Ch2: Sec 1 AMONG THEMSELVES (1784 - 1809)

Question 1

1797- Rules on division of profits and losses if all are “Capitalist” partners

Answer 1

1. according to their AGREEMENT
2. SAME PROPORTION of profits to losses
3. according to CAPITAL CONTRIBUTION

Question 2

1797- Rules on division of profit for Capitalists + Industrial Partners

Answer 2

1a. according to AGREEMENT
1b. INDUSTRIAL PARTNER - to receive just and equitable compensation; CAPITALIST PARTNERS - according to capital contribution

Question 3

1797 - Rules on division of losses for Capitalists + Indutrial Partners

Answer 3

1. INDUSTRIAL PARTNERS : exempted
2. CAPITALIST PARTNERS:
   2a. according to agreement
   2b. same proportion of Profit to Losses
   3b. according to capital contribution

Question 4

1797- Rules on Division of Profits for Capitalists + Capitalist-Industrial Partner

Answer 4

1a. according to agreement
1b. capitalists-industrial partner; to receive a just and equitable share in his capacity as an industrial partner; CAPITALIST PARTNERS according to capital contribution

Question 5

1797- Rules on Division of Losses for Capitalists + Capitalist-Industrial Partner

Answer 5

1. The indutrial partner is exempted as to his capacity as an industrial partner
2. Shall be divided according to AGREEMENT (including the capitalist partner in his capacity as a capitalist partner)
3. according to CAPITAL CONTRIBUTION

Question 6

1798 - Effect when the partners have agreed to entrust to a 3rd person the designation of the SHARE of each one in profits and losses

Answer 6

1. It shall be BINDING upon the partners
2. may be IMPUGNED ONLY when it is manifestly INEQUITABLE but it cannot be impugned by:

         a. a partner who has begun to execute it (already estopped from questioning it) 
          b. any partner if 3 months had already lapsed from the time he obtained the knowledge thereof.

Question 7

1799- A stipulation which excludes one or more partners from any share in the profit or losses is ____.

Answer 7

VOID because a partnership is established for the common benefit and interest of the partners (Art 1770)

Question 8

1880- 2 Implications when a partner is appointed as mngr. in the ARTICLES of partnership

Answer 8

1. SCOPE: ALL ACTS OF ADMINISTRATION despite the opposition of his partners unless he acts in bad faith.
2. REVOCATION:
   a. with just/lawful cause : can be revoked by the vote of the partners owning the CONTROLLING interest
   b. without just/lawful cause: only with the consent of ALL the partners including the managing partner (because such revocation would be a NOVATION of the articles of the partnership. )

Question 9

1800- 2 Implications when a partner has been appointed mngr AFTER the partnership has been constituted

Answer 9

1. SCOPE: ALL ACTS OF ADMINISTARTION. In case of opposition by other partners: the partner ownin the controlling interest may resort to voting for his removal as mngr.
2. REVOCATION: May be removed with or without lawful cause by the vote of the partners owning the controlling interst. (RSN: art 1290, a partner is only agent whose authority may be revoked at any time by his principal, the partnership.)

Question 10

1801- When 2 or MORE persons have been appointed as managers & NO SPECIFICATION of their respective duties / no stipulation that one of them shall not act without the consent of others.

Answer 10

1. SCOPE: Each mngr may separately execute acts of adminstration.
2. IN CASE OF OPPOSITION BY OTHER MNGRS:
   a. the decision of the MAJORITY of the mnging partners shall prevail.
   b. in case of a tie, the vote of the mnging partner owning the controlling interest shall prevail.

Question 11

1802- When 2 or MOREpartners have been appointed as mngrs and THERE IS A STIPULATION that none of the mnging partners shall act without the consent of the others.

Answer 11

1. UNANIMITY is required (concurerence or consent of all shall be necessary for the validity of the acts.)
2. absence/disability of any one of them CANNOT be alleged UNLESS there is imminent danger of grave or irreparable injury to the partnership.

