TORRES vs. COURT OF APPEALS

TORRES vs. COURT OF APPEALS

G.R. No. 134559,  December 9, 1999

 

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. Petitioner filed a civil case which 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 was affirmed by the CA.

Issue:

Whether or not the transaction between the petitioners and respondent was that of a partnership.

In Art. 1767of the Civil Code,  the contract of partnership of 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.

In the instant case, the Agreement entered by both parties, 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. The income from the said project would be divided according to the stipulated percentage.

Therefore,  the terms embodied in the Agreement indubitably shows the existence of a partnership pursuant to Article 1767 of the Civil Code.