELLANT MRS. LINA O.SEVILLAIS ESTOPPED FROM DENYING THAT SHE WAS A MERE EMPLOYEE OF DEFENDANT-APPELLEE TOURIST WORLD SERVICE, INC. EVEN AS AGAINST THE LATTER."IV.THE LOWER COURT ERRED IN NOT HOLDING THAT APPELLEES HAD NO RIGHT TO EVICT APPELLANT MRS. LINA O.SEVILLAFROM THE A. MABINI OFFICE BY TAKING THE LAW INTO THEIR OWN HANDS."V.THE LOWER COURT ERRED IN NOT CONSIDERING AT ALL APPELLEE NOGUERA'S RESPONSIBILITY FOR APPELLANT MRS. LINA O.SEVILLA'SFORCIBLE DISPOSSESSION OF THE A. MABINI PREMISES."VI.THE LOWER COURT ERRED IN FINDING THAT APPELLANT MRS. LINA O.SEVILLASIGNED MERELY AS GUARANTOR FOR RENTALS."On the foregoing facts and in the light of the errors assigned the issues to be resolved are:1.Whether the appellee Tourist World Service unilaterally disconnected the telephone line at the branch office on Ermita;2.Whether or not the padlocking of the office by the Tourist World Service was actionable or not; and3.Whether or not the lessee to the office premises belonging to the appellee Noguera was appellee TWS or TWS and the appellant.cdllIn this appeal, appellant LinaSevillaclaims that a joint business venture was entered into by and between her and appellee TWS with offices at the Ermita branch office and that she was not an employee of the TWS to the end that her relationship with TWS was one of a joint business venture appellant made declarations showing:"1.Appellant Mrs. Lina O.Sevilla, a prominent social figure and wife of an eminent eye, ear and nose specialist as well as a society columnist, had been in the travel business prior to the establishment of the joint business venture with appellee Tourist World Service, Inc. and appellee Eliseo Canilao, her compadre, she being the godmother of one of his children, with her own clientele, coming mostly from her own social circle (pp. 3-6 tsn. February 16, 1965)."2.Appellant Mrs.Sevillawas signatory to a lease agreement dated 19 October 1960 (Exh. "A") covering the premises at A. Mabini St., she expressly warranting and holding [sic] herself 'solidarily' liable with appellee Tourist World Service, Inc. for the prompt payment of the monthly rentals thereof to other appellee Mrs. Noguera (pp. 14-15, tsn. Jan. 18, 1964)."3.Appellant Mrs.Sevilladid not receive any salary from appellee Tourist World Service, Inc., which had its own separate office located at the Trade & Commerce Building; nor was she an employee thereof, having no participation in nor connection with said business at the Trade & Commerce Building (pp. 16-18 tsn. id.)."4.Appellant Mrs.Sevillaearned commissions for her own passengers, her own bookings, her own business (and not for any of the business of appellee Tourist World Service, Inc.) obtained from the airline companies. She shared the 7% commissions given by the airline companies, giving appellee Tourist World Service, Inc. 3% thereof and retaining 4% for herself (pp. 18 tsn. id.)"5.Appellant Mrs.Sevillalikewise shared in the expenses of maintaining the A. Mabini St. office, paying for the salary of an office secretary, Miss Obieta, and other sundry expenses, aside from designing the office furniture and supplying some office furnishings (pp. 15, 18 tsn. April 6, 1965), appellee Tourist World Service, Inc. shouldering the rental and other expenses in consideration for the 3% split in the commissions procured by appellant Mrs.Sevilla(p. 35 tsn. Feb. 16, 1965)."6.It was the understanding between them that appellant Mrs.Sevillawould be given the title of branch manager for appearance's sake only (p. 31 tsn. id.), appellee Eliseo Canilao admitting that it was just a title for dignity (p. 36 tsn June 18, 1965 - testimony of appellee Eliseo Canilao; pp. 38-39 tsn. April 6, 1966 - testimony of corporate secretary Gabino Canilao)." (pp. 2-5, Appellants' Reply Brief)Upon the other hand, appellee TWS contend that the appellant was an employee of the appellee Tourist World Service, Inc. and as such was designated manager."1xxx xxx xxxThe trial court2held for the private respondents on the premise that the private respondent, Tourist World Service, Inc., being the true lessee, it was within its prerogative to terminate the lease and padlock the premises.3It likewise found the petitioner, LinaSevilla, to be a mere employee of said Tourist World Service, Inc. and as such, she was bound by the acts of her employer.4The respondentCourt of Appeals5rendered an affirmance.prLLThe petitioners now claim that the respondent Court, in sustaining the lower court, erred. Specifically, they state:I.THECOURT OF APPEALSERRED ON A QUESTION OF LAW AND GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT "THE PADLOCKING OF THE PREMISES BY TOURIST WORLD SERVICE INC. WITHOUT THE KNOWLEDGE AND CONSENT OF THE APPELLANT LINASEVILLA. . . WITHOUT NOTIFYING MRS. LINA O.SEVILLAOR ANY OF HER EMPLOYEES AND WITHOUT INFORMING COUNSEL FOR THE APPELLANT (SEVILLA), WHO IMMEDIATELY BEFORE THE PADLOCKING INCIDENT, WAS IN CONFERENCE WITH THE CORPORATE SECRETARY OF TOURIST WORLD SERVICE (ADMITTEDLY THE PERSON WHO PADLOCKED THE SAID OFFICE), IN THEIR ATTEMPT TO AMICABLY SETTLE THE CONTROVERSY BETWEEN THE APPELLANT (SEVILLA) AND THE TOURIST WORLD SERVICE . . . (DID NOT) ENTITLE THE LATTER TO THE RELIEF OF DAMAGES" (ANNEX "A" PP. 7, 8 AND ANNEX "B" P. 2) - A DECISION AGAINST DUE PROCESS WHICH ADHERES TO THE RULE OF LAW.II.THECOURT OF APPEALSERRED ON A QUESTION OF LAW AND GRAVELY ABUSED ITS DISCRETION IN DENYING APPELLANTSEVILLARELIEF BECAUSE SHE HAD "OFFERED TO WITHDRAW HER COMPLAINT PROVIDED THAT ALL CLAIMS