aringuship By the contract of partnership two or more persons bind themselves ta contribute money, ropeny or industry to a comimon fund, with the intention of dividing the profite ainony thamseives, + Two or mere persons may also fcfm a partnership for the exercise of @ profession (Article 1767), ESSENTIAL REQUISITES (C°OP-G) 4. There must be a valid contract 2. ‘The parties must have legal capacity to enter ino the contract: 3. There must be a mutual gontribation of money, properly, of industry 19 @ common fund: 4. The gbject or purpose must be lawfel, (Art {770}, 5. The primary gurpose must be to obtain profile to divide the same among the parties; and ©. ‘There must be at least one general partner. Note: Although @ corporation cannot enter into a partnership contract, it may however engage in a Joint venture, (Aurhach v. Sanitery Wares Manufacuring Corporation, GR No. 75876, Decumber 18, 1888). Common Fund: a partnership may he deems 10 ‘exist among parties who agree to borraw money ta pursue @ business and to divide the profits 21 losses that may erise therefrom. even if it is shown thal they have not contribuled any aapital of their awn to a “common fund," as. thelr contribution fo such fund could be an intanglbie like credit or industry (Lim Tong Lim v. Phil Fishing Gear industries. November 3, 1999). lac. GR No, 136448, page a i aah Be ae rt cays MERCANTILE VIEW OF THE NATURE OF A PARTNERSHIP (Ait. 1768) ‘A partnership has a juridical personality separate ‘and distinct from thet of each of the partners, RULES TO DETERMINE EXISTENCE OF A PARTNERSHIP (Art, 1769) General rule: Perscris who ars not partners ae to each vther are not partnere as to thied persons. Exception: Partnership by estopp! 1, Co-ownership: of @ property does not itself establish @ parttership, even though the co- owners share inthe profits derived from the incident of jaint ownership, 2 Sharing of ‘grags returns atone does not Indicate a partvership, whether cr not the persons sharing thers have a joint or common Fight or interest in any prooeity from which the a on Rae oi ng ak ete rth TR onsliealon 3, ooodwil overly by wal ear an chal scadanis operat, MENO'O ADEL SANTOS chattel eperaens, SKATE SARAN TRA ce ‘cu cha for nace, ENE KINA ACOSTA ie ch ar 99, ACE IEL0 CONCEPCION ech forages, 29 and fy el ARIA OAWIAFLOR: {les and Ses, JAN MACE E EYES cote ahaws eens ‘tun Aig, Lloyd gene Apostl canna Aeibre 0 9ean 3%, oy Fane Seanez, angela. calblang Unum Conger, iene Pais Domings Ang Oieds dee Reyes. Marana Cin Manda, kita ConeueionO Jevreelonéne "agit Foren Chaiss2 Enanei’seano, Cars Eypana, Oana Fajr, eep Kratine Cosmet Gonua'es,Oasy 207 Ine, Raed Joson, lake Lams, Focerina Loven, Some Matas, Herbert Maen, Ch re hone Sunes, Pe hose Santo, Chaat Sayre, Many (ene, Philp Toes, Sls Vuarsevs Joan Grace Witon, otras Vilas, faut Gano cpraco Nalellad ALCURDLS STNGA suyect chal, SHEENA MARIE ABEL'A nsiaut sublet cho, RCE ARVIN G.NO ed, FRARCESCA LOURDES NGA ns CRISELIN CARAYUGAN property, MIA ELISA CURATOAIARIDO an MERY VY ANE GALANG wils and succession, RAMO ard COLLEEN INFANTE obi tons and contrac, MARY IV” AINE GALANG sets leat, EVA CHRISTINE NAPARAAY firteestip,ageney and Cant, KATHERINE AKM ASLO ct tanec 5 UR MASUE ABELIA ets Sd orzo, IAN PEARL PORTUGAL and Issac Bavramecs, Barra lnfir aut, ln Ba, Leen Saseo nesta Osrvay lone Tharete Dat, Heron Devi yeh Uline ‘sate Wambut iu, cara, i Surat,Soon Bra Call s Test of Partnershiy Existence 1. Whether of r.tstheré te an agreement to contrite moisy, property, er Industry 16-6 common fund; end 2, Whether of net there. Is an intent of the contracting parte to aide the profits among ‘themselves, ERFECTS OF UNLAWEUL PARTHERSHIP 4, The contract I$ vold ab Tato _ B._ The profs that bo confiscated In favor of the ~) governmer.t 4. The Instrumente of tools and proceeds of the crime shall be forfeited In fevor ot the government; aris 4, The contritutions of the partners shail not be ‘confiscated unl 236 they fall under No. 3, Note: oe © Aparinership Is dissolved by operation of law. Upon the happer ing of an event whish maces unlewful for thy business of tha partnership tobe carried on oF for the members to cany It ‘on In partnershis. 