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Business Partnership Gone Wrong, please legal advice badly needed

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Arresto Menor
Hi to all members and legal advisers. Happy New Year!

I engaged in rice financing business in 2011, partnering with my friend, who happens to have a boyfriend who is an Agriculturist and graduated in a prestigious university. The amount i have invested totaled Php 230,000.00 breakdown as follows;

1. Php 200,000.00 for financing 5-hectare rice fields.
2. Php 30,000.00 for the purchase of a land harrow, which i agreed to buy because my friend told she will also rent to the nearby rice fields owner for another source income.

Being an OFW, our communication was limited to phone calls, email correspondences and facebook messenger. I sent the money in January 2011, and my friend confirmed receiving the money. An update informing me about the current activities in the ricefields, telling me 1.5 hectares was ready for planting and 2 hectares on going for land preparation was sent to me on February 9, 2011, after that I did not receive anything from her. Because i was trusting her fully, i busied myself with other extra income activities in Dubai to earn extra money, not until after 7 months when i decided to call and ask for update. after many attempts to contact her, finally she answered me, telling that the rice financing venture was a FAILURE, when I asked her the reason, she only tells me... "FAILURE, IT WAS A FAILURE", so I told her, "ok. just send me the report". But no report was sent to me.

In 2012, through a phone conversation, she told me she will pay me back what I have invested as it is a hard earned money. I replied, as you like but just give me the report. Money is not the issue here, but my right to know what is the truth, the reason of the Failed Rice Financing Venture. But still the report i requested was never given to me.

In 2014, she told me she has paid the Php 200,000.00 by depositing it to my accounts, and by giving to my parents, etc... While on vacation, I got the chance to ask some rice growers regarding the rice production and when i told them about my story, they only told me one thing... the amount of money i have invested cannot be losed easily, ask for the report and see what really happened.

When i asked my friend about the report, she replied, "why you need the report when we already paid you in full?" I replied, "I only wanted to know what happened". But the issue now became complicated.

My questions are:

1. Can i file for a legal complain regarding this business partnership that gone wrong? We did not sign any agreements,  we only correspond by email. My friend stated that she will update me with the developments but she only gave me one report and went silent. Is this a case for ESTAFA?
2. My friend's statement that she has paid the full Php 200,000.00 although I am in doubt and still has to be checked, dismisses my right to know what really happened with our venture?
3. My friend is telling me, she has no more obligation to me, she has paid me and settled the issue and she will face me even if we end up in court. Is it true that she has no more obligation because she has paid me?
4. I only wanted to know the truth but it was denied to me, with this can i sue my friend for BETRAYAL OF TRUST?

Thank you in advance for your advices. I remain.



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Reclusion Perpetua
Sure you can file an estafa, but I don't know what chance you have to winn, I don't know how much you can prove. And it take veru long time anyway if you go to court. So better THREAT to file an estafa.

Are your homes from same baranggay, and the ment to be rice field too?
Then there can be a SHORTCUT possibility = Ask the baranggay to be "court".

I believe it can be TWO reasons to her action:
A. They MESSED UP and pay you to save face, although the venture REALY fail by they made some stupid misstake. (Because otherwice can't all be lost, because EVEN IF the harvest failed, the land is still there...)

B. Or they DID the project as PLANED, and want to keep the PROFIT for THEMSELVES, without sharing with you. That can be rather much, it has been several years and several harvests since then...
(Bb. It's even possible the value of the LAND have raised MUCH of some development project some OTHER person did.)

Which alternative is most likely, you can judge better than I, because you know her.

You can demand information about WHICH land it is/was. If she don't even answer that, then I asume it's B.

