Partnership Ch 1 (1767-1783))

Question 1

Article 1767

Answer 1

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 profits among themselves.

Two or more persons may also form a partnership for the exercise of a profession

Question 2

Article 1768

Answer 2

The partnership has a juridical personality separate and distinct from that of each of the partners, even in case of failure to comply with the requirements of Article 1772, first paragraph.

Question 3

Article 1769

Answer 3

In determining whether a partnership exists, these rules shall apply.
1. Partners who are not partners to each other are not partners as to third persons
2. Co-Ownership doesn’t establish a partnership by itself
3. The sharing of gross returns doesn’t establish a partnership by itself
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, but no such inference shall be drawn if such profits were received in payment:
-As a debt by installments or otherwise
-As wages of an employee or rent to a landlord
-As an interest on a loan
-As the consideration for the sale of a goodwill of a business or other property by installments or otherwise.

Question 4

Article 1770

Answer 4

A partnership must have a lawful object or purpose and must be established for the common benefit or interest of the partners.

When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the state, without prejudice to the provisions of the penal code governing the confiscation of the instruments and effects of a crime.

Question 5

Article 1771

Answer 5

A partnership may be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary.

Question 6

Article 1772

Answer 6

Every contract of partnership having a capital of three thousand pesos or more, in money or property, shall appear in a public instrument, which must be recorded in the Office of the Securities and Exchange Commission.

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.

Question 7

Article 1773

Answer 7

A contract of partnership is void, whenever immovable property is contributed thereto, if an inventory of said property is not made, signed by the parties, and attached to the public instrument

Question 8

Article 1774

Answer 8

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.

Question 9

Article 1775

Answer 9

Associations and societies, whose articles are kept secret among the members, and wherein anyone 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.

Question 10

Article 1776

Answer 10

As to its object, a partnership is either universal or particular
As regards to the liability of the partners, a partnership may be general or limited.

Question 11

Article 1777

Answer 11

A universal partnership may refer to all the present property or to all the profits

Question 12

Article 1778

Answer 12

A partnership of all present property is that in which the partners contribute all the property which actually belongs to them to a common fund, with the intention of dividing the same among themselves, as well as all the profits they may acquire therewith.

Question 13

Article 1779

Answer 13

In a universal partnership of all present property, the property which belonged to each of the partners at the time of the constitution of the partnership, becomes the common property of all the partners, as well as all the profits which they may acquire therewith.

A stipulation for the common enjoyment of any other profits may also be made; but the property which the partners may acquire subsequently by inheritance, legacy, or donation cannot be included in such stipulations, except for the fruits thereof.

Question 14

Article 1780

Answer 14

A universal partnership of profits comprises all that the partners may acquire by their industry or work during the existence of the partnership.
Movable or Immovable property which each of the partners may possess at the time of the celebration of the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership.

Usufruct is the right to enjoy the use and advantages of another’s property short of the destruction or waste of its substance.

Question 15

Article 1781

Answer 15

Articles of universal partnership entered into without specification of its nature, only constitute a universal partnership of profits

Question 16

Article 1782

Answer 16

Persons who are prohibited from giving each other any donation or advantage cannot enter into a partnership

Question 17

Article 1783

Answer 17

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