AND COUNTERCLAIMS LODGED BY BOTH APPELLEES WERE WITHDRAWN." (ANNEX "A" P. 8)III.THECOURT OF APPEALSERRED ON A QUESTION OF LAW AND GRAVELY ABUSED ITS DISCRETION IN DENYING - IN FACT NOT PASSING AND RESOLVING - APPELLANTSEVILLA'SCAUSE OF ACTION FOUNDED ON ARTICLES 19, 20 AND 21 OF THE CIVIL CODE ON HUMAN RELATIONS.IV.THECOURT OF APPEALSERRED ON A QUESTION OF LAW AND GRAVELY ABUSED ITS DISCRETION IN DENYING APPELLANTSEVILLARELIEF YET NOT RESOLVING HER CLAIM THAT SHE WAS IN JOINT VENTURE WITH TOURIST WORLD SERVICE INC. OR AT LEAST ITS AGENT COUPLED WITH AN INTEREST WHICH COULD NOT BE TERMINATED OR REVOKED UNILATERALLY BY TOURIST WORLD SERVICE INC.6As a preliminary inquiry, the Court is asked to declare the true nature of the relation between LinaSevillaand Tourist World Service, Inc. The respondentCourt of Appealsdid not see fit to rule on the question, the crucial issue, in its opinion being "whether or not the padlocking of the premises by the Tourist World Service, Inc. without the knowledge and consent of the appellant LinaSevillaentitled the latter to the relief of damages prayed for and whether or not the evidence for the said appellant supports the contention that the appellee Tourist World Service, Inc. unilaterally and without the consent of the appellant disconnected the telephone lines of the Ermita branch office of the appellee Tourist World Service, Inc."7Tourist World Service, Inc., insists, on the other hand, that LinaSevillawas a mere employee, being "branch manager" of its Ermita "branch" office and that inferentially, she had no say on the lease executed with the private respondent, Segundina Noguera. The petitioners contend, however, that relation between the parties was one of joint venture, but concede that "whatever might have been the true relationship betweenSevillaand Tourist World Service," the Rule of Law enjoined Tourist World Service and Canilao from taking the law into their own hands,"8in reference to the padlocking now questioned.cdphilThe Court finds the resolution of the issue material, for if, as the private respondent, Tourist World Service, Inc., maintains, that the relation between the parties was in the character of employer and employee,the courts would have been without jurisdiction to try the case, labor disputes being the exclusive domain of the Court of Industrial Relations, later, the Bureau of Labor Relations, pursuant to statutes then in force.9In this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation. In general, we have relied on the so-called right of control test, "where the person for whom the services are performed reserves a right to control notonly the endto be achievedbut also the meansto be used in reaching such end."10Subsequently, however, we have considered, in addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee relationship.11The records will show that the petitioner, LinaSevilla, was not subject to control by the private respondent Tourist World Service, Inc., either as to the result of the enterprise or as to the means used in connection therewith. In the first place, under the contract of lease covering the Tourist World's Ermita office, she had bound herselfin solidumas and for rental payments, an arrangement that would belie claims of a master-servant relationship. True, the respondent Court would later minimize her participation in the lease as one of mere guaranty,12that does not make her an employee of Tourist World, since in any case, a true employee cannot be made to part with his own money in pursuance of his employer's business, or otherwise, assume any liability thereof. In that event, the parties must be bound by some other relation, but certainly not employment.In the second place, and as found by the Appellate Court, "[w]hen the branch office was opened, the same was run by the herein appellant Lina O.Sevillapayable to Tourist World Service, Inc. by any airline for any fare brought in on the effort of Mrs. LinaSevilla."13Under these circumstances, it cannot be said thatSevillawas under the control of Tourist World Service, Inc. "as to the means used."Sevillain pursuing the business, obviously relied on her own gifts and capabilities.It is further admitted thatSevillawas not in the company's payroll. For her efforts, she retained 4% in commissions from airline bookings, the remaining 3% going to Tourist World. Unlike an employee then, who earns a fixed salary usually, she earned compensation in fluctuating amounts depending on her booking successes.The fact thatSevillahad been designated "branch manager" does not make her, ergo, Tourist World's employee. As we said, employment is determined by the right-of-control test and certain economic parameters. But titles are weak indicators.In rejecting Tourist World Service, Inc.'s arguments however, we are not, as a consequence, accepting LinaSevilla'sown, that is, that the parties had embarked on a joint venture or otherwise, a partnership. And apparently,Sevillaherself did not recognize the existence of such a relation. In her letter of November 28, 1961, she expressly "concedes your [Tourist World Service, Inc.'s] right to stop the operation of your branch office,"14in effect, accepting Tourist World Service, Inc.'s control over the manner in which the business was run. A joint venture, including a partnership, presupposes generally a parity of standing between the joint co-venturers or partners, in which each party has an equal proprietary interest in the capital or property contributed15and