Partnership QUAMTO Flashcards
Can a husband and wife form a limited partnership
to engage in real estate business, with the wife being a limited
partner?
a.Yes. The Civil Code prohibits a husband and wife from
constituting a universal partnership. Since a limited
partnership is not a universal partnership, a husband and wife
may validly form one.
b) Yes. While spouses cannot enter
into a universal partnership, they can enter into a limited
partnership or be members thereof (CIR u. Suter, etal. 27
SCRA 152).
Can two corporations organize a general partnership under
the Civil Code of the Philippines?
No, A corporation is managed by its board of
directors. If the corporation were to become a partner,
co-partners would have the power to make the corporation
party to transactions in an irregular manner since the partners
are not agents subject to the control of the Board of
Directors. But a corporation may enter into a joint venture
with another corporation as long as the nature of the venture
is in line with the business authorized by its charter. (Tuason
& Co., Inc. v. Bolano, 95 Phil. 106)
Can a corporation and
an individual form a general partnership?
a.) As a general rule a corporation may not form a general
partnership with another corporation or an individual because
a corporation may not be bound by persons who are neither
directors nor officers of the corporation.
However, a corporation may form a general partnership with
another corporation or an individual provided the following
conditions are met:
1) The Articles of Incorporation of the
corporation expressly allows the corporation to enter
into partnerships;
2) The Articles of Partnership must provide that
all partners will manage the partnership, and they shall be
jointly and severally liable; and
3) In case of a foreign corporation, it must be
licensed to do business in the Philippines.
b) No. A corporation may not be a general partner because
the principle of mutual agency in general partnership
will violate the corporation law principle that only the board
of directors may bind the corporation.
Dielle, Karlo and Una are general partners in a merchandising
firm. Having contributed equal amounts to the capital, they
also agree on equal distribution of whatever net profit is
realized per fiscal period. After two years of operation,
however, Una conveys her whole interest in the partnership to
Justine, without the knowledge and consent of Dielle and
Karlo.
1. Is the partnership dissolved?
12%]
2. What are the rights of Justine, if any, should she desire to
participate in the management of the partnership and in the
distribution of a net profit of P360.000.00 which was realized
after her purchase of Una’s interest?
- No, a conveyance by a partner of his whole interest in a
partnership does not of itself dissolve the partnership in the
absence of an agreement. (Art. 1813. Civil Code) - Justine cannot interfere or participate in the management or administration of the partnership business or affairs. She may,
however, receive the net profits to which Una would have
otherwise been entitled. In this case, P120.000 (Art. 1813,
Civil Code)
Pauline, Patricia and Priscilla formed a business partnership
for the purpose of engaging in neon advertising for a term of
five (5) years. Pauline subsequently assigned to Philip her
interest in the partnership. When Patricia and Priscilla learned
of the assignment, they decided to dissolve the partnership
before the expiration of its term as they had an unproductive
business relationship with Philip in the past. On the other
hand, unaware of the move of Patricia and Priscilla but
sensing their negative reaction to his acquisition of Pauline’s
interest, Philip simultaneously petitioned for the dissolution
of the partnership.
1. Is the dissolution done by Patricia and Priscilla without
the consent of Pauline or Philip valid? Explain.
2. Does Philip have any right to petition for the dissolution of the partnership before the expiration of its
specified term? Explain.
1, Under Art. 1830 (1) (c) of the NCC, the dissolution by
Patricia and Priscilla is valid and did not violate the contract
of partnership even though Pauline and Philip did not
consent thereto. The consent of Pauline is not necessary
because she had already assigned her interest to Philip. The
consent of Philip is not also necessary because the assignment
to him of Pauline’s interest did not make him a partner, under
Art, 1813 of the NCC.
No, Philip has no right to petition for dissolution because
he does not have the standing of a partner (Art. 1813 NCC)
A, B and C formed a partnership for the purpose of
contracting with the Government in the construction of one
of its bridges. On June 30, 1992, after completion of the
project, the bridge was turned over by the partners to the
Government. On August 30, 1992, D, a supplier of materials
used in the project sued A for collection of the indebtedness
to him. A moved to dismiss the complaint against him on the
ground that it was the ABC partnership that is liable for the
debt. D replied that ABC partnership was dissolved upon
completion of the project for which purpose the partnership
was formed. Will you dismiss the complaint against A If you
were the Judge?
As Judge, I would not dismiss the complaint against A.
because A is still liable as a general partner for his pro rata
share of 1/3 (Art. 1816, C. C.J. Dissolution of a partnership
caused by the termination of the particular undertaking
specified in the agreement does not extinguish obligations,
which must be liquidated during the “winding up” of the
partnership affairs (Articles 1829 and 1830. par. 1-a, Civil
Code).
