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 CA’s 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, attorney’s fees and administrative fines. The HLURB Board of Commissioners aff irmed the HLU’s order. Motion for Reconsideration (MR) was denied. The case was subsequently raised to the Office of the President (OP) which rendered a decision dismissing petitioner’s appeal on the ground that the latter’s 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.
