Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

RFBT > Partnership > Flashcards

Partnership Flashcards

1
Q

What is a partnership?

A

Art. 1767. By the contract of partnership 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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Allowed?

Partnership ——> Partnership

Partnership ——> Corporation

Corporation ——> Partnership

Corporation ——> Corporation

A

Yes

Yes

No , xpn = joint venture

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Characteristics of Partnership [8]

A

Consensual,

Bilateral/Multilateral,

Preparatory,

Nominate,

Onerous,

Commutative,

Profit-oriented, and

Principal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Elements of Partnership [5]

A
  1. Valid Contract - delectus personae, COC
  2. Legal Capacity to enter into a contract
  3. Mutual contribution
  4. Object must be lawful
  5. Primary purpose - profits
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

delectus personae

A

Choice of person

  • nobody can become a partner without consent of other partners
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Fiduciary

A

Trust and confidence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

2 kinds of persons

A

Art. 1768. Natural and Juridical (Private and public)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Advantages of being a juridical person

A
  1. Juridical capacity - fitness to be subject of legal regulations - lahat we have this when we were born
  2. Capacity to act - power to do acts with legal effects. - when we reach age of majority
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

General Rule in determining whether a partnership exists [rules]

A

Art 1769

If 5 elements are present, no doubt.

  1. Partners who are not partners with each other are not partners as to third persons
  2. Co-ownership does not establish partnership
  3. Sharing of Gross returns - because loss is not yet considered
  4. Receipt of profit shares by a person - prima facie evidence
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Person is a partner if

A
  1. Has required contribution
  2. Share in losses
  3. Say in mgt
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Instances where share of the profits received by a person from a business does not mean being a partner in such business (receipts of profit shares)

A

Art. 1769. NOT A PARTNER

  1. Debt by installment
  2. Wages of an employee or rent to landlord
  3. Annuity to a widow or representative of a deceased partner
  4. Interest on a loan, through the amount of payment vary with the profits of the business
  5. consideration for the sale of a goodwill of a business or other property by installments
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Art 1770

A

Must have lawful object (capital) or purpose (business itself)

Must be established for the common benefit or interest of the partners

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Effect of unlawful partnership

A
  1. Void ab initio (void from the start) and No judicial declaration
  2. All profits confiscated in favor of the government
  3. All instrumentalities, proceeds will be confiscated in favor of the government
  4. Capital is returned to the partner, if illegal is confiscated by the government. BUT CONTRIBUTIONS OF THE PARTNERS WILL NOT BE CONFISCATED UNLESS ILLEGAL
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Is there a form required for partnership?

A

Art. 1771
General Rule: No form is required
XPN: Form is required

Immovable property is contributed (Art. 1773)
Form required: PUBLIC INSTRUMENT + INVENTORY
Effect if not complied: VOID

Art. 1403(2)
More than 1 year
Form required: WRITING
Effect if not complied: UNENFORCEABLE

Art. 1844
Limited Partnership
Form required: PUBLIC INSTRUMENT + REGISTRATION
Effect if not complied: General Partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is required for every contract of partnership having a capital of three thousand pesos or more, in
money or property?

What is the remedy?

A

Art. 1772
PUBLIC INSTRUMENT + REGISTRATION

Note: Failure to comply with the requirements of the preceding paragraph shall not affect the liability
of the partnership and the members thereof to third persons.

REMEDY: Compel to put in a public instrument

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Art 1773 (Inventory)

A

Inventory made, signed, and attached to the Public Instrument

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

True or false:

Any immovable property or an interest therein may be acquired in the partnership
name. Title so acquired can be conveyed only in the partners’ name.

A

FALSE.

Art 1774.
Any immovable property or an interest therein may be acquired in the partnership name. Title so acquired can be conveyed only in the partnership name.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Do secret partnerships or associations have juridical personality?

A

No.