where each party exercises equal rights in the conduct of the business.16Furthermore, the parties did not hold themselves out as partners, and the building itself was embellished with the electric sign "Tourist World Service, Inc.,"17in lieu of a distinct partnership name.It is the Court's considered opinion, that when the petitioner, LinaSevilla, agreed to (wo)man the private respondent, Tourist World Service, Inc.'s Ermita office, she must have done so pursuant to a contract of agency. It is the essence of this contract that the agent renders services "in representation or on behalf of another."18In the case at bar,Sevillasolicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. And as we said,Sevillaherself, based on her letter of November 28, 1961, presumed her principal's authority as owner of the business undertaking. We are convinced, considering the circumstances and from the respondent Court's recital of facts, that the parties had contemplated a principal-agent relationship, rather than a joint management or a partnership.But unlike simple grants of a power of attorney, the agency that we hereby declare to be compatible with the intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the agency having been created for the mutual interest of the agent and the principal.19It appears that LinaSevillais abona fidetravel agent herself, and as such, she had acquired an interest in the business entrusted to her. Moreover, she had assumed a personal obligation for the operation thereof, holding herself solidarily liable for the payment of rentals. She continued the business, using her own name, after Tourist World had stopped further operations. Her interest, obviously, is not limited to the commissions she earned as a result of her business transactions, but one that extends to the very subject matter of the power of management delegated to her. It is an agency that, as we said, cannot be revoked at the pleasure of the principal. Accordingly, the revocation complained of should entitle the petitioner, LinaSevilla, to damages.cdllAs we have stated, the respondent Court avoided this issue, confining itself to the telephone disconnection and padlocking incidents. Anent the disconnection issue, it is the holding of theCourt of Appealsthat there is "no evidence showing that the Tourist World Service, Inc. disconnected the telephone lines at the branch office."20Yet, what cannot be denied is the fact that Tourist World Service, Inc. did not take pains to have them reconnected. Assuming, therefore, that it had no hand in the disconnection now complained of, it had clearly condoned it, and as owner of the telephone lines, it must shoulder responsibility therefor.TheCourt of Appealsmust likewise be held to be in error with respect to the padlocking incident. For the fact that Tourist World Service, Inc. was the lessee named in the lease contract did not accord it any authority to terminate that contract without notice to its actual occupant, and to padlock the premises in such blitzkrieg fashion. As this Court has ruled, the petitioner, LinaSevilla, had acquired a personal stake in the business itself, and necessarily, in the equipment pertaining thereto. Furthermore,Sevillawas not a stranger to that contract having been explicitly named therein as a third party in charge of rental payments (solidarily with Tourist World, Inc.). She could not be ousted from possession as summarily as one would eject an interloper.The Court is satisfied that from the chronicle of events, there was indeed some malevolent design to put the petitioner, LinaSevilla, in a bad light following disclosures that she had worked for a rival firm. To be sure, the respondent court speaks of alleged business losses to justify the closure,21but there is no clear showing that Tourist World Ermita Branch had in fact sustained such reverses, let alone, the fact thatSevillahad moonlit for another company. What the evidence discloses, on the other hand, is that following such an information (thatSevillawas working for another company), Tourist World's board of directors adopted two resolutions abolishing the office of "manager" and authorizing the corporate secretary, the respondent Eliseo Canilao, to effect the takeover of its branch office properties. On January 3, 1962, the private respondents ended the lease over the branch office premises, incidentally, without notice to her.It was only on June 4, 1962, and after office hours significantly, that the Ermita office was padlocked, personally by the respondent Canilao, on the pretext that it was necessary "to protect the interests of the Tourist World Service."22It is strange indeed that Tourist World Service, Inc. did not find such a need when it cancelled the lease five months earlier. While Tourist World Service, Inc. would not pretend that it sought to locateSevillato inform her of the closure, but surely, it was aware that after office hours, she could not have been anywhere near the premises. Capping these series of "offensives," it cut the office's telephone lines, paralyzing completely its business operations, and in the process, deprivingSevillaof her participation therein.This conduct on the part of Tourist World Service, Inc. betrays a sinister effort to punishSevillafor what it had perceived to be disloyalty on her part. It is offensive, in any event, to elementary norms of justice and fair play.We rule, therefore, that for its unwarranted revocation of the contract of agency, the private respondent, Tourist World Service, Inc., should be sentenced to pay damages.Under the Civil Code, moral damages may be awarded for "breaches of contract where the defendant acted . . . in bad faith."23We likewise condemn Tourist World Service, Inc. to pay further damages for the moral injury done to LinaSevillaarising from its brazen conduct subsequent to the cancellation of the power of attorney granted to her on the authority of Article 21 of the Civil Code, in relation to Article 2219 (10) thereof:ART. 21.Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. prcdART. 2219.Moral damages may be recovered in the following and analogous cases:xxx xxx xxx(10)Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.The respondent, Eliseo Canilao, as a joint tortfeasor, is likewise hereby ordered to respond for the same damages in a solidary capacity.Insofar, however, as the private respondent, Segundina Noguera is concerned, no evidence has been shown that she had connived with Tourist World Service, Inc. in the disconnection and padlocking incidents. She cannot therefore be held liable as a co-tortfeasor.The Court considers the sums of P25,000.00 as and for moral damages,24P10,000.00 as exemplary damages,25and P5,000.00 as nominal26and/or temperate27damages, to be just, fair, and reasonable under the circumstances.WHEREFORE, the Decision promulgated on January 23, 1975 as well as the Resolution issued on July 31, 1975, by the respondentCourt of Appealsis hereby REVERSED and SET ASIDE. The private respondent, Tourist World Service, Inc., and Eliseo Canilao, are ORDERED jointly and severally to indemnify the petitioner, LinaSevilla, the sum of P25,000.00 as and for moral damages, the sum of P10,000.00, as and for exemplary damages, and the sum of P5,000.00, as and for nominal and/or temperate damages.llcdCosts against said private respondents.SO ORDERED.FIRST DIVISION[G.R. No.L-49982. April 27, 1988.]ELIGIO ESTANISLAO, JR.,petitioner,vs.THE HONORABLE COURT OF APPEALS, REMEDIOS ESTANISLAO, EMILIO and LEOCADIO SANTIAGO,respondents.Agustin O. Benitezfor petitioner.Benjamin C. Yatcofor private respondents.SYLLABUS1.CIVIL LAW; OBLIGATIONS AND CONTRACTS; PARTNERSHIP; FORMED WHERE MEMBERS OF THE SAME FAMILY BOUND THEMSELVES TO CONTRIBUTE MONEY TO A COMMON FUND WITH THE INTENTION OF DIVIDING THE PROFITS AMONG THEMSELVES. The Joint Affidavit of April 11, 1966 (Exhibit A), clearly stipulated by the members of the same family that the P15,000.00 advance rental due to them from SHELL shall augment their "capital investment" in the operation of the gasoline station. Moreover other evidence in the record shows that there was in fact such partnership agreement between the parties. This is attested by the testimonies of private respondent Remedios Estanislao and Atty. Angeles. Petitioner submitted to private respondents periodic accounting of the business. Petitioner gave a written authority to private respondent Remedios Estanislao, his sister, to examine and audit the books of their "common business" (aming negosyo). Respondent Remedios assisted in the running of the business. There is no doubt that the parties hereto formed a partnership when they bound themselves to contribute money to a common fund with the intention of dividing the profits among themselves.2.REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE COURT OF APPEALS, GENERALLY CONCLUSIVE ON APPEAL. The findings of facts of the respondent court are conclusive in this proceeding, and its conclusion based on the said facts are in accordance with the applicable law.D E C I S I O NGANCAYCO,Jp:By this petition for certiorari the Court is asked to determine if a partnership exists between members of the same family arising from their joint ownership of certain properties.Petitioner and private respondents are brothers and sisters who are co-owners of certain lots at the corner of Annapolis and Aurora Blvd., Quezon City which were then being leased to the Shell Company of the Philippines Limited (SHELL). They agreed to open and operate a gas station thereat to be known as Estanislao Shell Service Station with an initial investment of P15,000.00 to be taken from the advance rentals due to them from SHELL for the occupancy of the said lots owned in common by them. A joint affidavit was executed by them on April 11, 1966 which was prepared by Atty. Democrito Angeles.1They agreed to help their brother, petitioner herein, by allowing him to operate and manage the gasoline service station of the family. They negotiated with SHELL. For practical purposes and in order not to run counter to the company's policy of appointing only one dealer, it was agreed that petitioner would apply for the dealership. Respondent Remedios helped in co-managing the business with petitioner from May 3, 1966 up to February 16, 1967.On May 26, 1966, the parties herein entered into an Additional Cash Pledge Agreement with SHELL wherein it was reiterated that the P15,000.00 advance rental shall be deposited with SHELL to cover advances of fuel to petitioner as dealer with a proviso that said agreement "cancels and supersedes the Joint Affidavit dated 11 April 1966 executed by the co-owners."2For sometime, the petitioner submitted financial statements regarding the operation of the business to private respondents, but thereafter petitioner failed to render subsequent accounting. Hence through Atty. Angeles, a demand was made on petitioner to render an accounting of the profits.The financial report of December 31, 1968 shows