MARSMAN DRYSDALE LAND, INC. vs. PHILIPPINE GEOANALYTICS, INC. AND GOTESCO PROPERTIES, INC.

G.R. No. 183374, G.R. No. 183376                    June 29, 2010

FACTS
Marsman Drysdale Land, Inc. and Gotesco Properties, Inc entered into a Joint Venture for the construction and development of an office building on a land owned by Marsman Drysdale in Makati City. The joint venture engaged the services of Philippine Geoanalytics, Inc. to provide subsurface soil exploration, laboratory testing, seismic study and geotechnical engineering for the project. PGI, was, however, able to drill only four of five boreholes needed to conduct its subsurface soil exploration and laboratory testing, justifying its failure to drill the remaining borehole to the failure on the part of the joint venture partners to clear the area where the drilling was to be made. PGI was able to complete its seismic study though.

PGI then billed the joint venture for P284,553.50 representing the cost of partial subsurface soil exploration and  for P250,800 representing the cost of the completed seismic study. Despite repeated demands from PGI,  the joint venture failed to pay its obligations.

PGI subsequently filed a complaint for collection of sum of money and damages at the RTC of Quezon City against Marsman Drysdale and Gotesco. In its Answer with Counterclaim and Cross-claim, Marsman Drysdale passed the responsibility of paying PGI to Gotesco which, under the JVA, was solely liable for the monetary expenses of the project.

ISSUE
Which between joint venturers Marsman Drysdale and Gotesco bears the liability to pay PGI its unpaid claims

RULING
The Court finds Marsman Drysdale and Gotesco jointly liable to PGI. PGI executed a technical service contract with the joint venture and was never a party to the JVA. While the JVA clearly spelled out, inter alia, the capital contributions of Marsman Drysdale (land) and Gotesco (cash) as well as the funding and financing mechanism for the project, the same cannot be used to defeat the lawful claim of PGI against the two joint venturers-partners.

A joint venture being a form of partnership, it is to be governed by the laws on partnership. Article 1797 of the Civil Code provides that, “The losses and profits shall be distributed in conformity with the agreement. If only the share of each partner in the profits has been agreed upon, the share of each in the losses shall be in the same proportion.”

In the JVA, Marsman Drysdale and Gotesco agreed on a 50-50 ratio on the proceeds of the project. They did not provide for the splitting of losses, however, applying the above-quoted provision of Article 1797 then, the same ratio applies in splitting the P535,353.50 obligation-loss of the joint venture.

Marsman Drysdale and Gotesco being jointly liable, there is no need for Gotesco to reimburse Marsman Drysdale for 50% of the aggregate sum due to PGI. Allowing Marsman Drysdale to recover from Gotesco what it paid to PGI would not only be contrary to the law on partnership on division of losses but would partake of a clear case of unjust enrichment at Gotescos expense.

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