4 + Aludiciat decrad Is not necessary to dissolve an unlawful pa tnorahip. However, it-may some'imes be ex'=sable that a judilal decree of dissouuton by secured for tha converlence ofthe patios. + Where a part o! he business of a partnership ig legal and pt llega, an, nosount of that which is legat raey be had, FORM OF PARTNERSHIP CONTRACT Gonoraf rule: No stecal form Is required for its validity or existence (4rt. 1771) (Regard'ess of the value of the contribution), Exceptions: 4, Whore the conlract of partnership hes a capital of 3,000. pesus or mora, In monoy or property, it ehatlippear in a puble instument "and must be tovorded tn the Oitice of the Securities une. Exchange Commision. HOWEVER, a jsartrership has a jurdical personality even in cage of failure to comply wath this requirerte.st (Artiels 1772) 2, Where immovabl» preperty or raal rights are contributed (rmgei oss of tho value tievaoh a. Must be in Witing I @ public instrumant An inventory of the property contributed, signed by thit parties Is attached to the public. Histanent "(Article 1773), Otherwise, if there. Inno inventory = contract of partnership is vord, ¢. Must be recofved with the Pentster of Deeds wheru ths Immovable Is iocaled to bind third pertone, 4 Where the ofr fas itn the state ol frauds, Partnership and Co-ownorahip Distinguished (GUP3-D2AF7) Aways. ernated. py a[Generally, .created by’ ‘contact, either exptess|iaw, but may exist avon or impliog jwithiout a contract | CON deeper fae a juldiesiHas "no halen ‘personality casecata|poreunellly rec distinct from that of leach partner of vig Pica Powel actwath a percent in general a pattner may|A~ co-owner cannot bind the purtnershp: —jrepresent- the » cn |May be stinulated upon [Must |upon shores stipetation to contary Is VO10 proportionate ‘and any shel ‘always ss undivided for lmore tan 10 yours 12 t ] | it Mery atten clvit LAW| 20 Mc eran iil202 |2009 CENTRALIZED BAR OPERATIONS Sau Bene College of Hato Trausiasollly IA partner may —not|A co-owner can dispose) dispose of hie individual of his share without the Interest in the|consent of the others jpartnership so as to make the assignee a partner without \ lunanimous consent | [Portier cannot tranefer|Stockholier has Tia. interest in. telgenetaly the right Datinership. 30. #8 tollransferis_ shares make the wensferee ulwithaut prior consort of pariner vithoitthe|the other stockholders tinanimous. consent. of! iall.ihe existing parners: Partnership and Corporation Distinguished (CNJ-PMERETZ-FOG} ence Ee ip. may Be|corporation may not be| [partners established for any|formed for a term in pxtiod of time stipilated|excess of 60 years! by the partners jextendible to not more ithan 86 years in any] jon instance eT incerporators (except al |corporation ole) iron execution of the contract issuance oF /—the of partnership |certticate of [incorporation py they SEC corporation may adopt) required by law 10) add|any name provided it is line word “Ltd." To itsjnot the same as oF) pene simfar to any registered [firm name Rpg as [may be dissolved at anyjcan only be dissolved) time by any or al of the|with the consent of th| perners [Ean imay exercise any power[can exercise only the Jnuthorized by the}powers expressly) partners lgcanted by law om implied from those \granted or incident to its Woen management is Inot agreed upon, every ipertner Is an agent of the partnership IA partner as such can| ‘sue a co-partne. |mismanages suit aueinst a wha jmamber of ths bard of ldirectors or trustees! iwho minnenages rust be in the name of the| corporation Has such righ SER nab yasnicaipe Partners are gonerally/Stookholrers are liable jable for _partnership|only to the extent of the| debts to third persons jsharos subscribed by} th “0 governed by —_the|governed. ‘contract eng the Civil Corporetion Code. \Code JOINT VENTURE ‘Aa association of persons or companies jointly underteking seme commercial. enterprise; generally all contribute assets and share risks. (Kiosbayan, incorporated v. Guingona, Jr. OR. d 2. 