that the business was able to make a profit of P87,293.79 and that by the year ending 1969, a profit of P150,000.00 was realized.3Thus, on August 25, 1970 private respondents filed a complaint in the Court of First Instance of Rizal against petitioner saying among others that the latter be ordered:"1.to execute a public document embodying all the provisions of the partnership agreement entered into between plaintiffs and defendants provided in Article 1771 of the New Civil Code;"2.to render a formal accounting of the business operation covering the period from May 6, 1966 up to December 21, 1968 and from January 1, 1969 up to the time the order is issued and that the same be subject to proper audit;"3.to pay the plaintiffs their lawful shares and participation in the net profits of the business in an amount of no less than P150,000.00 with interest at the rate of 1% per month from date of demand until full payment thereof for the entire duration of the business; and"4.to pay the plaintiffs the amount of P10,000.00 as attorney's fees and costs of the suit." (pp. 13-14 Record on Appeal.)"After trial on the merits, on October 15, 1975, Hon. Lino Anover, who was then the temporary presiding judge of Branch IV of the trial court, rendered judgment dismissing the complaint and counterclaim and ordering private respondents to pay petitioner P3,000.00 attorney's fee and costs. Private respondent filed a motion for reconsideration of the decision. On December 1, 1975, Hon. Ricardo Tensuan who was the newly appointed presiding judge of the same branch, set aside the aforesaid decision and rendered another decision in favor of said respondents.cdllThe dispositive part thereof reads as follows:'WHEREFORE, the Decision of this Court dated October 14, 1975 is hereby reconsidered and a new judgment is hereby rendered in favor of the plaintiffs and as against the defendant:(1)Ordering the defendant to execute a public instrument embodying all the provisions of the partnership agreement entered into between plaintiffs and defendant as provided for in Article 1771, Civil Code of the Philippines;(2)Ordering the defendant to render a formal accounting of the business operation from April 1969 up to the time this order is issued, the same to be subject to examination and audit by the plaintiff;(3)Ordering the defendant to pay plaintiffs their lawful shares and participation in the net profits of the business in the amount of P150,000.00, with interest thereon at the rate of One (1%) Per Cent per month from date of demand until full payment thereof;(4)Ordering the defendant to pay the plaintiffs the sum of P5,000.00 by way of attorney's fees of plaintiffs' counsel; as well as the costs of suit." (pp. 161-162. Record on Appeal)."Petitioner then interposed an appeal to the Court of Appeals enumerating seven (7) errors allegedly committed by the trial court. In due course, a decision was rendered by the Court of Appeals on November 28, 1978 affirmingin totothe decision of the lower court with costs against petitioner.*A motion for reconsideration of said decision filed by petitioner was denied on January 30, 1979. Not satisfied therewith, the petitioner now comes to this court by way of this petition for certiorari alleging that the respondent court erred:"1.In interpreting the legal import of the Joint Affidavit (Exh. "A") vis-a-vis the Additional Cash Pledge Agreement (Exhs. "B-2," "6," and "L"); and2.In declaring that a partnership was established by and among the petitioner and the private respondents as regards the ownership and/or operation of the gasoline service station business."Petitioner relies heavily on the provisions of the Joint Affidavit of April 11, 1966 (Exhibit A) and the Additional Cash Pledge Agreement of May 20, 1966 (Exhibit 6) which are herein reproduced -(a)The joint Affidavit of April 11, 1966, Exhibit A reads:"(1)That we are the Lessors of two parcels of land fully described in Transfer Certificates of Title Nos. 45071 and 71244 of the Register of Deeds of Quezon City, in favor of the LESSEE - SHELL COMPANY OF THE PHILIPPINES LIMITED, a corporation duly licensed to do business in the Philippines;"(2)That we have requested the said SHELL COMPANY OF THE PHILIPPINES LIMITED, advanced rentals in the total amount of FIFTEEN THOUSAND PESOS (P15,000.00) Philippine Currency, so that we can use the said amount to augment our capital investment in the operation of that gasoline station constructed by the said company on our two lots aforesaid by virtue of an outstanding Lease Agreement we have entered into with the said company."(3)That the said SHELL COMPANY OF THE PHILIPPINES LIMITED out of its benevolence and desire to help us in augmenting our capital investment in the operation of the said gasoline station, has agreed to give us the said amount of P15,000.00, which amount will partake the nature of ADVANCED RENTALS;"(4)That we have freely and voluntarily agreed that upon receipt of the said amount of FIFTEEN THOUSAND PESOS (P15,000,00) from the SHELL COMPANY OF THE PHILIPPINES LIMITED, the said sum as ADVANCED RENTALS to us be applied as monthly rentals for the said two lots under our Lease Agreement starting on the 25th of May, 1966 until such time that the said amount of P15,000.00 be applicable, which time to our estimate will cover at four and one-half months from May 25, 1966 or until the 10th of October, 1966 more or less;"(5)That we have likewise agreed among ourselves that the SHELL COMPANY OF THE PHILIPPINES LIMITED execute an instrument for us to sign embodying our conformity that the said amount that it will generously grant us as requested be applied as ADVANCED RENTALS; and"(6)FURTHER AFFIANTS SAYETH NOT.'