Case Digest (G.R. No. 134559)
Facts:
Antonia Torres, Assisted by Her Husband, Angelo Torres; and Emeteria Baring, Petitioners, v. Court of Appeals and Manuel Torres, Respondents, G.R. No. 134559, December 09, 1999, Supreme Court Third Division, Panganiban, J., writing for the Court.The petitioners, sisters Antonia Torres and Emeteria Baring, entered into a written "Joint Venture Agreement" with Manuel Torres for the development of a parcel of land in Lapu‑Lapu City into a subdivision. Pursuant to the agreement the sisters executed a Deed of Sale in favor of Manuel Torres and the title was registered in his name; Torres then mortgaged the property to Equitable Bank and obtained a loan (noted in the record as about P40,000) which, according to the parties’ agreement, was to be used for development. The joint venture provided that proceeds from the sale of subdivided lots would be split 60% to the petitioners and 40% to Torres.
Torres undertook surveying and subdivision work, procured local council approval, advertised the project, constructed roads, curbs and gutters, contracted an engineering firm for 60 low‑cost housing units, and erected a model house — expenditures the record places at about P85,000. The project nevertheless failed and the bank foreclosed the property. Petitioners alleged Torres diverted funds to his own company, Universal Umbrella Company; Torres countered that petitioners and their relatives annotated adverse claims on the title, scaring off buyers.
Petitioners filed a criminal complaint for estafa against Torres and his wife but they were acquitted. They then filed the present civil action. The trial court initially dismissed the complaint (Order dated September 6, 1982); the appellate court remanded for further proceedings. The Regional Trial Court (RTC), in Civil Case No. R‑21208 (Cebu City), thereafter rendered a decision dismissing the plaintiffs' complaint and dismissing the defendant's counterclaims. The Court of Appeals (Second Division) in CA‑GR CV No. 42378 affirmed the RTC in a March 5, 1998 Decision and denied reconsideration in a June 25, 1998...(Subscriber-Only)
Issues:
- Did the instruments and parties' conduct create a partnership/joint venture between the petitioners and Manuel Torres?
- If a partnership existed, is that partnership void for lack of an attached inventory of contributed immovable property under Article 1773 of the Civil Code?
- Was the Joint Venture Agreement void as the direct result of an earlier illegal contract under Article 1422 of the Civil Code?
- Are petitioners entitled to damages equal to 60% of the value of the property based on respond...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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