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    Megaworld V Majestic Finance

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    Angeli Campaner
    The petitioner Megaworld and respondent Majestic Finance entered a JVA for Megaworld to develop Majestic's land into a residential subdivision. Under the agreement, the parties had reciprocal obligations to perform simultaneously. Majestic later demanded Megaworld provide round-the-clock security, but the court ruled Majestic failed to prove it had fulfilled its own obligations under the JVA, so Megaworld was not required to provide security as the obligations were reciprocal and conditional on each party's performance.

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    Megaworld V Majestic Finance

    Uploaded by

    Angeli Campaner
    473 views2 pages
    The petitioner Megaworld and respondent Majestic Finance entered a JVA for Megaworld to develop Majestic's land into a residential subdivision. Under the agreement, the parties had reciprocal obligations to perform simultaneously. Majestic later demanded Megaworld provide round-the-clock security, but the court ruled Majestic failed to prove it had fulfilled its own obligations under the JVA, so Megaworld was not required to provide security as the obligations were reciprocal and conditional on each party's performance.

    Original Description:

    Obligations and Contracts

    Original Title

    Megaworld v Majestic Finance

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    The petitioner Megaworld and respondent Majestic Finance entered a JVA for Megaworld to develop Majestic's land into a residential subdivision. Under the agreement, the parties had reciprocal obligations to perform simultaneously. Majestic later demanded Megaworld provide round-the-clock security, but the court ruled Majestic failed to prove it had fulfilled its own obligations under the JVA, so Megaworld was not required to provide security as the obligations were reciprocal and conditional on each party's performance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    473 views2 pages

    Megaworld V Majestic Finance

    Uploaded by

    Angeli Campaner
    The petitioner Megaworld and respondent Majestic Finance entered a JVA for Megaworld to develop Majestic's land into a residential subdivision. Under the agreement, the parties had reciprocal obligations to perform simultaneously. Majestic later demanded Megaworld provide round-the-clock security, but the court ruled Majestic failed to prove it had fulfilled its own obligations under the JVA, so Megaworld was not required to provide security as the obligations were reciprocal and conditional on each party's performance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Megaworld v Majestic Finance

    Facts:
     Megaworld entered into a JVA with Majestic finance for the development of the
    residential subdivision
     The land belonging to Majestic would be for the sole account of Megaworld, and upon
    completion, Majestic would compensate Megaworld in the form of saleable residential
    subdivision lots.
     Megaworld would advance all the costs for relocation and resettlement of the occupants
    of the joint venture property subject to reimbursement by Majestic
     Megaworld would deposit 10M to defray the expense of relocation and resettlement
     Sept 1994, Megaworld and Majestic agreed to increase the initial deposit to 60M
     October 1994, Megaworld, by deed of assignment, transferred to Empire East Land
    Holdings, all its rights and obligations
     Sept 2002, Majestic filed in the RTC praying that Megaworld and Empire East would
    provide round the clock security to defend the invasion of unauthorized persons

    Majestic’s arguments
     Empire East and Megaworld failed to comply with their obligations under the JVA,
    including the obligation to maintain a strong security force to safeguard the entire JV
    prop
    Issue:
    WON the petitioners should be compelled to provide security as demanded by the respondent.

    Ruling:
     The obligations of the parties under the JVA were unquestionably reciprocal. Reciprocal
    obligations are those that arise from the same cause, and in which each party is a debtor
    and a creditor of the other at the same time, such that the obligations of one are dependent
    upon the obligations of the other. They are to be performed simultaneously, so that the
    performance by one is conditioned upon the simultaneous fulfillment by the other.
     The first type related to the continuous obligations that would be continuously performed
    from the moment of the execution of the JVA until the parties shall have achieved the
    purpose of their joint venture. The second type referred to the activity obligations
     In each activity, the obligation of each party was dependent upon the obligation of the
    other. Although their obligations were to be performed simultaneously, the performance
    of an activity obligation was still conditioned upon the fulfillment of the continuous
    obligation, and vice versa.
     Should either party cease to perform a continuous obligation, the other’s subsequent
    activity obligation would not accrue. Conversely, if an activity obligation was not
    performed by either party, the continuous obligation of the other would cease to take
    effect.
     The performance of the continuous obligation was subject to the resolutory condition that
    the precedent obligation of the other party, whether continuous or activity, was fulfilled
    as it became due. Otherwise, the continuous obligation would be extinguished.
     According to Article 1184 of the Civil Code, the condition that some event happen at a
    determinate time shall extinguish the obligation as soon as the time expires, or if it has
    become indubitable that the event will not take place.
     Here, the common cause of the parties in entering into the joint venture was the
    development of the joint venture property into the residential subdivision as to eventually
    profit therefrom.
     Consequently, all of the obligations under the JVA were subject to the happening of the
    complete development of the joint venture property, or if it would become indubitable
    that the completion would not take place, like when an obligation, whether continuous or
    activity, was not performed.
     Every single obligation of each party under the JVA rested on the common cause of
    profiting from the developed subdivision.
     The record is bereft of the proof to support that the owner had already performed its
    correlative obligation under the JVA as to place itself in the position to demand that the
    developer should already perform its obligation of providing the round-the-clock security
    on the property.

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