(b)The Additional Cash Pledge Agreement of May 20, 1966, Exhibit 6, is as follows:"WHEREAS, under the Lease Agreement dated 13th November, 1963 (identified as doc. Nos. 491 & 1407, Page Nos. 99 & 66, Book Nos. V & 111, Series of 1963 in the Notarial Registers of Notaries Public Rosauro Marquez, and R.D. Liwanag, respectively) executed in favour of SHELL by the herein CO-OWNERS and another Lease Agreement dated 19th March 1964 . . . also executed in favour of SHELL by CO-OWNERS Remedios and MARIA ESTANISLAO for the lease of adjoining portions of two parcels of land at Aurora Blvd./Annapolis, Quezon City, the CO-OWNERS RECEIVE a total monthly rental of PESOS THREE THOUSAND THREE HUNDRED EIGHTY TWO AND 29/100 (P3,382.29), Philippine Currency;"WHEREAS, CO-OWNER Eligio Estanislao, Jr. is the Dealer of the Shell Station constructed on the leased land, and as Dealer under the Cash Pledge Agreement dated 11th May 1966, he deposited to SHELL in cash the amount of PESOS TEN THOUSAND (P10,000), Philippine Currency, to secure his purchases on credit of Shell petroleum products; . . . cdll"WHEREAS, said DEALER, in his desire to be granted an increased credit limit up to P25,000, has secured the conformity of his CO-OWNERS to waive and assign to SHELL the total monthly rentals due to all of them to accumulate the equivalent amount of P15,000, commencing 24th May 1966, this P15,000 shall be treated as additional cash deposit to SHELL under the same terms and conditions of the aforementioned Cash Pledge Agreement dated 11th May 1966.NOW, THEREFORE, for and in consideration of the foregoing premises, and the mutual covenants among the CO-OWNERS herein and SHELL, said parties have agreed and hereby agree as follows:"1.The CO-OWNERS do hereby waive in favour of DEALER the monthly rentals due to all CO-OWNERS, collectively, under the above described two Lease Agreements, one dated 13th November 1963 and the other dated 19th March 1964 to enable DEALER to increase his existing cash deposit to SHELL, from P10,000 to P25,000, for such purpose, the SHELL, CO-OWNERS and DEALER hereby irrevocably assign to SHELL the monthly rental of P3,382.29 payable to them respectively as they fall due, monthly, commencing 24th May 1966, until such time that the monthly rentals accumulated, shall be equal to P15,000."2.The above stated monthly rentals accumulated shall be treated as additional cash deposit by DEALER to SHELL, thereby increasing his credit limit from P10,000 to P25,000.This agreement, therefore, cancels and supersedes the Joint Affidavit dated 11 April 1966 executed by the CO-OWNERS."3.Effective upon the signing of this agreement, SHELL agrees to allow DEALER to purchase from SHELL petroleum products, on credit, up to the amount of P25,000."4.This increase in the credit limit shall also be subject to the same terms and conditions of the above-mentioned Cash Pledge Agreement dated 11th May 1966." (Exhs. "B-2," "L," and "6"; emphasis supplied)In the aforesaid Joint Affidavit of April 11, 1966 (Exhibit A), it is clearly stipulated by the parties that the P15,000.00 advance rental due to them from SHELL shall augment their "capital investment" in the operation of the gasoline station, which advance rentals shall be credited as rentals from May 25, 1966 up to four and one-half months or until 10 October 1966, more or less covering said P15,000.00.In the subsequent document entitled `Additional Cash Pledge Agreement" above reproduced (Exhibit 6), the private respondents and petitioners assigned to SHELL the monthly rentals due them commencing the 24th of May 1966 until such time that the monthly rentals accumulated equal P15,000.00 which private respondents agree to be a cash deposit of petitioner in favor of SHELL to increase his credit limit as dealer. As above-stated it provided therein that "This agreement, therefore, cancels and supersedes the Joint Affidavit dated 11 April 1966 executed by the CO-OWNERS."Petitioner contends that because of the said stipulation cancelling and superseding that previous Joint Affidavit, whatever partnership agreement there was in said previous agreement had thereby been abrogated. We find no merit in this argument. Said cancelling provision was necessary for the Joint Affidavit speaks of P15,000.00 advance rentals starting May 25, 1966 while the latter agreement also refers to advance rentals of the same amount starting May 24, 1966. There is, therefore, a duplication of reference to the P15,000.00 hence the need to provide in the subsequent document that it "cancels and supersedes" the previous one. True it is that in the latter document, it is silent as to the statement in the Joint Affidavit that the P15,000.00 represents the "capital investment" of the parties in the gasoline station business and it speaks of petitioner as the sole dealer, but this is as it should be for in the latter document SHELL was a signatory and it would be against its policy if in the agreement it should be stated that the business is a partnership with private respondents and not a sole proprietorship of petitioner.LibLexMoreover other evidence in the record shows that there was in fact such partnership agreement between the parties. This is attested by the testimonies of private respondent Remedios Estanislao and Atty. Angeles. Petitioner submitted