J. Tiosejo Investment Corp. v.

Spouses Benjamin and Eleanor

Ang
G.R. No. 174149, September 8, 2010
Facts:
In this case, the petitioners seek the reversal of the CAs
Resolution declaring J. Tiosejo Investment Corp. solidarily liable with
Primetown Property Group, Inc. (PPGI) to pay Spouses Benjamin and
Eleanor Ang their refund for their payments plus legal interest until fully
paid and damages.
J. Tiosejo entered into a Joint Venture Agreement with PPGI for the
development of a residential condominium project known as Meditel in
Mandaluyong City. Petitioner contributed the lot while PPGI undertook to
develop the condominium. The parties further agreed to a 17%-83% sharing
as to developed units.
PPGI further undertook to use all proceeds from pre-selling of its
saleable units for the completion of the Condominium Project. Sometime in
1996, PPGI executed a Contract to Sell with Spouses Ang on a certain
condominium unit and parking slot for P2,077,334.25 and P313,500.00,
respectively. On July 1999, respondent Spouses fi led before the
Housing and Land Use Regulatory Board(HLURB) a complaint for
the rescission of the Contract to Sell, against J. Tiosejo and PPGI.
They claim that they were promised that the condo unit would be
available for turn-over and occupancy by December 1998, however
the project was not completed as of the said date. Spouses Ang
instructed petitioner and PPGI to stop depositing the post-dated checks
they issued and to cancel said Contracts to Sell. Despite several
demands, petitioner and PPGI have failed and refused to refund
the P611,519.52 they already paid under the circumstances.
As defense, PPGI claim that the delay was attributable to the
economic crisis and to force majeure (unexpected and unforeseen
infl ation and increase rates and cost of building materials). They
also state that it off ered several alternatives to Spouses Ang to
transfer their investment to its other feasible projects and for the
amounts they already paid to be considered as partial payment for
the replacement unit/s.
On a separate answer, petitioner claims that its prestation under the
JVA consisted of contributing the property on which the condominium was
to be constructed. Not being privy to the Contracts to Sell executed by
PPGI and respondents, it did not receive any portion of the payments
made by the latter; and, that without any contributory fault and negligence
on its part, PPGI (and not the petitioner) breached its undertakings under

the JVA by failing to complete the condominium project. The Housing and
Land Use (HLU) arbiter ruled in favor of respondents, rescinding
the contract and ordering petitioner and PPGI to pay refund, interest,
damages, attorneys fees and administrative fines. The HLURB Board of
Commissioners
aff irmed
the
HLUs
order.
Motion
for
Reconsideration (MR) was denied. The case was subsequently raised to
the Office of the President (OP) which rendered a decision dismissing
petitioners appeal on the ground that the latters appeal memorandum was
filed out of time and that the HLURB Board committed no grave abuse of
discretion in rendering the appealed decision.MR was also denied.
Petitioner filed before the CA a motion for extension within which to file its
petition for review, claiming heavy workload of its counsel. This was denied
by the CA. MR was denied for lack of merit. Hence, the present petition
before the Supreme Court.
Issue:
Whether or not J. Tiosejo Investment Corp. is exempt from
liability by claiming it was not privy to the Contract to Sell executed
by its JV partner, PPGI and the Spouses Ang
Held:
The Supreme Court held that J. Tiosejo Investment Corp. cannot
avoid liability by claiming that it was not in any way privy to the Contracts
to Sell executed by PPGI and respondents. It was stated in its ruling that a
joint venture is considered as a form of partnership, and as such, it should
be governed by the law of partnerships.
Under Article 1824 of the Civil Code of the Philippines, all partners
are solidarily liable with the partnership for everything chargeable to the
partnership, including loss or injury caused to a third person or penalties
incurred due to any wrongful act or omission of any partner acting in the
ordinary course of the business of the partnership or with the authority of
his co-partners. Whether innocent or guilty, all the partners are solidarily
liable with the partnership itself.