Art. 1775
Associations and societies, whose articles are kept secret among the members,
and wherein any one of the members may contract in his own name with third persons, shall have no juridical personality, and shall be governed by the provisions relating to co-ownership.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Kinds of partnership as to object

A

Art. 1776

Universal partnership - broad
Particular partnership - with specific purpose

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Kinds of partnership as to liability

A

Art. 1776

General partnership
Limited partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Differentiate Ostensible, Secret, Silent, and Dormant Partners [Known and Manage]

A

| Partners| Known| Manage |

Partners | Known | Manage|
| ——– | ——- | ——- |
| Ostensible| YES | YES |
| Secret| X | YES |
| Silent| YES| X |
| Dormant | X | X |

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Other Kinds of Partnership

A
  • At will v. Fixed
  • De Jure v. De Facto
  • Ordinary / Real v. Ostensible / Estoppel
  • Secret v Open / Notorious
  • Commercial v. Professional
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Kinds of Partners

A
  • Capitalist v. Industrial
  • General v. Limited
  • Sub Partner v. SLP
  • Silent v. Managing v. Liquidating
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Why is it necessary to distinguish a universal and limited partnership?

A

Because of the husband and wife prohibition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Two kinds of Universal Partnership

A

All present partnership - ownership is transferred
All profits UP - usufruct

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Universal Partnership of ALL Present Property

A
  1. ALL properties owned at the time of creation – after creation, properties are not included but can be contributed later on. (Art 1778)
  2. Profits from properties contributed - ALL, principals and accessories (Art 1779)
  3. Stipulation for the common enjoyment of any other profits, but the properties which may be subsequently acquired by inheritance, legacy, or donation ARE NOT INCLUDED, except the fruits thereof (Art. 1779) since they are not lucrative of the partnership
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Universal partnership of ALL profits [2]

A

Art 1780

  1. Industry or work during the existence of the partnership.
  2. Usufruct only passing
    to the partnership - right to use, JUS UTENDI - with cutoff
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

If there is a doubt, is it a general or limited partnership?

A

GENERAL

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

If there is a doubt as to the type of Universal Partnership, what is the classification?

A

Universal partnership of ALL profits - least transmission of right, partner remains the owner of the property (Art 1781)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Can persons prohibited enter into a universal partnership?

A

Art 1782
Persons who are prohibited from giving each other any donation or advantage
cannot enter into universal partnership.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

If 1 is incapacitated

A

Voidable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

If 2 are incapacitated

A

Unenforceable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

If both are prohibited

A

VOID

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Can H & W sell to each other?

A

NO

Exceptions [2]
Before and after marriage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Can H & W donate to each other?

A

NO

XPN = moderate gift, based on status

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Can H & W enter into a universal partnership?

A

NO.
Art. 1782. Persons who are prohibited from giving each other any donation or advantage
cannot enter into universal partnership.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Can H & W enter into a particular or limited partnership?

A

YES

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

ART 739 CC Prohibitions [3]

A
  1. Persons who are guilty of adultery (wife sin) or concubinage (husband sin)
  2. Found guilty - court declaration
  3. Public officer

cannot enter into a universal partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Particular partnership [4 things]

A

Art. 1783
A particular partnership has for its object determinate things, their use or fruits, or
specific undertaking, or the exercise of a profession or vocation.

  • with specific purpose
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Distinguish as to juridical personality

Coownership,
Conjugal Partnership of Gains,
Voluntary Association,
Partnership,
Corporation

A

with Juridical personality
-Partnership
- Corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Distinguish as to purpose

Coownership,
Conjugal Partnership of Gains,
Voluntary Association,
Partnership,
Corporation

A

Purpose
- Coownership - common enjoyment
- Conjugal Partnership of Gains - regulate property relations
- Voluntary Association - purpose varies
- Partnership - profit
- Corporation - profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Distinguish as to who decides in decision making

Coownership,
Conjugal Partnership of Gains,
Voluntary Association,
Partnership,
Corporation

A

who decides in decision making
- Coownership - all
- Conjugal Partnership of Gains - either H/W
- Voluntary Association - officer
- Partnership - all if act of ownership
- Corporation - BOD or BOT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Distinguish as to how it is created

Coownership,
Conjugal Partnership of Gains,
Voluntary Association,
Partnership,
Corporation

A

How is it created?

  • Coownership - either by law or agreement
  • Conjugal Partnership of Gains - by merge
  • Voluntary Association - by agreement
  • Partnership - by contract
  • Corporation - by law
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

No partnership in which of the following?

Coownership,
Conjugal Partnership of Gains,
Voluntary Association,
Partnership,
Corporation

A

Coownership
Conjugal Partnership of Gains,
Voluntary Association,

because of the purpose

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

When does a partnership begin?

A

Art. 1784. A partnership begins from the moment of the execution of the contract, unless it is otherwise stipulated.

