J. Tiosejo Investment Corp. v.

Spouses Benjamin and Eleanor Ang (2010) (Meditel Condo Project) Doctrines: A joint venture is considered in this jurisdiction as a form of partnership and is accordingly, governed by the law on partnerships. Under Article 1824 of the Civil Code of the Philippines, all partners are solidarily liable with the partnership for everything chargeable to the partnership, including loss or injury caused to a third person or penalties incurred due to any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co-partners. Whether innocent or guilty, all the partners are solidarily liable with the partnership itself.

Facts: This is a petition for review seeking the reversal of the CAs Resolution declaring J Tiosejo (petitioner) solidary liable with Primetown Property Group, Inc. (PPGI) to pay Spouses Ang. J. Tiosejo entered into a Joint Venture Agreeemtn with PPGI for the development of a residential condominium project known as Meditel in Mandaluyong City. Petitioner contributed the lot while PPGI undertook to develop the condominium. The parties further agreed to a 17%83% sharing as to developed units. PPGI further undertook to use all proceeds from the preselling of its saleable units for the completion of the Condominium Project. Sometime in 1996, PPGI executed a Contract to Sell with Spouses Ang on a certain condominium unit and parking slot for P2,077,334.25 and P313,500.00, respectively. On July 1999, respondent Spouses filed before the Housing and Land Use Regulatory Board (HLURB) a complaint for the rescission of the Contract to Sell, against J. Tiosejo and PPGI. They claim that they were promised that the condo unit would be available for turn-over and occupancy by December 1998, however the project was not completed as of the said date. Spouses Ang instructed petitioner and PPGI to stop depositing the post-dated checks they issued and to cancel said Contracts to Sell. Despite several demands, petitioner and PPGI have failed and refused to refund the P611,519.52 they already paid under the circumstances. As defense, PPGI claim that the delay was attributable to the economic crisis and to force majeure (unexpected and unforeseen inflation and increase rates and cost of building materials). They also state that it offered several alternatives to Spouses Ang to transfer their investment to its other feasible projects and for the amounts they already paid to be considered as partial payment for the replacement unit/s. On a separate answer, petitioner claims that its prestation under the JVA consisted of contributing the property on which the condominium was to be contributed. Not being privy to the Contracts to Sell executed by PPGI and respondents, it did not receive any portion of the payments made by the latter; and, that without any contributory fault and negligence on its part, PPGI (and not the petitioner) breached its undertakings under the JVA by failing to complete the condominium project. The Housing and Land Use (HLU) ruled in favor of respondents, rescinding the contract and ordering petitioner and PPGI to pay refund, interest, damages, attorneys fees and administrative fines.

The HLURB Board of Commissioners affirmed the HLUs order. Motio n for Reconsideration (MR) was denied The case was subsequently raised to the Office of the President (OP) which rendered a decision dismissing petitioners appeal on the ground that the latters appeal memorandum was filed out of time and that the HLURB Board committed no grave abuse of discretion in rendering the appealed decision. MR was also denied. Petitioner filed before the CA a motion for extension within which to file its petition for review, claiming heavy workload of its counsel. This was denied by the CA. MR was denied for lack of merit. Issues: 1. W/N the CA erred in dismissing the petition on mere technicality. 2. JV Related: - W/N the CA erred in affirming the HLURBs decision insofar as it found J. Teosejos with PPGI to pay Spouses Ang. Held/Ratio: 1. NO, while the dismissal of an appeal on purely technical grounds is concededly frowned upon, it bears emphasizing that the procedural requirements of the rules on appeal are not harmless and trivial technicalities that litigants can just discard and disregard at will. In view of the initial 15-day extension granted by the CA and the injunction under Sec. 4, Rule 43 of the 1997 Rules of Civil Procedure against further extensions except for the most compelling reason, it was clearly inexcusable for petitioner to expediently plead its counsels heavy workload as ground for seeking an additional extension of 10 days within which to file its petition for review. 2. NO, the HLURB Arbiter and Board correctly held petitioner liable alongside PPGI for respondents claims and the administrative fine. By express terms of the JVA, it appears that petitioner not only retained ownership of the property pending completion of the condominium project but had also bound itself to answer liabilities proceeding from contracts entered into by PPGI with third parties. Article VIII, Section 1 of the JVA distinctly provides as follows: Section 1: Rescission and damages: xxx In any case, the Owner shall respect and strictly comply with any covenant entered into by the Developer and third parties with respect to any of its units in the Condominium Project. To enable the owner to comply with this contingent liability, the Developer shall furnish the Owner with a copy of its contracts with the said buyers on a month-to-month basis. xxx

Viewed in the light of the foregoing provision of the JVA, petitioner cannot avoid liability by claiming that it was not in any way privy to the Contracts to Sell executed by PPGI and respondents. Moreover, a joint venture is considered in this jurisdiction as a form of partnership and is, accordingly, governed by the law of partnerships. Under Article 1824 of the Civil Code of the Philippines, all partners are solidarily liable with the partnership for everything chargeable to the partnership, including loss or injury caused to a third person or penalties incurred due to any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co- partners. Whether innocent or guilty, all the partners are solidarily liable with the partnership itself. JARANTILLA, JR. vs. JARANTILLA 636 SCRA 299, G.R. No. 154486, December 1, 2010, Leonardo-De Castro, J.: p

