Facts:
Sisters
Antonia Torres and Emeteria Baring, herein petitioners, entered into a
"joint venture agreement" with Respondent Manuel Torres for the
development of a parcel of land into a subdivision. Pursuant to the contract,
they executed a Deed of Sale covering the said parcel of land in favor of
respondent, who then had it registered in his name. By mortgaging the property,
respondent obtained from Equitable Bank a loan of P40,000 which, under the
Joint Venture Agreement, was to be used for the development of the subdivision.
All three of them also agreed to share the proceeds from the sale of the
subdivided lots.
The
project did not push through, and the land was subsequently foreclosed by the
bank.According
to petitioners, the project failed because of "respondent's lack of funds
or means and skills." They add that respondent used the loan not for the
development of the subdivision, but in furtherance of his own company,
Universal Umbrella Company.
On the
other hand, respondent alleged that he used the loan to implement the
Agreement. With the said amount, he was able to effect the survey and the
subdivision of the lots. He secured the Lapu Lapu City Council's approval of
the subdivision project which he advertised in a local newspaper. He also
caused the construction of roads, curbs and gutters. Likewise, he entered into
a contract with an engineering firm for the building of sixty low-cost housing
units and actually even set up a model house on one of the subdivision lots. He
did all of these for a total expense of P85,000.
Respondent
claimed that the subdivision project failed, however, because petitioners and
their relatives had separately caused the annotations of adverse claims on the
title to the land, which eventually scared away prospective buyers. Despite his
requests, petitioners refused to cause the clearing of the claims, thereby
forcing him to give up on the project.
Subsequently,
petitioners filed a criminal case for estafa against respondent and his wife,
who were however acquitted. Thereafter, they filed the present civil case
which, upon respondent's motion, was later dismissed by the trial court in an
Order dated September 6, 1982. On appeal, however, the appellate court remanded
the case for further proceedings. Thereafter, the RTC issued its assailed
Decision, which, as earlier stated, was affirmed by the CA.
Petitioners
deny having formed a partnership with respondent. They contend that the Joint
Venture Agreement and the earlier Deed of Sale, both of which were the bases of
the appellate court's finding of a partnership, were void.
Issue:
whether or not partnership was intended by the parties.
Held:
Yes the
parties intention was to form a partnership. Under the joint venture agreement,
petitioners would contribute property to the partnership in the form of land
which was to be developed into a subdivision; while respondent would give, in
addition to his industry, the amount needed for general expenses and other
costs. Furthermore, the income from the said project would be divided according
to the stipulated percentage. Clearly, the contract manifested the intention of
the parties to form a partnership.
Courts
are not authorized to extricate parties from the necessary consequences of
their acts, and the fact that the contractual stipulations may turn out to be
financially disadvantageous will not relieve parties thereto of their
obligations. They cannot now disavow the relationship formed from such
agreement due to their supposed misunderstanding of its terms.
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