Xpn: Future partnership

GR: Consensual - mere consent, from agreement
XPN: Future partnership (Period and Condition)

Note
- Delivery - to transfer ownership
- Public instrument - if real property is contributed
- Registration - if limited partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

What is the effect if there is no liquidation and the fixed partnership has ended?

A

Effect: Continues and becomes a partnership AT WILL
Rights of the parties: remains the same

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Obligations with respect to the contributions [5]

A
  1. Contribute at the beginning or the stipulated time (Art 1786) and in the manner stipulated in (1787)
  2. Answer for eviction with regard to specific and determinate
    things which he may have contributed to the partnership
  3. Answer for the fruits
  4. Preserve / DGFF
  5. Liable for damages
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Differentiate Sales, Obligations and Partnership with respect to answering for the fruits

A

Obligation (1169)
- Fruits transfer to buyer after the obligation to deliver arises
- no demand, no delay

Sales (1537)
- Fruits transfer to the buyer at the perfection

Partnership (1786)
- Fruits transfer to the partnership when there is delivery
- automatic delay

49
Q

Remedy for failure to contribute

A
  • Action for Specific performance

Art 1788.
A partner who has undertaken to contribute a sum of money and fails to do so
becomes a debtor for the interest and damages from the time he should have complied with his
obligation.
The same rule applies to any amount he may have taken from the partnership coffers, and his
liability shall begin from the time he converted the amount to his own use.

  • liable for damages
50
Q

Appraisal v. Inventory

A

Art 1787
Movable
With or without appraisal and inventory - VALID

Immovable
- with or without appraisal - VALID
- with inventory - VALID
- without inventory - VOID

51
Q

Valuation of properties contributed

A

Art. 1787
GR: Stipulation of parties
XPN: Experts chosen + current price

52
Q

Effects of the instance in Art 1788
1. Failed to contribute
2. Converted for his own use

A
  1. Automatically liable from the time it should have been contributed, or failed to contribute
    2 From the time he took/misappropriated it

personal –> partnership purpose - OK
partnership –? personal purpose - NOT OK - theft/estafa [if payment for creditors]

53
Q

Industrial partner
Capitalist partner
Limited partner

when are they allowed to engage in another business?

A

Industrial partner
- Same business - NO
- Different business - NO

Capitalist partner
- Same business - NO
- Different business - YES

Limited partner
- Same business - YES
- Different business - YES

54
Q

Is Industrial Partner allowed to engage in other business?

A

GR: IP is not allowed. Why? Loyalty

XPN: EXPRESSLY allowed

_Effect of violation_: the capitalist may do:
1. Exclusion
2. Availment of benefits

55
Q

Presumption as to the contribution to partnership

A

Art 1790

GR: EQUAL contribution
XPN: Stipulation to the contrary

56
Q

Obligation to give additional capital

A

Art 1791
GR: In case of imminent loss
XPN: No obligation to give
1. Stipulation
2. Industrial partner
3. Partner is insolvent

57
Q

Are damages subject to set-off?

A

Art 1794
GR: Damages are not subject to set-off
XPN: Unusual profits have been realized
Effect: Equitably lessened

58
Q

Obligations of Managing partner [in case of debt by another person]

A

Art 1792 Rules
GR: Look at the receipt
- If in the name of MP - proportionate application - not equal
- If in the name of Partnership - SOLELY to partnership
- if no stipulation - partnership

XPN: Rules are not applicable when:
1. NOT the MP (kay sa partner sya)
2. NOT yet due
3. MORE onerous (ang personal credit)

59
Q

Obligation of partner who receives a share of partnership credit

A

Art. 1793. A partner who has received, in whole or in part, his share of a partnership credit,
when the other partners have not collected theirs, shall be obliged, if the debtor should thereafter become insolvent, to bring to the partnership capital what he received even though he may have given receipt for his share only.

