1800 - 1809 Flashcards
Section 1. Obligatios of the Partners Among Themselves
Who shall manage the partnership?
- Either one, some or all of the partners designated as managing partner/s either in the articles of partnership or after the contract of partnership has already been constituted.
- If there is no agreement, management is vested in all of the partners.
Two modes of appointment
- Appointment as manager in the articles of partnership.
- Appointment as manager made in an instrument other than the articles of partnership
Appointment as manager in the ARTICLES OF PARTNERSHIP
- The partner appointed as managing partner by common agreement in the Articles of Partnership
GR: Power is irrevocable without just or lawful cause.
Appointment as manager in the ARTICLES OF PARTNERSHIP
(Exception)
- To remove him for JUST CAUSE, vote of partners having controlling interest is necessary
- To remove him WITHOUT JUST CAUSE, there must be unanimity including his own vote
Rights and Obligations with Respect to Management
(Extent of power)
- A partner who has been appointed a MANAGER in the ARTICLES OF PARNTERSHIP may EXECUTE ALL ACTS of administration despite the opposition of his partners.
- But if he acts in BAD FAITH and there is an opposition, he cannot do any act of admininstration.
Appointment as manager made in an instrument other than the articles of partnership
- May have his power revoked at any time, with or without cause by the partners owning the controlling interest.
Scope of the Power of the Managing Partner
GR: The managing partner has ALL THE POWERS OF A GENERAL AGENT and those INCIDENTAL POWERS necessary to carry out the object of the partnership.
EXPN: When the power of the managing partner is restricted.
Compensation for services rendered
GR: Partner generally not entitled to compensation.
EXPN: The law may imply a contract of compensation.
When 2 or More Managing Partners have Entrusted with the Management
(Requisities)
- Two or more partners are managers
- There is NO SPECIFICATION of respective duties
- There is NO STIPULATION requiring unanimity, that is, that ONE OF THEM shall not act WITHOUT THE CONSENT of all the others.
If any of the managers should oppose the acts of the others:
- The decision of the MAJORITY (per head) of the managing partners shall prevail
- In case of a tie, the decision of the managing partners owning the controlling interest (more than 50%) shall prevail
If there is NO SPECIFICATION as the respective duties of the partners, then, what?
One may not have MORE POWERS than the other managing partners in the conduct and management of the partnership.
If there is a SPECIFICATION OF DUTIES, then, ??
The partner’s (in charged) decision will prevail over the others.
Stipulation Requiring Unanimity of Action
(General Rule)
- Unanimous consent of all the managing partners (even if one of the managers is absent or incapacitated) shall be necessary for the validity of the acts
- Absence or disability of any managing partner cannot be alleged
Stipulation Requiring Unanimity of Action
(Exception)
- There is an IMMINENT DANGER OF GRAVE or irreparable injury to the partnership.
- The partnership is engaged in the BUY AND SELL BUSINESS where it is usual to buy and sell on credit.
When the manner of management has not been agreen upon, what rules shall be observed?
- All the partners shall be considered as managers
- For important alterations in immovable property, unanimity is required.
Unanimity is required because this only deals with immovable property for the following reasons:
- Comparative greater importance than personality.
- They should be returned to the partners in the same condition as when they were delivered to the partnership.
(Consent of the others may be expressed or implied)
All partners can have an associate in his share, also called as
Sub-partner
Every partner may associate another person with him in his share, but the associate shall not be admitted into the partnership without the consent of all the other partners, even if the partner having an associate should be a manager.
Contract of Sub-partnership
An associate or sub-partner shall not be admitted into the partnership without the consent of all the other partners based on the following reasons:
- Mutual trust is the basis of the partnership.
- A change in membership is a modification or novation of the contract.
What is the purpose of inspecting and copying the partnership books?
It enables the partner to obtain true and full information of all things affecting the partnership.
Held on business days throughout the year and not merely during some arbitrary period of a few days chose by the directors (or managers as regards partnership)
Reasonable Hour
The partnership book shall be kept:
- In the place agreed upon by the partners.
- In the absence of agreement, at the PRINCIPAL PLACE of business of the partnership.
Violation of Article 1806 is called
Concealment
Who can demand true and full information?
- Any partner
- Legal representative of any deceased partner
- Legal representative of any partner under legal disability
