1767-1783 Flashcards
Chapter 1 | General Provisions
Two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.
Contract of Partnership
Two or more persons may also form a partnership for the exercise of a profession.
General Professional Partnership
It is a group of men pursuing a learned art as a common calling in the spirit of public service.
Profession
Essential Requisites of a Contract of Partnership
- There must be a VALID CONTRACT
- There must be a CONTRIBUTION OF MONEY, PROPERTY, OR INDUSTRY to a common fund
- The partnership must be ORGANIZED FOR GAIN OR PROFIT
- The partnership should HAVE A LAWFUL OBJECT OR PURPOSE, and must established for the common benefit or interest of the partners.
What is the FIRST TEST to determine the existence of a partnership?
Determine whether or not therre is an AGREEMENT TO CONTRIBUTE money, property or industry.
What is the SECOND TEST to determine the existence of a partnership?
Determine whether or not there is an INTENT OF THE CONTRACTING PARTIES to divide the profits among themselves.
What are the requisites to be considered a JURIDICAL PERSONALITY?
- Two or more persons bind themselves to contribute money, property or industry to a common fund
- Intention on the part of the partners to divide the profits among themselves.
Characteristic of a Contract of Partnership
- Consensual
- Commutative
- Principal
- Bilateral
- Onerous
- Nominate
- Preparatory
Perfected by mere consent; partners had a meeting of minds.
Consensual
Contribution of each partner considered as equivalent of the contribution of the other partners.
Commutative
Does no depend on other contracts for its existence; can stand alone.
Principal
Entered by two or more persons.
Bilateral
Each partner must contribute money, property, or industry; can contribute one, some, or all of these.
Onerous
Has a name in law.
Nominate
Contract in preparation for another contract or contracts.
Preparatory
Medium of exchange authorized or adapted by a government as part of its currency.
Money
Any external thing over which the rights of possession, use, and enjoyment are exercised.
Property
Diligence in the performance of a task; a particular form or branch of productive labor.
Industry
Exists when two or more persons agree to place their money, effects, labor, and skill in lawful commerce, or business, with the understanding that there shall be a proportionate sharing of the profits and losses between them.
Partnership
Form of partnership; generally governed by the law on partnership
Joint Venture
The right to choose with whom a person wishes to associate himself = foundation and essence of partnership.
Doctrine of Delectus Personae
An entity created by law and given certain legal rights and duties of a human being.
Artificial Person / Juridical Person
What rules should be applied in determining whether a partnership exists?
R#1: Person who are not partners as to each other are not partners as to third persons.
R#2: Co-ownership or co-possession does not itself establish a partnership.
R#3: The sharing of gross returns does not of itself establish a partnership.
R#4: : The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business.
Sufficient to establish a fact or raise a presumption unless disproved or rebutted.
True on first examination, even though it may later be proved to be untrue.
Prima Facie
Exceptions to Rule 4
- As a DEBT by installments or otherwise.
- As WAGES of an employee or rent to a landlord.
- As an ANNUITY to a widow or representative of a deceased partners.
- As an INTEREST of a loan.
- As the consideration for the sale of a GOODWILL of a business or other party.
Object and purpose of a partnership must be:
- Within the commerce of man
- Not impossible
- Not contrary to law, morals, good customs, public order, or policy
Lawful Object or Purpose
Effects of Unlawful Partnership
- The contract is void from the very beginning.
- The profits shall be confiscated in favor of the government.
- The instrument or tools and proceeds of the crime shall be forfeited in favor of the government.
- The contribution of the partners shall be confiscated unless they fall under no. 3.
Form of Contract of Partnership
(General Rule)
No form is required; the contract may be oral or in writing.
Form of Contract of Partnership
(Exception)
- If real properties or real rights in real properties are contributed regardless of the value.
- Public instrument is needed, otherwise the contract of partnership is void.
Right that is connected with a thing rather than a person. Include ownership, use, habitation, usufruct, predial servitude, pledge, and real mortgage.
Real Rights
Document prepared by a notary public in the presence of the parties who sign it before witnesses.
Public Instrument
Partnership having a capital of P3,000 or MORE (personal property only)
- Must appear in a public instrument and must be recorded in the office of the SEC
- Non-compliance will not make the contact void; contract is still valid
Partnership having a capital of BELOW P3,000 (personal property only)
No form is required; may be verbal
Set a condition for the issuance of licenses to engage in business or trade.
Purpose of Registration
Whenever there is immovable property, the contract of partnership is ____.
Void
What is the intention of Article 1773?
- To protect third persons.
- The execution of a public instrument would be
useless if there is no inventory of the property
contributed.
Any immovable property or any interest therein may be acquired in the ___________ ____.
Partnership Name
TRUE or FALSE: Associations and societies, whose article are kept secret among the members, and wherein any one of the members may contract in his own name with third person, shall have juridical personality, and shall be governed by the provision relating to co-ownership
FALSE, shall have NO juridical personality
Partners contribute all the property which actually belong to them to a common fund, with the intention of dividing the same among themselves, as well as all the profits which they may acquire therewith.
Universal Partnership of all Present Property
Comprises all that the partners may acquire by their industry or work during the existence of the partnership
Universal Partnership of all Profits
Has for its object determinate things, their use or fruits, or specific undertaking, or the exercise of a profession or vocation.
Particular Partnership
All partners are general partners. Liable up to the extent of their separate properties after the assets of the partnership have been exhausted
General Partnership
At least one general partner and one limited partner
- general partner = liable beyond his contribution
- limited partner = liable only to the extent of his contribution
Limited Partnership
There is no fixed term or it is not formed for a particular undertaking.
Partnership at wil
The life or period of existence of the partnership has been agreed upon by the partners.
Partnership with a fixed term
Will exist until the purpose is accomplished.
Partnership for a particular undertaking
Two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.
Ordinary Partnership
Persons, by words spoken or written or by conduct, represent themselves, or consent to another representing them to anyone, as partners in an existing partnership or with one or more persons not actual partners.
Partnership by estoppel
Complied with all the legal requirements for its creation.
De jure Partnership
Has not complied with all the legal requirements for its creation
De facto Partnership
The contributions of the partners are:
- All the properties actually belonging to the partners.
- The profits acquired with said properties.
What types of property acquisitions cannot be included in the stipulation, except for their fruits?
Inheritance, legacy, or donation
Future properties cannot be included because:
- As a rule, contracts regarding successional rights cannot be made.
- A partnership demands that the contributed things be determinate, known, and certain.
- A universal partnership of all present properties really implies a donation, and it is well-known that generally, future property cannot be donated.
Universal Partnership of all Present Property (At the time of constitution of the partnership)
GR: Only the profits of said contributed property become common property but not profits arising from other property of the partners.
EXPN: If stipulated the profits from other property of the partners may become common.
Universal Partnership of profits (During the existence of the partnership)
All profits acquired through the “industry” or “work” of the partners become common property.
Presumption in favor of universal partnership of profits
The universal partnership of profits imposes LESS OBLIGATION because their real and personal properties are retained by them in naked ownership.
Persons who cannot enter into a universal partnership
- Legally married spouses
- Husband and wife without a valid marriage
- Guilty of adultery or concubinage at the time of the donation
- Guilty of the same criminal offense
- A person or persons and a public officer or his wife, descendant, and ascendants, by reason of his office.