60
Q

Risk of loss (RES PERIT DOMINO)

A

Art 1795
What is contributed?
- If ownership - Partnership bears the loss
- If usufruct - Partner bears the loss

61
Q

Responsibilities of Partnership to partners [3]

A

Art 1796
1. To refund amounts disbursed by partner
2. Answer for obligations contracted in good faith
3. Answer for risks in consequence of management

62
Q

Differentiate Liability and Losses

A
  • Liability - responsibility to third parties
  • Losses - responsibility among partners
63
Q

Distribution of Profits (1797)
GR and XPN

A

GR: Stipulation
XPN: Capital contribution

64
Q

Distribution of Losses (1797)
GR and XPN

A

GR: Stipulation (loss sharing) - equal
XPN: No loss sharing - based on Profit sharing
XPN to XPN: No loss sharing or profit sharing - Capital contribution

65
Q

Industrial partner
Share in Profit GR and XPN

A

GR: Stipulation
XPN: No stipulation - Just and equitable

Note:
IP has no share in LOSS, but liable for contractual liability

66
Q

Industrial partner is also a capitalist partner
GR and XPN

A

GR: Stipulation
XPN: No stipulation -
CC + Just and Equitable

67
Q

Designation of share in profits and losses by a third person
GR and XPn

A

GR: Third parties are not allowed. Only partners are allowed to decide - mutuality principle
XPN: TP was allowed
Effect: VALID

If agreed upon, can the partners question the TP’s decision?
GR: NO, decision is binding on them
XPN: If decision of TP is manifestly inequitable
Effect: not valid

NOTE: It can be questioned within 3 months from knowledge of decision of the official partner
XPN to XPN: if it has
1. Lapsed (3 months)
2. Decision has been Executed (no reklamo)

68
Q

Pactum Leonina

A

Art 1799
A stipulation which excludes one or more partners from any share in the profits or losses is void.

If made at the:
Start - partnership is VOID.
after the creation - Partnership is valid, but stipulation is VOID

69
Q

Acts of Administration v. Acts of Ownership

A

Art 1800
Acts of Administration
- usual course of business, day-to-day
- Managing partner

Acts of Ownership
- Alteration
- Strict dominion
- about properties
- ALL the partners are involved

70
Q

Controlling interest v. Majority of partners

A

Art. 1800

Controlling interest
- based on capital contribution
- mas importante

Majority of partners
- based on number of partners

71
Q

Can we remove the Managing partner?

A

Art 1800

IT DEPENDS

If MP is appointed at the start (in articles of partnership)
GR: IRREVOCABLE
XPN: If removal is
1. Just and lawful cause
2. Vote of Controlling interest

If MP is appointed after - YES, revocable because mere agent

72
Q

Can a TP who is a Managing partner be removed?

A

YES, anytime since he is not a partner.

73
Q

2 or more Managing partners without specification of their respective duties

  • unanimity is not required
A

Art 1801
GR: Each one may separately execute all acts
of administration

XPN: If one of the MP opposes, decision of majority of the MPs will prevail

XPN TO XPN: In case of tie, Vote of controlling interest of partners

74
Q

2 or more Managing partners

  • unanimity is required
A

Art 1802
GR: Unanimous consent of ALL MPs

XPN: Imminent danger of grave or irreparable injury to the partnership.

75
Q

What happens when the partnership did not agree about the manner of management?

(No MP was appointed)

A

Art 1803

GR: ALL are MPs
Follow the rules of 1801
- majority of the MPs
- vote of controlling interest of partners

GR: Consent of ALL partners is needed for alteration in the immovable property of the partnership, even if it may be useful to the
partnership.
XPN: refusal - manifestly prejudicial to the
interest of the partnership
Effect: Court intervention

76
Q

Is sub-partnership allowed?

A

Yes, but the sub-partner is not admitted into the partnership without the consent of the other partners

Art. 1804. 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.

77
Q

Where to keep the partnership books?

A

Art 1805
GR: Stipulation/ agreement between the partners
XPN: Principal place of business of the partnership

GR: Right of inspection at any
reasonable hour
XPN: Unreasonable hour/day

78
Q

Is there a duty to render information to the other partners?

A

Yes. Duty to voluntary Disclosure of material facts

Why? Because of fiduciary relationship

Ex:
1. Buyer buying partnership lands
2. Gold mine in area

79
Q

Partner accountable as fiduciary

A

Art 1807

Secret profit/commission - NOT ALLOWED

Case: Catalan v Gatchalian
- if within 1 year and a partner buys property from his personal property, property belongs to the partnership
- if 1 year has lapsed, property belongs to the partner

Effect if violated:
1. must account to the partnership
2. holds as trustee

80
Q

Is a capitalist partner allowed to engage in another business?

A

Art 1808
GR: Same business not allowed
XPN: There is consent of the partners / stipulation to the contrary
Effect if violated:
- Bring to the common funds any profits accruing to him
- Personally bear all the losses

81
Q

Is right to formal accounting allowed?