2 ny econceaty UF nisiol cleeHtfovushN Me Yy ‘analogous contracts it place,San Henn College of Lay ©The main distinctos In common aw Jurisdiction Is that peilnceahip contemplates a "generat business wth scrne deyroe cf continu, while Joint centure Is formed! forthe “execution of a singla, transaction and is thus © oftemporaiy natura CLASSIFICATIONS OF FARTNERSHIP (OLDER-P2) 4. aso Dhiect 1. unlertel partners {ofall present properly ih, of profits ‘b, particular partnership 2... asto [lability of partirars: a, general partnership. b, limited partnershijy 3. az to Duration: a. partnership at will 'b._ partnership with a fixed period 4,” as to lagality of Exists oo! fa de lure partnershiy b, de facto partnorst ip 5. as to Repreventation (o others: a, ordinary or real pertnsrship b, ostensible of park ership by esioppal 6, aste Publicity; a. socrot parinershi: b. notorious oF open panership 7. ato Purpose: a. commercal or tewiny b, professional or ma4-trading UNIVERSAL PARTNERBH!P 1. Universal Partnership of All Prosant Property : Cre wherein the péttners contribute ali the property which actu ly:bolong to them to a common fund, with xo intention of dividing the same amony thanselves, as woll ao all the profits which they may acquire therevdth (Art. 1770), + The property which’ helongs 10 each of the partners at tHe time cf the consttutior of the partno:ship, becomut the comman property «of al the partners, ta well as the profits which they may acquire thant, «© Unless otherwise sty slated In, the erticles of Univergal partnership ‘wil ba prasumed to be fa partnurahip of preitec # Future properties’ darindt be con‘ribten, Thus, property aubsaquently eoquired by (1) {nheritance. (2) levacy or, (8) donation cannot bbe included by. slpiration except the fruits thereof. JAEMORY AID IN CiVIL LAW] 203. Ne Universal Partnornalp of Profits Gne ‘which ccinprises all that the parnors may acquire by ther Industry or work during the’ existence of the purtnershi and the usufiuet of movably ot immovable nroperty ‘which each of the partners may posses at the time of the cotebration of the contract (At 1780), + Arieles of Universe! Partnersh’p entered into without specification of iis nature, only constitute & Universal Partnership of Profits (at. 1781) Reason: A. universal partnership of profits Imposes less obligetions on the partners, sinon they preserve the ownerhip of their separate property, + Persons who are pronibited fiom alving sack. other any donation or advantage cannot entor into « universal partnership (Art, /39, Atl. 87, Feraly Codd) (t'e 1782), Reason: 7% allow ther will be ike permitting them: to do Indireoty what the tow expressly prohitits. + Profits acquint! by ther partrers througls chance (Le, foltery): without employment of any physic.! or inteiiectual offor's. are not Included, PARTICULAR PARTNERSHIP COn2 which has for its abject determinate things, thelr use ot fruit, oF # specific undertaking, vr the exe’cise of a profession or vocation (Ax. 1783), KINDS OF PARTNERS 4, ag {6 the NATURE of contribution: ‘a, Capitalist partner + contrbutes rioney or property, b. Industrial partner ~ contributes oniy his ae Oadaral Pane co oxonds ANGE cea re" a Nea i at wea 703208 |2096 CENTRALIZED BAR OPERATIONS 10, 1b, Secret oatiner ~ tskes active