FACTS: The present case stems from the complaintfiled by Antonieta Jarantilla against Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla and Tomas Jarantilla, for the accounting of the assets and income of the co-ownership, for its partition and the delivery of her share corresponding to eight percent (8%), and for damages. Antonieta claimed that in 1946, she had entered into an agreement with the defendants to engage in business through the execution of a document denominated as "Acknowledgement of Participating Capital. Antonieta also alleged that she had helped in the management of the business they co-owned without receiving any salary. Antonieta further claimed co-ownership of certain properties (the subject real properties) in the name of the defendants since the only way the defendants could have purchased these properties were through the partnership as they had no other source of income. The respondents did not deny the existence and validity of the "Acknowledgement of Participating Capital" and in fact used this as evidence to support their claim that Antonietas 8% share was limited to the businesses enume rated therein. The respondents denied using the partnerships income to purcha se the subject real properties. During the course of the trial at the RTC, petitioner Federico Jarantilla, Jr., who was one of the original defendants, entered into a compromise agreement17 with Antonieta Jarantilla wherein he supported Antonietas claims and asserted that he too was entitled to six percent (6%) of the supposed partnership in the same manner as Antonieta was. ISSUE: Whether or not the partnership subject of the Acknowledgement of Participating Capital funded the subject real properties. HELD: Under Article 1767 of the Civil Code, there are two essential elements in a contract of partnership: (a) an agreement to contribute money, property or industry to a common fund; and (b) intent to divide the profits among the contracting parties . The first element is undoubtedly present in the case at bar, for, admittedly, all the parties in this case have agreed to, and did, contribute money and property to a common fund. Hence, the issue narrows down to their intent

in acting as they did. It is not denied that all the parties in this case have agreed to contribute capital to a common fund to be able to later on share its profits. They have admitted this fact, agreed to its veracity, and even submitted one common documentary evidence to prove such partnership - the Acknowledgement of Participating Capital. The petitioner himself claims his share to be 6%, as stated in the Acknowledgement of Participating Capital. However, petitioner fails to realize that this document specifically enumerated the businesses covered by the partnership: Manila Athletic Supply, Remotigue Trading in Iloilo City and Remotigue Trading in Cotabato City. Since there was a clear agreement that the capital the partners contributed went to the three businesses, then there is no reason to deviate from such agreement and go beyond the stipulations in the document. There is no evidence that the subject real properties were assets of the partnership referred to in the Acknowledgement of Participating Capital. Petition denied.

HEIRS OF JOSE LIM, represented by ELENITO LIM vs. JULIET VILLA LIM G.R. No. 172690, March 3, 2010 NACHURA, J.: FACTS: Petitioners are the heirs of the late Jose Lim (Jose). They filed a Complaint for Partition, Accounting and Damages against respondent Juliet Villa Lim (respondent), widow of the late Elfledo Lim (Elfledo), who was the eldest son of Jose and Cresencia. Petitioners alleged that Jose was the liaison officer of InterwoodSawmill in Cagsiay, Mauban, Quezon. Sometime in 1980, Jose, together with his friends Jimmy Yu (Jimmy) and Norberto Uy (Norberto), formed a partnership to engage in the trucking business. Initially, with a contribution of P50,000.00 each, they purchased a truck to be used in the hauling and transport of lumber of thesawmill. Jose managed the operations of this trucking business until his death on August 15, 1981. Thereafter, Jose's heirs, including Elfledo, and partners agreed to continue the business under the management of Elfledo. The shares in the partnership profits and income that formed part of the estate of Jose were held in trust by Elfledo, with petitioners' authority for Elfledo to use, purchase oracquire properties using said funds. Petitioners alleged that Elfledo was never a partner or an investor in the business and merely supervised the purchase of additional trucks using the income from the trucking business of the partners. On May 18, 1995, Elfledo died, leaving respondent as his sole surviving heir. Petitioners claimed that respondent took over the administration of the aforementioned properties, which belonged to the estate of Jose, without their consent and approval. Claiming that they are co-owners of the properties, petitioners required respondent to submit an accounting of all income, profits and rentals received from the estate of Elfledo, and to surrender the administration thereof. Respondent refused; thus, the filing of this case.

Respondent traversed petitioners' allegations and claimed that Elfledo was himself a partner of Norberto and Jimmy. Respondent also alleged that when Jose died in 1981, he left no known assets, and the partnership with Jimmy and Norberto ceased upon his demise. Respondent also stressed that Jose left no properties that Elfledo could have held in trust. Respondent maintained that all the properties involved in this case were purchased and acquired through her and her husbands joint efforts and hard work, and without any participation or contribution from petitioners or from Jose. ISSUE: Whether or not a partnership exists. HELD: YES. A partnership exists when two or more persons agree to place their money, effects, labor, and skill in lawful commerce or business, with the understanding that there shall be a proportionate sharing of the profits and losses among them. A contract of partnership is defined by the Civil Code as one where two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.

The following circumstances tend to prove that Elfledo was himself the partner of Jimmy and Norberto: 1) Cresencia testified that Jose gave Elfledo P50,000.00, as share in the partnership, on a date that coincided with the payment of the initial capital in the partnership; (2) Elfledo ran the affairs of the partnership, wielding absolute control, power and authority, without any intervention or opposition whatsoever from any of petitioners herein; (3) all of the properties were registered in the name of Elfledo; (4) Jimmy testified that Elfledo did not receive wages or salaries from the partnership, indicating that what he actually received were shares of the profits of the business; and (5) none of the petitioners, as heirs of Jose, the alleged partner, demanded periodic accounting from Elfledo during his lifetime.