A

Art 1809
GR: NOT allowed, because it disrupts the flow of operations
XPN: [4] Instances when it is allowed
- Wrongfully excluded from the partnership business or possession of its property by his co-partners;
- Stipulation or agreement
- 1807- secret profits
- Just and reasonable - other circumstances

82
Q

What are the property rights of a partner? [3]

A

Art. 1810. The property rights of a partner are:
(1) His rights in specific partnership property (SPP);
(2) His interest in the partnership (only assignable right) - Profit and Surplus (during dissolution); and
(3) His right to participate in the management (n)

83
Q

What are the incidents where a partner is co-owner with his partners of specific partnership property? [4]

A

Art 1811

  1. Possession
    - For partnership purpose? YES
    - For personal purpose? NO
    - XPN: Consent of all
  2. Assignment of right SPP
    GR: NOT allowed
    XPN: Consent of all
  3. Attachment/Execution - attach (beginning), execute (end)
    GR: NOT allowed
    XPN: Consent of all

Note

  • Separate creditor can attach to the separate property and the partnership interest of the partner, but not to the partnership property
    • Charging order-interest attached
  • Separate creditor = preferred in separate property (1814)
  • Partnership creditor = preferred in partnership property
  1. Legal support - NOT subject
84
Q

How is charging order removed? [2]

A
  1. Partnership property - consent of all partners
  2. Separate property of other partners
85
Q

Effect of assignment of partner’s whole interest

How?

A

Three ways of becoming an assignee
1. Selling interest to TP
2. Donating interest to TP
3. Using interest as a security for loan

Rights NOT given

  • Manage
  • Inspect
  • Ask information

Rights given

  • profit / surplus (INTEREST - 1812)
86
Q

Where to register the partnership?

A

SEC (partnership and corp) and DTI (business name and sole prop), CDA - coop

87
Q

Firm name rules

A
  • may or may not include the names of the partners

Note:
Art. 1815. Every partnership shall operate under a firm name, which may or may not include
the name of one or more of the partners.
Those who, not being members of the partnership, include their names in the firm name, shall be
subject to the liability of a partner.

88
Q

Firm name rules

A

Art 1815.

a. Liability of Third person’s name if included - liability only, not a partner to the partnership

b. Death of a partner -
GR : cannot use the firm name
XPN: If informed to the public

c. Inclusion of a Limited partner’s name - if included, will be liable like a general partner

d. Should not be similar to another name

89
Q

Liability for contractual obligations

A

Art. 1816. All partners, including industrial ones, shall be liable pro rata with all their property and after all the partnership assets have been exhausted, for the contracts which may be entered into in the name and for the account of the partnership, under its signature and by a person authorized to act for the partnership. However, any partner may enter into a separate obligation to perform a partnership contract.

Note:

  • PRO RATA - Equally, jointly, based on number of partners
  • SUBSIDIARY - only after the partnership assets have been exhausted
90
Q

Is industrial partners liable for losses? for contractual liability?

A
  • losses - NO
  • contractual liability - YES
91
Q

Stipulation against liability

A

Art. 1817. Any stipulation against the liability laid down in the preceding article shall be void, except as among the partners.

Summary

  • As to partners - VALID
  • As to TPs - VOID
92
Q

Art 1818 first par.

Acts of administration

A

GR: Every partner is an agent of the partnership.

XPN:
1. TP knows
2. Partner is not authorized

93
Q

Art 1818 2nd par

Acts of ownership

A

An act of a partner which is not apparently for the carrying on of business of the partnership in the usual way does not bind the partnership unless authorized by the other partners.

Consent of ALL PARTNERS [7 instances]

(1) Assign the partnership property in trust for creditors or on the assignee’s promise to pay
the debts of the partnership;
(2) Dispose of the good-will of the business;
(3) Do any other act which would make it impossible to carry on the ordinary business of a
partnership;
(4) Confess a judgment;
(5) Enter into a compromise concerning a partnership claim or liability;
(6) Submit a partnership claim or liability to arbitration;
(7) Renounce a claim of the partnership.

No act of a partner in contravention of a restriction on authority shall bind the partnership to persons having knowledge of the restriction.

94
Q

Admission of a partner (1820)

A

During existence of partnership [requisites] - binding against partnership if:
1. concern of partnership affairs
2. scope of authority
3. must be ??