part in the husiness but is not known to be a patlaer by outside parties nor held out ar a pariner by the other partners, ©. Dormant partner - dos not take active part In the business and is not known of held out as partner as to MEMBERSHIP: a. Real parner ~ one who is recy & ‘contributing, member of en existiig ive! partnership. b, Partner by Estoppel ~ or quasisartner. ‘One who Is not really a pariner but Fepresents hiniseif as one. as to CONTINUATION of the business affairs after dissolutio a. Continuing partner ~ one who centinues the partnership business after the dissolution of the partnership due to the Teagons stated in Article 1840, b. Discontinuing pariner — one who does net participate in the partnership business atterits dissolution, as to the VALUE of contribution: Majority partner ~ one whose contributfon fepresents the majority or controling interest b. Nominal partner — one whose contrihution Tepreserts only a minority interest, as to the NATURE OF MEMBERSHIP: a. Original partner ~ one whe is 2 member of the partnership from the time of its commencement as a juridical person, b. Incoming partner ~ one who becomes 2 member subsequent to the establishment cf the firm or one who is about to be admitted by the consent of all the membore, as to the state of SURVIVORSHI9: a Surviving partner — one who remains alive while one of the partners dies o1 ons who continues to be in the partnership avter is dissolution by reason of the Geath ota partner. b. Deceased partner — one wvho diod while being a mamber of the partnership. a8 to the effect of EXPULSION: ‘Expelled! partner ~ one who Is expel from the partiershia by the other partner's for a valid cause, b, Expeiling partner ~ partner who caused the oxptision of a partner for a valid cause, Saw Beds College of Lew Capitalist ond Industcial Partnec Distingutshod jcontrinutes money or! ‘contributes his industry |pronery TL Seaieg ebaaee [Cannot gererally|cannot sngage in eny| ‘engage in the same or|business for himself ‘similar enterprise ee that his firm ishates in the profts|recaives a just and laccarding to agreement|equitable share hereon; if none. "pro rata to his contriution pee [Ue sesh ‘fist, tha. stptalion/exempted as.to losses asto losses; las between periners 2 if none,“ thelbut is liable to tic ‘agroement as tolpersons, without profs; |prelucico to] 3, if none, gro rate tolreimbursement from the| contribution {capitalist panners OBLIGATIONS OF PARTNERS AMONG THEMSELVES 1. Obligation with respect to contribution of property a, To cuntritute what had been promised (Art. 1786) y ie Rie tae Re 0aSan Pebs College tf Lao 2. Obligations with: resprot to contribution of money and mony converted to porsonal use a, To contribute an the date due the amount promised to bo gven (vt. 1738) b. To relmburge ory amount he ray have taken from te partnership. coffers and converted to nis own ‘personal use (Ait 1788) 6. To pay the. agreed oF legal interest, 1.6 fails to oay (6 % 6) In due time (Are, 1786) 4, To indemnity the partnership for the damages cated to it by the delay In the contributton (3b & c) Obligation Not to Engage In Otver Business for Hitesolf a. Industral partner » cannot egage tn any business f2° himeelf unless the partnership cvpressly permits him to do 80, The other pertners have the reunedy of elther excl sing the erting partner trom the firm or of avaling themselves of tne Ddenefiis whiz: he may have obtained (Art 1783). b. Caplalist pixner ~The prohibitien ‘extends only 19 anty operation which is of the game Kral of business lin which the partnership fs engaged unluss theid ia 9 silpulation to Hre contrary. (Art. 100) 4, Obligation to Coritribite Additional Capital In case of an Iminent tote of tro business, ‘and there Is ‘no iigreement to the contrary, capitalist partner! are under obligation to contribute an accitional share to save the venture. If he reil.ees to contribute, ne shail be obliged to sell his Interest In the partnership to othir partners (Art. 1794), 8. Obligation of | Managing Partner who Collects Debt. Where & persen it tapacately Indsbied tc the pertnership ard) the managing purtner at ‘the same time; any sim received shall be appli to the two credits in proportion to their amounts, excepl where he received It entirely for the secount of the partrership. in which tease the Whole wnt shall be acplied to the partnership credit nly (Ad. 7792). 