Partnership: Kinds of Partnership Digests
PRIMELINK PROPERTIES AND DEVT CORP V. LAZATIN-MAGAT, G.R.
O 167379 (2006)
FACTS: Primelink is a domestic corporation engaged in real
estate development while respondents Lazatin are co-owners
of 2 parcels of land in Tagaytay. In 1994, Primelink, represented
by Lopez (President) and the Lazatins entered into a joint
venture agreement (JVA) for the development of the subject
property into a residential subdivision
1. Under the JVA, the Lazatins obliged themselves to
contribute the subject property as their share and for its
part, Primelink undertook to contribute, money, labor
personnel, machineries, equipment, etc
2. For 4 years however, Primelink failed to develop the said
land. As such, the Lazatins filed a complaint to rescind
the JVA
3. The trial court ruled in favor of the Lazatins and ordered
Primelink to return the possession of the property without
the Lazatins paying for said improvements.On appeal,
CA affirmed the same.
4. Primelink assaidled the order that turning over
improvements to the Lazatins without reimbursement is
unjust; that Lazatin did not ask the properties to be
placed under their possession but merely asked for
rescission of the JVA
ISSUE: WON the improvements made by Primelink should also be
turned over under the possession of respondent Lazatin
HELD: Yes. The order of the court for Primelink to return possession
of the real estate property belonging to Lazatin including all
improvements thereon was not a judgment that was different in
kind that what was prayed for by the Lazatins; it was just a
necessary consequence to the order of rescission.
As a general rule, the relation of the parties in joint ventures is
government by their agreement. When the agreement is silent
on any particular issue, the general principles of partnership
may be resorted to.
The legal concept of a joint venture is of common law origin. It
has generally been understood to mean an organization
formed for some temporary purpose. It is, in fact, hardly
distinguishable from partnership since elements are similar
community of interest in the business, sharing of profits and
losses, and a mutual right of control. The main distinction is that
partnership contemplates a general business with some degree
of continuity, while a joint venture is formed for the execution of
a single transaction, and is thus of a temporary nature.
With the rescission of the JVA on account of petitioners
fraudulent acts, all authority of any partner to act for the
partnership is terminated except insofar as may be necessary to
wind up the partnership affairs or to complete transactions
begun but not yet finished. On dissolution, the partnership is not
terminated but continues until the winding up of partnership
affairs is completed. Winding up means the administration of the
assets of the partnership for the purpose of terminating the
partnership and discharging the obligations of the partnership.
It must be stressed that although respondents acquired
possession of the lands and the improvements thereon, the said
lands and improvements remained partnership property,
subject to the rights and obligations of the parties under Art 1837
and 1838 NCC, and subject to the outcome of the settlement
of the accounts between the parties as provided in Art 1839,
absent any agreement of the parties in their JVA to the contrary.
Until the partnership accounts are determined, it cannot be
ascertained how much any of the parties is entitled, if at all.
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