After dissolution - binding against the partners
- winding up of partnership affairs

95
Q

Notice to, or knowledge of, a partner of matter affecting partnership affairs (1821)

A

Cases of knowledge of a partner
1. Knowledge of the partner acting in the particular matter acquired while a partner;
2. Knowledge of the partner acting in the particular matter then present to his mind; and
3. Knowledge of any other partner who reasonably could and should have communicated it to the acting partner.

96
Q

Effect of conveyance of real property

A

Art 1819
GR: Property purchased with partnership funds belongs to the partnership

Ownership v interest

97
Q

Art 1819 1st par

A

Partnership name + Partnership name + No authority to sell (only one partner)

What is transferred?
- ownership to TP

Can partnership recover?
GR: YES
XPN:

  • 1818 - Acts of administration (agent)
  • TP buyer is in good faith
97
Q

Art 1819 2nd par

A

Partnership name + Own name + No authority to sell (only one partner)

What is transferred?
- Equitable interest

Can partnership recover?
GR: YES

98
Q

Art 1819 3rd par

A

One or more partner + One or more partner + sold by them

What is transferred?
- ownership to TP

Can partnership recover?
GR: YES
XPN:

  • 1818 - Acts of administration (agent)
  • TP buyer is in good faith
99
Q

Art 1819 4th par

A

One or more in trust+ One or more in trust+ sold by them

What is transferred?
- Equitable interest

Can partnership recover?
GR: YES

100
Q

Art 1819 5th par

A

Name of all + Name of all + ALL

Can partnership recover?
NO

101
Q

Solidary liability of partnership and partners

A

1822
Wrongful act or omission / torts/ quasi-delict
Who is liable

  • if loss - agreement, profit sharing, capital contribution
  • if torts - SOLIDARILY liable (partners + partnership)

1823
Breach of trust (Misapplied) - ex. MP used for personal use
Liability: SOLIDARY liable ang Partners and Partnership

1824
Nature of liability: SOLIDARY

102
Q

Partnership by Estoppel v Partner by Estoppel

A

1825

Partnership by Estoppel
If all partners agreed
- Who is liable? Partners, Partner who contracted with TP, and the Partnership

_Partner/s by Estoppel__
If few or none partners agreed / partnership is not legit and all partners did not agree / partnership is not legit and few partners agreed
- Who is liable? Partners who agreed, and the Partner who contracted with TP

Partnership is not liable
Partner by estoppel - tp lang liable

103
Q

Liability of Incoming partners

A

Art. 1826. A person admitted as a partner into an existing partnership is liable for all the
obligations of the partnership arising before his admission as though he had been a partner when such obligations were incurred, except that this liability shall be satisfied only out of partnership property (not personal property), unless there is a stipulation to the contrary.

104
Q

Preference of Partnership creditors in partnership property

A

Art 1827

Separate C - Separate Prop
Part C - Part prop

note: private creditors of each
partner may ask the attachment and public sale of the share of the latter in the partnership assets.

105
Q

Is partnership terminated when there is dissolution?

A

NO. Art 1829

106
Q

Exception to Art 1831

A

On the application of the purchaser of a partner’s interest under article 1813 or 1814:
(1) After the termination of the specified term or particular undertaking;
(2) At any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued.

107
Q

1832

A

GR: Dissolution terminates the actual authority of partners to undertake a business/
XPN:

  • Necessary to wind up
  • Complete transaction began but not yet finished

1. With respect to PARTNERS (1833)

  • Not Act Insolvency Death - notice on knowledge is immaterial
  • AID -notice or knowledge is immaterial
  • liability of partners - separate prop

2. With respect to TP (1834)
- liability of partnership

108
Q

Right of contribution from partners

(dissolved na, can partners still be liable?)

A

If AID (acts, insolvency, death), each
partner is liable to his co-partners for his share of any liability created by any partner acting for the partnership as if the partnership had not been dissolved

XPN: partners liable

  • If Act - had knowledge of the dissolution
  • If Death/ insolvency - had knowledge OR notice
    • GR: liable
    • XPn: no knowledge
    • XPn to XPN: with knowledge or notice (personal liability)

if no knowledge not liable

“if a partner did not know that a partner died, then the partnership in his mind still exists, he has reason to act and bind the partnership. But if he knew that his partner had died then the effect of the death of the partner dissolves the partnership therefore he cannot bind the partnership with the transaction with someone else”