Question 12

1784 - A partnership BEGINS from the _____, unless it is otherwise stipulated.

Answer 12

moment of the EXECUTION of the contract

Question 13

1785 - When a partneship for a fixed term or particular undertaking is CONTINUED after the termination of such term or particular undertaking WITHOUT any express agreement, _____

Answer 13

the rights and duties of the partners REMAIN THE SAME as they were at such termination, so far as consistent with a PARTNERSHIP AT WILL.

Question 14

1785- ____a PRIMA FACIE evidence of a continuation of the partnership

Answer 14

continuation of the business by the partners or such of them as habitually acted therein during the term, WITHOUT ANY SETTLEMENT or LIQUIDATION of the partnership affairs.

Question 15

1786 - Every partner is a DEBTOR of the partnership for whatever he may have promised to contribute thereto. What are his obligations?

Answer 15

1. Contribution of specific things (like Vendor - Vendee)
   a. to deliver it at the time it was constituted or on the date stipulated.
   b. diligence of a good father of a family
   c. liable for damages in case of default
   d. answer for eviction
   e. liable for the fruits of the thing from the time they should have been delivered W/O the need of demand

Question 16

1786- What is EVICTION and what does it comprise?

Answer 16

• the depreviation of the vendee of the whole or part of the thing sold by virtue of a final judgement based on a right prior to the sale or an act imputable to the vendor (art 1548)
  a. value of the property
  b. income/fruits (to the party who won the suit against)
  c. Cost of suit
  d. expenses of the contract (if the prtnrship has paid them)
  e. damages/interests/ornamental expenses

Question 17

1787- What is appraisal and how should it be done?

Answer 17

the act or process of determining the VALUE of a property as of a specific date for a specific purpose (Sec 3 Real Property Tax Code)

1. acc to the manner stipulated in the contract
2. by the experts chosen by the partners

• the subsequent price changes thereof shall be borne by the prtnership

Question 18

1788- a partner who undertakes to CONTRIBUTE a sum of MONEY and fails to do so becomes ______

Answer 18

a DEBTOR ( to deliver the money ) for the INTEREST and DAMAGES from the time he should have complied with his obligation

Question 19

1788- Obligations of a partner with respect to amount appropriated (partnership coffers)

Answer 19

1. reimburse the amount
2. pay interest
3. pay the damages

Question 20

1789 - can an industrial partner engage in a business for himself? (even if it is of a kind different form the prtnership bus.?)

Answer 20

NO unless the partnership expressly permits him to do so. Effects otherwise:

1. the capitalists partners may exclude him from the firm
2. capitalists partners- to avail themselves the benefits he obtained in violation + right to damages.

Question 21

1790- Unlessthere is a stipulation to the contrary, the partners shall contribute ______

Answer 21

EQUAL SHARES to the capital of the partnership (expn: industrial partners)

Question 22

1791- for capitalist partners:
If there is no agreement to the contrary, in case of an IMMINENT LOSS of the business of the partnership, any partner who REFUSES to contribute add’l share to the capital, except an industrial prtner, to save the venture, SHALL _____

Answer 22

be OBLIGED to SELL his interest to the other partners

Question 23

1792 (about the mnging partner):

rules when payment is made by a 3rd person who ows SEPARATE DEMANDABLE DEBTS to the prtnrship and to the mning partner.

Answer 23

1. if the mnging partner issues the RECEIPT of the prtnrship: payment shall be applied to the ENTIRETY of the PARTNERSHIP CREDIT.
2. if the mnging parners issues his own receipt: payment shall be applied to the 2 CREDITS PROPORTIONATELY.

Question 24

1792- RQs when payment be applied entirel to the mnging partner’s credit

Answer 24

1. if the debt is owed not to the collecting / mnging partner
2. when debt to the partnership is NOT DUE yet
3. personal credit is MORE ONEROUS to the debtor and the collecting prtner avails himself of the right to apply the payment to such debt.

Question 25

1793- a partner who has RECEIVED in while or in part, his share of the prtneship CREDIT, when the other partners have not collected theirs, shall be obliged, if the debtor should thereafter become insolvent, to ___.

