1810 - 1814 Flashcards
Section 2. Property Rights of a Partner
The property rights of a partner are:
- Rights in specific partnership property.
- Interest in the partnership.
- Right to participate in the management.
A partner is a _______ with his partners of specific partnership property, but the rules on __________ do not necessarily apply
co-owner
co-ownership
The incidents of this co-ownership are such that:
- A partner has an equal right with his partners to possess specific partnership property for partnership purposes
- A partner’s right in specific partnership property is not assignable
- A partner’s right in specific partnership property is not subject to attachment or execution
- A partner’s right in specific partnership property is not subject to legal support
A partner’s interest in the partnership is his?
Share of the Profit and Surplus
The excess of revenues over expenditures in a business transaction
Profit
The excess of receipt over disbursements.
Funds that remain after a partnership has been dissolved and all its debts paid.
Surplus
General Rule and Exception of Article 1812
GR: Specific partnership property cannot be assigned, cannot be attached, and is not subject to legal support.
EXPN: Partner’s interest (depends on the contribution of the partners) can be assigned, can be attached, and can be subject to legal support.
The voluntary transfer of a right or of property
Conveyance
Effect of conveyance by partner of his whole interest in the partnership
- If a partner conveys (assigns, sells, donates) his whole interest in the partnership, it may subsist (general rule) or it may be dissolved (exception)
- The assignee:
a. Cannot interfere in the management of the partnership business
b. Cannot require information or accounting of partnership transactions
c. Cannot inspect partnership books
Rights of the assignee
- To receive the profits to which the assigning partner would otherwise be entitled
- In case of fraud in the management of the partnership, the assignee may avail himself of the usual remedies provided by law
- In case of dissolution, to receive the assignor’s interest
- In case of dissolution, the assignee may require an account from the date only of the last account agreed to by all the partners
The remedy available to a judgement creditor of a debtor-partners to charge the interest of the latter in the partnership by means of a court order for the purpose of satisfying the amount of the judgement.
Charging Order
The court will issue a charging order after the creditor obtained a favorable judgement from the court which became final.
Charging the Interest of a Partner debtor
The court may then or latter appoint a receiver of the partners-debtor share of the profits and of any other money due or to fall due to him in respect of the partnership, and make all other orders, directions accounts, and inquiries which the debtor-partner might have made, or which the circumstances of the case may require.
Appointment of a receiver
Redemption of Interest Charged
- Before foreclosure
- After foreclosure
The interest charged may be redeemed at any time before foreclosure.
Before foreclosure
It may still be purchased without thereby causing a dissolution:
a. With separate property of a partners
b. With partnership property with the consent of all the partners whose interests are not so charged or sold.
After foreclosure
It means the extinguishment of the charge or attachment on the partner’s interest in the profits.
Redemption
Right of a partner under exemption laws
A partner shall not be deprived of his right under the exemption laws, as regards his interest in the partnership.
However, a partner, cannot avail himself of the exemption laws insofar as his right in specific partnership property is concerned
