JOSEFINA P. REALUBIT vs. PROSENCIO D. JASO and EDENG JASOG.R. No. 178782           September 21, 2011

FACTSPetitioner Josefina Realubit entered into a Joint Venture Agreement with Francis Eric Amaury

Biondo, a French national, for the operation of an ice manufacturing business. With Josefina as the industrial partner and Biondo as the capitalist partner, the parties agreed that they would each receive 40% of the net profit, with the remaining 20% to be used for the payment of the ice making machine which was purchased for the business. For and in consideration of the sum of P500,000.00, however, Biondo subsequently executed a Deed of Assignmenttransferring all his rights and interests in the business in favor of respondent Eden Jaso, the wife of respondent Prosencio Jaso. With Biondo’s eventual departure from the country, the Spouses Jaso caused their lawyer to send Josefina a letter apprising her of their acquisition of said Frenchmans share in the business and formally demanding an accounting and inventory thereof as well as the remittance of their portion of its profits.

Faulting Josefina with unjustified failure to heed their demand, the Spouses Jaso commenced the instant suit for specific performance, accounting, examination, audit and inventory of assets and properties, dissolution of the joint venture, appointment of a receiver and damages. The said complaint alleged that the Spouses Realubit had no gainful occupation or business prior to their joint venture with Biondo and that aside from appropriating for themselves the income of the business, they have fraudulently concealed the funds and assets thereof thru their relatives, associates or dummies. The Spouses Realubit claimed that they have been engaged in the tube ice trading business under a single proprietorship even before their dealings with Biondo.

The RTC rendered its Decision discounting the existence of sufficient evidence from which the income, assets and the supposed dissolution of the joint venture can be adequately reckoned.  Upon the finding, however, that the Spouses Jaso had been nevertheless subrogated to Biondos rights in the business in view of their valid acquisition of the latters share as capitalist partner. On appeal before the CA, the foregoing decision was set asideupon the following findings that the Spouses Jaso validly acquired Biondos share in the business which had been transferred to and continued its operations and not dissolved as claimed by the Spouses Realubit.

ISSUES1.       Whether there was a valid assignment or rights to the joint venture2.       Whether the joint venture is a contract of partnership3.       Whether Jaso acquired the title of being a partner based on the Deed of Assignment

RULING1.       Yes. As a public document, the Deed of Assignment Biondo executed in favor of Eden not only enjoys a presumption of regularity but is also considered prima facie evidence of the facts therein stated.  A party assailing the authenticity and due execution of a notarized document is, consequently, required to present evidence that is clear, convincing and more than merely preponderant. In view of the Spouses Realubits failure to discharge this onus, we find that both the RTC and the CA correctly upheld the authenticity and validity of said Deed of Assignment upon the combined strength of the above-discussed disputable presumptions and the testimonies elicited from Eden and Notary Public Rolando Diaz.

2.       Yes. Generally understood to mean an organization formed for some temporary purpose, a joint venture is likened to a particular partnership or one which has for its object determinate things, their use or fruits, or a specific undertaking, or the exercise of a profession or vocation. The rule is settled that joint ventures are governed by the law on partnerships which are, in turn, based on mutual agency or delectus personae.

3.       No. It is evident that the transfer by a partner of his partnership interest does not make the assignee of such interest a partner of the firm, nor entitle the assignee to interfere in the management of the partnership business or to receive anything except the assignees profits. The assignment does not purport to transfer an interest in the partnership, but only a future contingent right to a portion of the ultimate residue as the assignor may become entitled to receive by virtue of his proportionate interest in the capital. Since a partner’s interest in the partnership includes his share in the profits, we find that the CA committed no reversible error in ruling that the Spouses Jaso are entitled to Biondos share in the profits, despite Juanitas lack of consent to the assignment of said Frenchmans interest in the joint venture. Although Eden did not, moreover, become a partner as a consequence of the assignment and/or acquire the right to require an accounting of the partnership business, the CA correctly granted her prayer for dissolution of the joint venture conformably with the right granted to the purchaser of a partner’s interest under Article 1831 of the Civil Code.

Antonio C. Goquilay, ET AL. vs. Washington Z. Sycip, ET AL. GR NO. L-11840, December 10, 1963 

FACTS:  Tan Sin An and Goquiolay entered into a general commercial partnership under the partnership name “Tan Sin An and Antonio Goquiolay” for the purpose of dealing in real estate. The agreement lodged upon Tan Sin An the sole management of the partnership affairs. The lifetime of the partnership was fixed at ten years and the Articles of Co-partnership stipulated that in the event of death of any of the partners before the expiration of the term, the partnership will not be dissolved but will be continued by the heirs or assigns of the deceased partner. But the partnership could be dissolved upon mutual agreement in writing of the partners. Goquiolay executed a GPA in favor of Tan Sin An. The plaintiff partnership purchased 3 parcels of land which was mortgaged to “La Urbana” as payment of P25,000. Another 46 parcels of land were purchased by Tan Sin An in his individual capacity which he assumed payment of a mortgage debt for P35K. A downpayment and the amortization were advanced by Yutivo and Co. The two obligations were consolidated in an instrument executed by the partnership and Tan Sin An, whereby the entire 49 lots were mortgaged in favor of “Banco Hipotecario”Tan Sin An died leaving his widow, Kong Chai Pin and four minor children. The widow subsequently became the administratrix of the estate. Repeated demands were made by Banco Hipotecario on the partnership and on Tan Sin An. Defendant Sing Yee, upon request of defendant Yutivo Sons , paid the remaining balance of the mortgage debt, the mortgage was cancelled Yutivo Sons and Sing Yee filed their claim in the intestate proceedings of Tan Sin An for advances, interest and taxes paid in amortizing and discharging their obligations to “La Urbana” and “Banco Hipotecario.” Kong Chai Pin filed a petition with the probate court for authority to sell all the 49 parcels of land. She then sold it to Sycip and Lee in consideration of P37K and of the vendees assuming payment of the claims filed by Yutivo Sons and Sing Yee. Later, Sycip and Lee executed in favor of Insular Development a deed of transfer covering the 49 parcels of land.When Goquiolay learned about the sale to Sycip and Lee, he filed a petition in the intestate proceedings to set aside the order of the probate court approving the sale in so far as his interest over the parcels of land sold was concerned. Probate court annulled the sale executed by the administratrix w/ respect to the 60% interest of Goquiolay over the properties Administratrix appealed.The decision of probate court was set aside for failure to include the indispensable parties. New pleadings were filed. The second amended complaint prays for the annulment of the sale in favor of Sycip and Lee and their subsequent conveyance to Insular Development. The complaint was dismissed by the lower court hence this appeal. ISSUE/S: Whether or not a widow or substitute become also a general partner or only a limited partner. Whether or not the lower court err in holding that the widow succeeded her husband Tan Sin An in the

sole management of the partnership upon Tan’s death Whether or not the consent of the other partners was necessary to perfect the sale of the partnership properties to Sycip and Lee?  HELD: Kong Chai Pin became a mere general partner. By seeking authority to manage partnership property, Tan Sin An’s widow showed that she desired to be considered a general partner. By authorizing the widow to manage partnership property (which a limited partner could not be authorized to do), Goqulay recognized her as such partner, and is now in estoppel to deny her position as a general partner, with authority to administer and alienate partnership property. The articles did not provide that the heirs of the deceased would be merely limited partners; on the contrary, they expressly stipulated that in case of death of either partner, “the co partnership will have to be continued” with the heirs or assignees. It certainly could not be continued if it were to be converted from a general partnership into a limited partnership since the difference between the two kinds of associations is fundamental, and specially because the conversion into a limited association would leave the heirs of the deceased partner without a share in the management. Hence, the contractual stipulation actually contemplated that the heirs would become general partners rather than limited ones.

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 CA’s 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 pre-selling 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, attorney’s fees and administrative fines.

The HLURB Board of Commissioners affirmed the HLU’s order. Motion for Reconsideration (MR) was denied

The case was subsequently raised to the Office of the President (OP) which rendered a decision dismissing petitioner’s appeal on the ground that the latter’s 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 HLURB’s decision insofar as it found J. Teosejo’s

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 counsel’s 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.

MUÑASQUE v. CA

G.R. No. L-39780; November 11, 1985

FACTS:

Elmo Muñasque filed a complaint for payment of sum of money and damages against respondents Celestino Galan, Tropical Commercial, Co., Inc. (Tropical) and Ramon Pons, alleging that the petitioner entered into a contract with respondent Tropical through its Cebu Branch Manager Pons for remodeling a portion of its building without exchanging or expecting any consideration from Galan although the latter was casually named as partner in the contract; that by virtue of his having introduced the petitioner to the employing company (Tropical), Galan would receive some kind of compensation in the form of some percentages or commission.

Tropical agreed to give petitioner the amount of P7,000.00 soon after the construction began and thereafter the amount of P6,000.00 every fifteen (15) days during the construction to make a total sum of P25,000.00.

On January 9, 1967, Tropical and/or Pons delivered a check for P7,000.00 not to the plaintiff but to a stranger to the contract, Galan, who succeeded in getting petitioner's indorsement on the same check persuading the latter that the same be deposited in a joint account.

On January 26, 1967, when the second check for P6,000.00 was due, petitioner refused to indorse said check presented to him by Galan but through later manipulations, respondent Pons succeeded in changing the payee's name to Galan and Associates, thus enabling Galan to cash the same at the Cebu Branch of the Philippine Commercial and Industrial Bank (PCIB) placing the petitioner in great financial difficulty in his construction business and subjecting him to demands of creditors to pay for construction materials, the payment of which should have been made from the P13,000.00 received by Galan.

Due to the unauthorized disbursement by respondents Tropical and Pons of the sum of P13,000.00 to Galan, petitioner demanded that said amount be paid to him by respondents under the terms of the written contract between the petitioner and respondent company.

ISSUE:

Whether there was a breach of trust when Tropical disbursed the money to Galan instead of Muñasque

HELD:

No, there was no breach of trust when Tropical disbursed the money to Galan instead of Muñasque.

The Supreme Court held that there is nothing in the records to indicate that the partnership organized by the two men was not a genuine one. A falling out or misunderstanding between the partners does not convert the partnership into a sham organization.

In the case at bar the respondent Tropical had every reason to believe that a partnership existed between the petitioner and Galan and no fault or error can be imputed against it for making payments to "Galan and Associates" and delivering the same to Galan because as far as it was concerned, Galan was a true partner with real authority to transact on behalf of the partnership with which it was dealing.