Case Digest (G.R. No. 134559) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
On March 5, 1969 in Cebu City, Philippines, Antonia Torres, assisted by her husband Angelo Torres, and Emeteria Baring (hereinafter the petitioners) entered into a Joint Venture Agreement with Manuel Torres (respondent) for the development of their 17,009-square-meter parcel in Lapu-Lapu City (Lot No. 1368, TCT No. T-0184). Pursuant to this pact, the petitioners executed a Deed of Sale conveying title to respondent, who registered ownership, mortgaged the land with Equitable Bank to secure a ₱40,000 loan, and used the proceeds—allegedly for surveying, subdivision, road works, curb and gutter construction, city council approval, advertising, and contracting for low-cost housing—to the tune of ₱85,000. When the subdivision failed, petitioners and relatives annotated adverse claims on the title, scaring off buyers, and the bank foreclosed the property. The sisters first filed and lost a criminal estafa case against respondent; they then sued civilly in RTC Cebu (Civil Case No. R-21 Case Digest (G.R. No. 134559) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Contract Formation
- Antonia Torres and Emeteria Baring (“petitioners”) entered into a “Joint Venture Agreement” dated March 5, 1969, with Manuel R. Torres (“respondent”) for the development of a 17,009 sqm parcel of land in Lapu-Lapu City into a subdivision.
- Under the Agreement:
- Petitioners executed an absolute Deed of Sale for 1,700 sqm of the land in favor of respondent (P25,513.50), which they did not actually receive.
- Respondent advanced P20,000 for development costs, to be deducted from eventual sales proceeds.
- All general expenses were to be borne exclusively by respondent.
- Net sales proceeds were to be divided 60% to petitioners and 40% to respondent.
- Implementation and Breakdown of the Project
- Respondent mortgaged the property to Equitable Bank, securing a P40,000 loan, and used it to survey, subdivide, construct roads, curbs, gutters, and model low-cost housing units (total expense P85,000).
- Petitioners and relatives annotated adverse claims on the title, allegedly scaring away buyers. Project stalled and bank foreclosed the land.
- Procedural History
- Petitioners filed a civil case for damages; respondent counterclaimed. RTC of Cebu City dismissed both complaint and counterclaims on September 6, 1982.
- On appeal, the RTC judgment was remanded; subsequently, the RTC again ruled for respondent.
- The Court of Appeals (Second Division) in CA-GR CV No. 42378 (March 5, 1998) affirmed dismissal, holding a partnership existed and losses shared in agreed proportions. Reconsideration denied (June 25, 1998).
- Petitioners filed this Petition for Review on Certiorari under Rule 45, assailing the CA’s classification of the transaction as a partnership and its application of Articles 1767, 1773, and 1797 of the Civil Code.
Issues:
- Whether the Joint Venture Agreement constituted a partnership under Article 1767 of the Civil Code.
- Whether the absence of an inventory of the contributed immovable property voids the partnership under Article 1773.
- Whether the contract is void as directly resulting from an earlier illegal contract under Article 1422.
- Whether petitioners are entitled to damages equivalent to 60% of the property’s value for respondent’s alleged breach.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)