to private respondents periodic accounting of the business.4Petitioner gave a written authority to private respondent Remedios Estanislao, his sister, to examine and audit the books of their "common business" (aming negosyo).5Respondent Remedios assisted in the running of the business.There is no doubt that the parties hereto formed a partnership when they bound themselves to contribute money to a common fund with the intention of dividing the profits among themselves.6The sole dealership by the petitioner and the issuance of all government permits and licenses in the name of petitioner was in compliance with the afore-stated policy of SHELL and the understanding of the parties of having only one dealer of the SHELL products.Further, the findings of facts of the respondent court are conclusive in this proceeding, and its conclusion based on the said facts are in accordance with the applicable law.WHEREFORE, the judgment appealed from is AFFIRMEDin totowith costs against petitioner. This decision is immediately executory and no motion for extension of time to file a motion for reconsideration shall be entertained.SO ORDERED.THIRD DIVISION[G.R. No.70926. January 31, 1989.]DAN FUE LEUNG,petitioner,vs.HON. INTERMEDIATE APPELLATE COURT and LEUNG YIU,respondents.John L. Uyfor petitioner.Edgardo F. Sundiamfor private respondent.SYLLABUS1.REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; CAUSE OF ACTION; NATURE OF ACTION IS DETERMINED BY THE FACTS CONSTITUTING THE CAUSE OF ACTION. The well-settled doctrine is that the ". . . nature of the action filed in court is determined by the facts alleged in the complaint as constituting the cause of action." (De Tavera v. Philippine Tuberculosis Society, Inc., 113 SCRA 243; Alger Electric, Inc. v. Court of Appeals, 135 SCRA 37).2.CIVIL LAW; SPECIAL CONTRACTS; PARTNERSHIP; REQUISITES. The requisites of a partnership which are 1) two or more persons bind themselves to contribute money, property, or industry to a common fund; and 2) intention on the part of the partners to divide the profits among themselves (Article 1767, Civil Code; Yulo v. Yang Chiao Cheng, 106 Phil. 110)3.ID.; ID.; ID.; OBLIGATIONS OF PARTNERS; RIGHT TO DEMAND AN ACCOUNTING EXISTS AS LONG AS PARTNERSHIP EXISTS; PRESCRIPTION BEGINS TO RUN ONLY UPON DISSOLUTION OF PARTNERSHIP WHEN FINAL ACCOUNTING IS DONE. Regarding the prescriptive period within which the private respondent may demand an accounting, Articles 1806, 1807, and 1809 show that the right to demand an accounting exists as long as the partnership exists. Prescription begins to run only upon the dissolution of the partnership when the final accounting is done.4.ID.; ID.; ID.; DISSOLUTION AND WINDING UP; LIQUIDATION AND WINDING UP OF PARTNERSHIP AFFAIRS, RETURN OF CAPITAL AND OTHER INCIDENTS OF DISSOLUTION PROPER BECAUSE CONTINUATION OF PARTNERSHIP HAS BECOME INEQUITABLE. There shall be a liquidation and winding up of partnership affairs, return of capital, and other incidents of dissolution because the continuation of the partnership has become inequitable.D E C I S I O NGUTIERREZ, JR.,Jp:The petitioner asks for the reversal of the decision of the then Intermediate Appellate Court in AC-G.R. No. CV-00881 which affirmed the decision of the then Court of First Instance of Manila, Branch II in Civil Case No. 116725 declaring private respondent Leung Yiu a partner of petitioner Dan Fue Leung in the business of Sun Wah Panciteria and ordering the petitioner to pay to the private respondent his share in the annual profits of the said restaurant.This case originated from a complaint filed by respondent Leung Yiu with the then Court of First Instance of Manila, Branch II to recover the sum equivalent to twenty-two percent (22%) of the annual profits derived from the operation of Sun Wah Panciteria since October, 1955 from petitioner Dan Fue Leung.The Sun Wah Panciteria, a restaurant, located at Florentino Torres Street, Sta. Cruz, Manila, was established sometime in October, 1955. It was registered as a single proprietorship and its licenses and permits were issued to and in favor of petitioner Dan Fue Leung as the sole proprietor. Respondent Leung Yiu adduced evidence during the trial of the case to show that Sun Wah Panciteria was actually a partnership and that he was one of the partners having contributed P4,000.00 to its initial establishment.The private respondent's evidence is summarized as follows:About the time the Sun Wah Panciteria started to become operational, the private respondent gave P4,000.00 as his contribution to the partnership. This is evidenced by a receipt identified as Exhibit "A" wherein the petitioner acknowledged his acceptance of the P4,000.00 by affixing his signature thereto. The receipt was written in Chinese characters so that the trial court commissioned an interpreter in the person of Ms. Florence Yap to translate its contents into English. Florence Yap issued a certification and testified that the translation to the best of her knowledge and belief was correct. The private respondent identified the signature on the receipt as that of the petitioner (Exhibit A-3) because it was affixed by the latter in his (private respondents's) presence. Witnesses So Sia and Antonio Ah Heng corroborated the private respondent's testimony to the effect that they were both present when the receipt (Exhibit "A") was signed by the petitioner. So Sia further testified that he himself received from the petitioner a similar receipt (Exhibit D) evidencing