Answer 25

BRING to the prtnership capital what he HAVE RECEIVED EVENTHOUGH he may have given receipt for his share only.

Question 26

1794 - Every partner is RESPONSIBLE to the prtnership for damages suffered by it thru his fault, and he CANNOT compensate them with the profit and benefits which he may have earnerd for the partnership by his industry, However _____

Answer 26

the courts may equitably LESSEN this responsibilit if thru his extraordianry efforts, unsual profits have been realized. (e.g. substantial increase in the market share of the good by the partnership)

Question 27

1795- Contribution of specific and determinate things:\

a) when PARTNERSHIP bears risk of loss
b) when the PARTNER bears risk of loss

Answer 27

a. 1 fungible things/ those that cannot be kept without deteriorating (grain, oil)
a. 2. things contributed to be sold
b. 1 not fungible determinate things (contributed for their use and fruits only)

Question 28

1796- what are the OBLIGATIONS of the partnership to the partners?

Answer 28

1. amounts the partners may have DISBURSED on behalf of the partnership w/ interest from the time the expenses were made. (.eg. electric, tax bills)
2. pay for the OBLIGATIONS which a partners ma have CONTRACTED in good faith in the in the interest of the partnership business. (e.g credit puchase of goods made by a partner)
3. answer for risk in CONSEQUENCE of the management of the partnership business. (price drop)

Question 29

1803- What are the rules when the manner of mngt has not been agreed upon?

Answer 29

1. All partners shall be considered AGENTS and whatever any one of them may do alone shall BIND the p’ship (w/o prejudice to the provisions of article 1801)
2. NONE of the partners may, w/o the consent of th eothers make any important alteration in the IMMOVABLE PROPERTY of the P’ship. But if the refusal to th einterest of the p’ship, the court’s intervention may be sought.
3. in case of opposition of the other partners:
   a. the decision of the MAJORITY shall prevail
   b. in case of a tie: parties with the controlling interest shall prevail.

Question 30

1804- Every partner may associate another person with him in his share, but the associate shall not be admitted into the p’ship without ______

Answer 30

the CONSENT of all the other partners, even if the partner having an associate should be a manager!

Question 31

1805 - The P’ship books shall be kept, subject to any agreement between the partners, at the ________and every partner shall at any reasonable hour have ______.

Answer 31

• principal place of business of the partnership

* ACCESS to and may INSPECT and COPY any of them

Question 32

1806- Partners shall render on demand true and full information of all things affecting the p’ship to ____ (3)

Answer 32

1. any partner
2. legal representative of any deceased partners
3. any partner under legal disability

Question 33

1807- every partner MUST ACCOUNT to the p’ship for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from _____

Answer 33

any transaction connected with 1. with the FORMATION, CONDUCT or LIQUIDATION of the partnership
2. Any use by him of its property.

Question 34

1808 - the capitalist partners ____ for their own account in any operation which is of the KIND of business in which the p’ship is engaged, UNLESS there is a stipulation to the contrary

Otherwise he shall _____

Answer 34

• CANNOT ENGAGE

- bring to the common funds any profits accruing to him from his transactions, and shall personall bear all the losses.

Question 35

1808- any partner violating this provision shall:

Answer 35

1. bring to the common funds any profits accruin to him from his transactions
2. shall personally bear all the losses in his 2nd bus and that of the original p’ship

Question 36

1809 - ANY partner shall have the right to a FORMAL ACCOUNT as to p’ship affairs in what cases?

Answer 36

1. If he is WRONGFULLY EXCLUDED from the p’ship business or possession of its property by his co-partners.
2. If the right exists under the terms of any agreement
3. 1807 - any transaction connected with FCL of the p’ship or from the use by him of the p’ship property.
4. Whenever other circumstances render it just and equitable.

Question 37

1809- a statement showing the financial transactions and dealings of the p’ship and the statud of its assets

Answer 37

Accounting :)