109
Q

1834 Power of partner to bind the dissolved partnership to TPs

A

1st par
Instances when partnership is liable
1. Winding up
2. Complete transactions began but not yet finished
3. Existing creditors - actual knowledge or notice
- TP - newspaper publication

2nd par
Dormant partner is not liable - out of partnership assets alone

3rd par
Partnership NOT bound to liability
- unlawful to carry on the business
- partner has become insolvent (void)
- partner had no authority to wind up

Note:
- if partnership creditors - personal notice
- if TP - newspaper publication

110
Q

Art 1835 Effect of dissolution on partners existing liability

A

GR: dissolution does not of itself discharge the existing liability of any partner
XPn: agreement between ALL parties, creditor himself, deceased partner

111
Q

Manner of winding up

A

Art 1836
Types

  • Judicial
  • Extrajudicial

Order

  • if w stipulation - WP or LP
  • not wrongfully dissolved - only innocent partners, not guilty partner
  • legal representative of the last surviving partner not insolvent
112
Q

1837

A

Rights where dissolution NOT in contravention of agreement

  • Partnership properties will be APPLIED
  • Surplus distribution

Rights where dissolution in contravention of agreement
innocent partner rights

  • Partnership properties will be applied for payment of liabilities
  • to be indemnified for damages
  • continue business
  • possess partnership properties

guilty partner rights
1. If business is continued

  • interest is ascertained, paid in cash,
  • released from all liabilities, pay damages
  1. If biz not continued
  • Apply
  • Surplus less damage
113
Q

1838 Rights of injured partner where partnership contract RESCINDED

A

Ground: fraud or misrepresentation

Rights

  • lien or retention, but priority ang partnership creditors
  • subrogation in place of partnership creditors, but partnership creditors ang priority
  • indemnification of damages by guilty partners
114
Q

1839 Liquidation and distribution of assets

A
  1. Assets of partnership
  • partnership property
  • addtl contribution
  1. Order of payment
    General partnership
  • partnership creditors
  • partner - creditor
  • GP - capital
  • GP - profits

Limited partnership

  • partnership creditors
  • LP - profit
  • LP - capital
  • partner - creditor
  • GP - profits
  • GP - capital

If partner is insolvent - separate creditor

In case of loss - right to enforce contribution

115
Q

Dissolution of partnership by change in membership [6]

  • equal ang existing and subsequent creditors
A

Art 1840
(1) When any new partner is admitted into an existing partnership, or when any partner
retires and assigns (or the representative of the deceased partner assigns) his rights in partnership
property to two or more of the partners, or to one or more of the partners and one or more third
persons, if the business is continued without liquidation of the partnership affairs;
(2) When all but one partner retire and assign (or the representative of a deceased partner
assigns) their rights in partnership property to the remaining partner, who continues the business
without liquidation of partnership affairs, either alone or with others; cd
(3) When any partner retires or dies and the business of the dissolved partnership is
continued as set forth in Nos. 1 and 2 of this article, with the consent of the retired partners or the
representative of the deceased partner, but without any assignment of his right in partnership
property;
(4) When all the partners or their representatives assign their rights in partnership property to
one or more third persons who promise to pay the debts and who continue the business of the
dissolved partnership;

(5) When any partner wrongfully causes a dissolution and the remaining partners continue
the business under the provisions of article 1837, second paragraph, No. 2, either alone or with
others, and without liquidation of the partnership affairs;
(6) When a partner is expelled and the remaining partners continue the business either alone
or with others without liquidation of the partnership affairs.
The liability of a third person becoming a partner in the partnership continuing the business,
under this article, to the creditors of the dissolved partnership shall be satisfied out of the
partnership property only, unless there is a stipulation to the contrary.
When the business of a partnership after dissolution is continued under any conditions set forth
in this article the creditors of the dissolved partnership, as against the separate creditors of the
retiring or deceased partner or the representative of the deceased partner, have a prior right to
any claim of the retired partner or the representative of the deceased partner against the person or
partnership continuing the business, on account of the retired or deceased partner’s interest in the
dissolved partnership or on account of any consideration promised for such interest or for his
right in partnership property.

116
Q

Incoming partner

Deceased partner

A
  • out of partnership assets
  • no liability
117
Q

Rights of legal representative of deceased / retiring partner

A

Art 1841
1. Interest is ascertained
2. Receive it

118
Q

Persons liable to render account

A

Art 1842
1. Winding up partner
2. Surviving partner
3. Person or partnership continuing the business

RFBT (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions