ANTONIA TORRES assisted by her husband, ANGELO

TORRES and EMETERIA BARING, petitioners, vs.

COURT OF APPEALS and MANUEL TORRES,
respondents.
FACTS:
Who:
1) Antonia Torres and Emeteria Baring:
Sisters,
What happened:
2) Entered to JOINT VENTURE AGREEMENT with respondent.
Purpose: Development of a parcel of land (17, 009 sq. m) into a
subdivision
3) Executed Deed of Sale with respondent who then Mortgaged property for
development (worth Php40K)
4) All three agreed to share proceeds
5) Land foreclosed as project did not push through
CONTENTIONS:
1) Petitioners:
a. project failed because of “respondent’s lack of funds or means and
skills.”
b. Respondent used loan for furtherance of his own company Universal
Umbrella Co. not for subdivision development
2) Respondent:
a. Used loan to implement agreement; effect survey and subdivision of
the lots; construction of roads; setup model house on one of
subdivision lots all for Php 80K)
b. Petitioners and their relatives had separately caused the annotations of
adverse claims on the title to the land, which eventually scared away
prospective buyers.
ACTION:
1) Petitioners filed Estafa – but acquitted respo; thereafter present Civil Case
RTC Ruling:
1) Motion to dismiss of respondent granted
2) CA remanded case to RTC for further proceedings
CA Ruling:
1) Affirmed RTC ruling
2) Both parties had formed a partnership for the development of the subdivision
3) Losses should be distributed equally in accordance with contribution provided
by Art 1797.
4) Furthermore, in the absence of stipulation, the share of each partner in the
profits and losses shall be in proportion to what he may have contributed bu
the industrial partner shall not be liable for the losses. Capital: services.
ISSUE: W/N parties’ relationship was that of a joint venture/partnership.

SC RULING: YES.

Discussion: Accdg to Art. 1767 of NCC:

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.

1) Petitioner’s contribution is in form of land

2) Respondent’s contribution is in form of industry

Under 1315 of NCC on contracts:

Contracts bind the parties not only to what has been expressly stipulated but also
to all necessary consequences accdg to the nature in keeping with good faith, usage and
law.

Art 1773, as basis by petitioners that contract is void, was intended primarily to
protect third parties from fraud thus the inventory. On the case at bar, there are no third
parties involved. Petitioners cannot deny the contract and then recognize it in accordance
to what suits their purpose.
The nullity of partnership will not prevent courts from considering the joint
venture agreement an ordinary contract.

Art 1422, basis that contract is void, due to lack of valid consideration, is
misplaced. The consideration in the contract is the expectation of profits from the
subdivision project.

PETITIONERS NOT ENTITLED TO DAMAGES. CA’ factual findings absolved respondent of

fault. Petitioners have not alleged nor shown SC that their petition consists one of the exceptions
for review of facts.