ANTONIA TORRES, ANGELO TORRES & EMETERIA BARING VS.

COURT OF APPEALS & MANUEL TORRES

G.R. No. 134559, December 9, 1999

FACTS: Sisters Torres and Emeteria Baring entered into a joint venture agreement with Manuel
Torres for the development of a parcel of land into a subdivision. Thus, the petitioners sold the
land in favor of the respondent Torres who then registered the land in his name. No inventory
was made and attached to the public instrument. Consequently, Torres mortgaged the property
for a loan, and used the loan to develop the subdivision surveying the land, and constructing
roads, curbs, and gutters. Ultimately, the development plan failed and the land was foreclosed.
The petitioners then tried to file a civil claim to relieve themselves of their obligations but were
denied by the court for having formed a partnership saying that they should bear the loss as a
partner pursuant to Art. 1797 of the NCC. The petitioners however contend that no partnership
was formed due to the joint venture agreement and the execution of the deed of sale.
Furthermore, they also contend that the joint venture agreement was void pursuant to Art. 1773

ISSUE: Is there a partnership formed due to joint venture and execution of deed sale? Does the
joint venture void pursuant to Article 1773?

RULING: Yes. The Court held that a partnership was formed because such essential elements
are present. Furthermore, the respondent cannot be said to have made no contribution to the
partnership since a partner may not only contribute money or property, but also industry.
Furthermore, Art. 1773 cannot apply because in this case, it is intended to protect third persons
so that the latter would not be prejudiced in case they are defrauded with the partnership in the
belief in the efficacy of the guaranty in which immovable may consist.