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Reclusion Perpetua
Dagdag lang ako sa mga nasulat na at sa inputs mo.
More assumptions and speculations:
1. You provided the capital, they supplied the know how and the day-to-day operations.  You have limited knowledge on farm production and management.
2. It was a business venture based on theory or even gut feel with actual reality still to be learned.
3. No set guidelines yet on how investment is to be treated and how revenue is to be shared.  You have limited knowledge on financials, profit and loss, return on investment.
4. Partner went through ups and downs but somehow recovered.  You did not find out because no controls were set up.
5. Partner eventually discovered through experience how to get the most out of the venture or realized it is not a winning venture.  You were not informed anymore.
6. Investment was recovered and partner eventually realized it is before off for them to run the business themselves.
7. Partnership was based solely on trust and friendship.  You suspect betrayal and it hurt you.

Only through a conversation and probing can you uncover the real facts.  All assumptions need your validation.
Let us know what they are in case you find out.  It is interesting.
Then you can write again for another round of advice for you to consider, apply or ignore.

By the way, is the farm lot a CARP area?  AAbangan kung susundan mo pa.

Last edited by centro on Sun Jan 04, 2015 12:52 pm; edited 1 time in total

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Arresto Menor
Dear Lunkan, Centro,

thank you for your replies,
i have already asked the barangay for a hearing regarding this issue and we already had 4 sessions, in the end my friend has accused me of trying to get more money from her and her boyfriend.

they cannot prove how the rice financing went failure, their explanation was vague and not in order, they said it was black bug, it was the flood, it was the soil who was very dry, etc. etc. but even the receipts of their purchases, the photos of the area, the photo and receipt of the land harrow purchased was never submitted. they only submitted a report enumerating what they purchase without valid attachments.

the barangay hearings are over and the only solution is for me to decide whether to proceed filing a case in the court. the minutes of the hearing has been prepared and the endorsement is ready, the balance is my decision to proceed to court or no.

they are insisting, they do not have obligations to me as they have already paid the amount i gave as an investment.

when i asked them the location of the land, they gave me a map that is hard to understand and they are rude in answering questions and whenever i am talking, they pretend they are not listening and would turn her face on the side. i really felt insulted.

the land, as per my info was owned by the family of my friend's boyfriend. they have a lot of agricultural lands in different areas in our region but the family became broke and has no money to finance the lands.

regarding what happened to the rice plantations, i am very confident that the boyfriend, who is an agriculturist's by profession knows what he is doing, he has learned skills from his dad being an agricultural adviser in our place, has graduated in a prestigious university and has acquired practical, theoritical skills in farming.

i am really in dilemma as of the moment, i dont know what shall i do? court would mean money wasted and the time spent will be a lot, it could go for a year or more. but how can i possibly know the truth. i suspect, they used the money in another investment or the profit from the rice plantations was good and they have decided not to share it so they told it was a failure and decided to give the money back to me.

no the land is not covered by CARP.

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Reclusion Perpetua
From the available information, my initial assessment of the issue is an accounting of the investment and the activities conducted through the years.
The financial picture of the venture like investments, capitalization, treatment of revenue, return on investment and treatment in case of loss has not been established though.
As it centers on financials, the solution is an audit (before bringing to court per my opinion).
You may need to mutually agree on the methodology like submitting it to an independent 3rd party assessment.
When the result is out, both parties can objectively come up with a resolution leading to a dissolution of your informal venture.

Or you can just leave it at where it is, hanging.
Hope this helps. Good luck.

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Arresto Menor
the rice financing activities was not reported to me. when i asked for the report why it was a failure, i was not even given. they have just insisted that they have no more obligations to me because they have paid the Php200,000.00.

no receipts, no photos of the rice fields and even no photo of the purchased land harrow, all of these important documents were not submitted to me.

YES, they have continued the rice planting activities but they are saying, i have nothing to do with it because the financing comes from their pockets, the money i have invested was already lost.

with this current situation, how can i possibly ask for the financial picture of the investments, when everything was hidden to me?

they did not show any reports, they did not show any receipts, they did not shows photos... nothing. Only their word that says, "IT WAS a FAILURE".

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