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Partnership: Kinds of Partnership Digests

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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

With the rescission of the JVA on account of petitioner’s
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.