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

RULING: 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 similarcommunity 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

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Partnership: Kinds of Partnership Digests

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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