Helen C. Arevalo 3 Section 3D
Among partners, mutual agency arises and thedoctrine of
allows them to have thepower to dissolve the partnership. Any partner may, athis sole pleasure, dictate dissolution at will. He must,however, act in good faith or he’ll be liable for damages.
Application of principles of estoppel –
Partnership liability may be imposed when one holdshimself out, or permits himself to be held out, as apartner. There is no actual or legal partnership relationbut merely a partnership liability imposed by law infavor of third persons.
Legal capacity of the parties to enter into thecontract
General rule: any person who iscapable of entering into contractual relations may be apartner. The following cannot:1.)
Insane or demented persons;3.)
Deaf-mutes who do not know how to write;4.)
Persons who are suffering from civil interdiction;5.)
Incompetents who are under guardianship.Persons who are prohibited from giving each otherany donation cannot enter into a universal partnership.
There is no prohibition against apartnership being a partner in another partnership. Allthe members of the constituent partnerships will be heldliable to the creditors of the combined partnership.
Unless authorized by statute or byits charter, a corporation is without capacity or power toenter into a contract of partnership. This is based onpublic policy, since in a partnership the corporationwould be bound by the acts of persons who are not itsduly appointed and authorized agents and officers,which would be entirely inconsistent with the policy thatthe corporation shall manage its own affairs separatelyand exclusively.Exceptions:1.)
Joint ventures where the nature of the venture isin line with the business authorized by itscharter.2.)
Partnership agreement provides that the twopartners will manage the partnership so that themanagement of corporate interest is notsurrendered.3.)
Entry of foreign corp as a limited partner in alimited partnership merely for investmentpurposes.
Contribution of money, property, or industry to acommon fund
Existence of proprietary interest –
The partnersmust have a proprietary interest in the business orundertaking, that is, they must contribute capital whichmay be money, or property, or their services, or both, tothe common business.
Legal tender in the Phils.
Real or personal, corporeal or incorporeal.
Active cooperation, the work of the partyassociated.
Proof of contribution
Proof is necessary thatthere be contribution of money, property, or industry toa common fund with the intention of dividing the incomeor profits obtained therefrom. If only one partner gives,no enforceable contract exists.
Legality of the object
The object is unlawful when it is contrary to law,morals, good customs, public order, or public policy. If purpose unlawful, no partnership can arise as thecontract is inexistent and void
Purpose to obtain profits
The very reason for existence of partnership –
The idea of obtaining pecuniary profit or gain is the veryreason for the existence of a partnership.
Need only be the principal, not exclusive aim –
pecuniary profit need not be the exclusive aim. It issufficient that it is the principal purpose even if thereare, incidentally, other ends.
Sharing of profits
Not necessarily in equal shares –
There must beintention to divide the profits but not necessarily inequal shares. There must be a joint interest in theprofits.A stipulation which excludes a partner from anyparticipation in the profits is void.
Not conclusive evidence of partnership –
Thesharing of profits is merely presumptive and notconclusive evidence of partnership.
Sharing of losses
Necessary corollary of sharing in profits –
Theright to share in the profits carries with it the duty tocontribute to the losses, if any. A community in losses isa necessary corollary of a participation in profits.
Agreement not necessary –
It is not necessary forthe parties to agree on a system of sharing losses, forthe obligation is implied from the partnership relation. If only the share of each partner in the profits has beenagreed upon, the share of each in the losses shall be inthe same proportion.Generally, a stipulation which excludes one or morepartners from any share in the profits or losses is void.
Art. 1768. The partnership has a juridicalpersonality separate and distinct from that of eachof the partners even in case of failure to complywith the requirements of art. 1772, 1
paragraph.Partnership, a juridical person
As an independent juridical person, a partnershipmay enter into contracts, acquire and possess propertyof all kinds in its name, as well as incur obligations andbring civil or criminal actions.Thus, a partnership may be declared insolvent even if the partners are not. It may enter into contracts andmay sue and be sued in its firm name or by its dulyauthorized representative. It is sufficient that service of summons be served on any partner.