Stating briefly the thesis to support your answer to each of
the following cases, will the death - of a partner terminate the
partnership?
Yes. The death of a partner will terminate the partnership, by
express provision of par. 5, Art. 1830 of the Civil Code.
W, X, Y and Z organized a general partnership with W and X
as industrial partners and Y and Z as capitalist partners. Y
contributed P50,000.00 and Z contributed P20,000.00 to the
common fund. By a unanimous vote of the partners, W and
X were appointed managing partners, without any
specification of their respective powers and duties.
A applied for the position of Secretary and B applied for the
position of Accountant of the partnership.
The hiring of A was decided upon by W and X, but was
opposed by Y and Z.
The hiring of B was decided upon by W and Z, but was
opposed by X and Y.
Who of the applicants should be hired by the partnership?
Explain and give your reasons.
A should be hired as Secretary. The decision for the
hiring of A prevails because it is an act of administration
which can be performed by the duly appointed
managing partners, W and X.
B cannot be hired, because in case of a tie in the decision
of the managing partners, the deadlock must be
decided by the partners owning the controlling
interest. In this case, the opposition of X and Y prevails
because Y owns the controlling interest. (Art. 1801,
Joe and Rudy formed a partnership to operate a car repair
shop in Quezon City. Joe provided the capital while Rudy
contributed his labor and industry. On one side of their shop,
Joe opened and operated a coffee shop, while on the other
side, Rudy put up a car accessories store. May they engage in
such separate businesses? Why?
Joe, the capitalist partner, may engage in the restaurant
business because it is not the same kind of business the
partnership is engaged in. On the other hand, Rudy may not
engage in any other business unless their partnership
expressly permits him to do so because as an industrial
partner he has to devote his full time to the business of the
partnership [Art. 1789, CC)
A, B and C formed a partnership for the
purpose of contracting with the Government in
the construction of one of its bridges. On June 30,
1992, after completion of the project, the bridge
was turned over by the partners to the
Government. On August 30, 1992, D, a supplier
of materials used in the project sued A for
collection of the indebtedness to him. A moved
to dismiss the complaint against him on the
ground that it was the ABC partnership that is
liable for the debt. D replied that ABC
partnership was dissolved upon completion of
the project for which purpose the partnership was formed. Will you dismiss the complaint against
A If you were the Judge?
NO, as Judge, I would not dismiss the complaint
against A because A is still liable as a general partner
for his pro rata share of 1/3 (Art. 1816). Dissolution of
a partnership caused by the termination of the
particular undertaking specified in the agreement does
not extinguish obligations, which must be liquidated
during the “winding up” of the partnership affairs.
(Arts. 1829 and 1830, par. 1[a])
A, B, and C entered into a partnership to operate
a restaurant business. When the restaurant had
gone past break-even stage and started to garner
considerable profits, C died. A and B continued the
business without dissolving the partnership. They
in fact opened a branch of the restaurant, incurring
obligations in the process. Creditors started
demanding for the payment of their obligations.
a. Who are liable for the settlement of the
partnership’s obligations? Explain?
b. What are the creditors’ recourse/s?
Explain.
a. The two remaining partners, A and B, are liable.
When any partner dies and the business is
continued without any settlement of accounts as
between him or his estate, the surviving partners
are held liable for continuing the business provided
that A and B had knowledge or notice of the death
of C. (Art. 1841, 1785, par 2, and Art 1833)
b. Creditors can file the appropriate actions, for
instance, an action for collection of sum of money
against the “partnership at will” and if there are no
sufficient funds, the creditors may go after the
private properties of A and B (Art 1816). Creditors
may also sue the estate of C. The estate is not
excused from the liabilities of the partnership even
if C is dead already but only up to the time that he
remained a partner (Art. 1829, 1835, par 2; Testate
Estate of Mota v. Serra, G.R. No. L-22825, February
14, 1925). However, the liability of C’s individual
properties shall be subject to the prior payment of
his separate debts. (Art. 1835, par 3)
Can two corporations organize a general
partnership under the Civil Code of the Philippines?
NO. A corporation is managed by its board of
directors. If the corporation were to become a partner,
co-partners would have the power to make the
corporation party to transactions in an irregular
manner since the partners are not agents subject to the
control of the Board of Directors. But a corporation may
enter into a joint venture with another corporation as
long as the nature of the venture is in line with the
business authorized by its charter. (Tuason & Co., Inc. v.
Bolano, 95 Phil. 106)
Can a corporation and an individual form a
general partnership?
NO. A corporation may not be a general partner
because the principle of mutual agency in general
partnership allowing the other general partner to bind the corporation will violate the corporation law
principle that only the board of directors may bind
the corporation.
Will death of a partner terminate the
partnership?
YES. Death of a partner will terminate the
partnership, by express provision of par. 5, Art.
1830 of the Civil Code.
