G.R. No. 183374 and 183376, June 29, 2010. MARSMAN DRYSDALE LAND, INC., Petitioner, vs. PHILIPPINE GEOANALYTICS, INC. AND GOTESCO PROPERTIES, INC., Respondents. G.R. No. 183376 GOTESCO PROPERTIES, INC., Petitioner, vs. MARSMAN DRYSDALE LAND, INC. AND PHILIPPINE GEOANALYTICS, INC., Respondents.
FACTS

Marsman Drysdale Land, Inc. (Marsman) and Gotesco Properties, Inc. (Gotesco) entered into a Joint Venture Agreement (JVA) to construct an office building on Marsman’s land. Under the JVA, Marsman contributed the land valued at ₱420 million, while Gotesco was to contribute ₱420 million in cash for construction and development. The JVA stipulated that Marsman’s contribution was limited to the property and that Gotesco was responsible for arranging and providing the necessary funding. The joint venture engaged Philippine Geoanalytics, Inc. (PGI) to perform geotechnical services. PGI partially completed its work, billing the joint venture ₱535,353.50. The project was eventually shelved, and PGI’s demands for payment went unheeded.
PGI filed a collection case against both Marsman and Gotesco. Marsman, in its defense, pointed to the JVA provision stating it had no obligation to fund the project, arguing that Gotesco was solely liable for monetary expenses. Gotesco countered that PGI had no cause of action as it did not fully complete its services and that Marsman failed to clear the property, preventing completion. The Regional Trial Court ruled in favor of PGI, holding both Marsman and Gotesco jointly and severally liable for the debt.

ISSUE

Whether Marsman Drysdale, as a joint venture partner whose contribution under the JVA was limited to the property, can be held jointly and severally liable with Gotesco for the contractual debt incurred by the joint venture with PGI.

RULING

Yes, Marsman can be held jointly and severally liable. The Supreme Court affirmed the lower courts’ decisions. The legal logic rests on the nature of the joint venture and the applicable provisions of the Civil Code. While the JVA internally allocated financial responsibility to Gotesco, this stipulation is binding only between the parties to the JVA (Marsman and Gotesco). It cannot prejudice a third-party creditor like PGI, who contracted with the joint venture as a distinct entity. The Court characterized the joint venture as a partnership governed by the Civil Code provisions on partnerships.
Under Article 1816 of the Civil Code, all partners are liable solidarily with the partnership for everything chargeable to the partnership. Since Marsman and Gotesco were partners in the joint venture, they are both solidarily liable to PGI for the debt incurred by their venture. The internal agreement limiting Marsman’s funding obligation is irrelevant to external liability. Consequently, PGI can rightfully collect the entire amount from either partner. The Court, however, upheld the trial court’s grant of Marsman’s cross-claim against Gotesco, ordering Gotesco to ultimately reimburse Marsman pursuant to their JVA, thereby enforcing their internal agreement after the external obligation to PGI is satisfied.