delivery of his own investment in another amount of P4,000.00. An examination was conducted by the PC Crime Laboratory on orders of the trial court granting the private respondent's motion for examination of certain documentary exhibits. The signatures in Exhibits "A" and "D" when compared to the signature of the petitioner appearing in the pay envelopes of employees of the restaurant, namely Ah Heng and Maria Wong (Exhibits H, H-1 to H-24) showed that the signatures in the two receipts were indeed the signatures of the petitioner.llcdFurthermore, the private respondent received from the petitioner the amount of P12,000.00 covered by the latter's Equitable Banking Corporation Check No. 13389470-B from the profits of the operation of the restaurant for the year 1974. Witness Teodulo Diaz, Chief of the Savings Department of the China Banking Corporation testified that said check (Exhibit B) was deposited by and duly credited to the private respondent's savings account with the bank after it was cleared by the drawee bank, the Equitable Banking Corporation. Another witness Elvira Rana of the Equitable Banking Corporation testified that the check in question was in fact and in truth drawn by the petitioner and debited against his own account in said bank. This fact was clearly shown and indicated in the petitioner's statement of account after the check (Exhibit B) was duly cleared. Rana further testified that upon clearance of the check and pursuant to normal banking procedure, said check was returned to the petitioner as the maker thereof.The petitioner denied having received from the private respondent the amount of P4,000.00. He contested and impugned the genuineness of the receipt (Exhibit D). His evidence is summarized as follows:The petitioner did not receive any contribution at the time he started the Sun Wah Panciteria. He used his savings from his salaries as an employee at Camp Stotsenberg in Clark Field and later as waiter at the Toho Restaurant amounting to a little more than P2,000.00 as capital in establishing Sun Wah Panciteria. To bolster his contention that he was the sole owner of the restaurant, the petitioner presented various government licenses and permits showing the Sun Wah Panciteria was and still is a single proprietorship solely owned and operated by himself alone. Fue Leung also flatly denied having issued to the private respondent the receipt (Exhibit G) and the Equitable Banking Corporation's Check No. 13389470 B in the amount of P12,000.00 (Exhibit B).As between the conflicting evidence of the parties, the trial court gave credence to that of the plaintiff's. Hence, the court ruled in favor of the private respondent. The dispositive portion of the decision reads:"WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering the latter to deliver and pay to the former, the sum equivalent to 22% of the annual profit derived from the operation of Sun Wah Panciteria from October, 1955, until fully paid, and attorney's fees in the amount of P5,000.00 and cost of suit." (p. 125, Rollo)The private respondent filed a verified motion for reconsideration in the nature of a motion for new trial and, as supplement to the said motion, he requested that the decision rendered should include the net profit of the Sun Wah Panciteria which was not specified in the decision, and allow private respondent to adduce evidence so that the said decision will be comprehensively adequate and thus put an end to further litigation.CdprThe motion was granted over the objections of the petitioner. After hearing, the trial court rendered an amended decision, the dispositive portion of which reads:"FOR ALL THE FOREGOING CONSIDERATIONS, the motion for reconsideration filed by the plaintiff, which was granted earlier by the Court, is hereby reiterated and the decision rendered by this Court on September 30, 1980, is hereby amended. The dispositive portion of said decision should read now as follows:"WHEREFORE, judgment is hereby rendered, ordering the plaintiff (sic) and against the defendant, ordering the latter to pay the former the sum equivalent to 22% of the net profit of P8,000.00 per day from the time of judicial demand, until fully paid, plus the sum of P5,000.00 as and for attorney's fees and costs of suit." (p. 150, Rollo)The petitioner appealed the trial court's amended decision to the then Intermediate Appellate Court. The questioned decision was further modified by the appellate court. The dispositive portion of the appellate court's decision reads:"WHEREFORE, the decision appealed from is modified, the dispositive portion thereof reading as follows:"1.Ordering the defendant to pay the plaintiff by way of temperate damages 22% of the net profit of P2,000.00 a day from judicial demand to May 15, 1971;"2.Similarly, the sum equivalent to 22% of the net profit of P8,000.00 a day from May 16, 1971 to August 30, 1975;"3.And thereafter until fully paid the sum equivalent to 22% of the net profit of P8,000.00 a day."Except as modified, the decision of the courta quois affirmed in all other respects. (p. 102, Rollo)Later, the appellate court, in a resolution, modified its decision and affirmed the lower court's decision. The dispositive portion of the resolution reads:"WHEREFORE, the dispositive portion of the amended judgment of the court a quo reading as follows:WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendant, ordering the latter to pay to the former the sum equivalent to 22% of the net profit of P8,000.00 per da