4. Obligation of Paitnor Who Recolves Share In Partnership Craait Such partner (s,vliged, If the dabtor should become insolven', {6 bring to the partnership capital what he feielved even though le may have given recnipt for his share only (Art 1792). MEMORY AID IN GAIL LAW], 205, 7, Obligation of Partnor for Damayes. to Panaorstly Every patingr ja responsiti to fhe perinershig for damages suitered by It threugh his faut, He cenmiot compensate them with the profits and benefiis whieh he ray have eaincd for the partnership by his lecustry However, thé eoults may oquitebly lessen this responeisiity If through the partner's extraordinary efforts In oliner activities of the partrershin, unusual profits have been ‘realized (Art 1794), 8, Duty to Rendar (nformation Partners shail render on dehand true and full information of all things affecting the partnership to any pattnor ar the. lexal Tepreseitativa of any deceased partner of ny partne: undor legal disability, (Art. 1808) 9, Obligation to account for any banofit and hold a trusteo unauthorizd personal profits Every partner rust aocount to the partnnship for any bore, and hold as trustee for it any profits doxivad hy him without the consent of the other partners. from any ‘ranszotion connected wilh the = formation, —condhct, liquidation of the partnership of form any use by him of ity property (Ad, 7207) Rules for distribution of profits and losses, 4. Distribution of profits a. According to thelr agreement (but not Tuiqutously to defeat Ar, 1799) b. ifnone, |. Share of capitalist partner sta be In proportion ta his capital contibution ingyaldabaparinargstial recelve such hae Mit enue HEWSotisfied frst 4 ain ladust tel partner ff oT exampted from percons are concemed. 355206 {2009 CENTRALIZED BAR OPERATIONS, Sun Webs College of Larw Note: In general, LIABILITY refers responsibilty towards third persons, and LOSE: b.” With stipulation requiring unanimity of action (Art. 1802) rofers to responsiblity as among partners. Generel rulo: Unanimous consent of ali the managing partners shall be Managoment of Partnarship ¥ necessary for the validity of the acts ‘and cbsence or disabilly of any When tho manner of management has ‘maraging partner cannot be alleged been provided for in ihe partnership Exception: When there Is an agroonzent imminent. danger of grave or irreparable injury to the partnership 1. When @ managing pariner nas besa appointed U. When manner of management has not a. Appointment as manager li the been agreedupon (Art. $893) articles of parinership (Art. 1800) 4. All partners shall e considered i. Power is irrevocable without [ust managers and agertts or layul cause 2. Unanimous consent required for tj to remove him for JUST alteration of immovable property cause, vote of partners having controling interes: i Gontract of Sub-partnership (Art, 1804) necessary + One formed.between < member of a ~2) to remove nim without jusi parinership and a third person for a division of cause oF for UNJUST cause, profts owing to him froin the partnership there must be unanimity enterprise. including his own vete + itis 2 parinorship within @ partnership distinct i, Extent of power and reparata from the main or principal 1) if he acts in good talth, he partnership. may perform all acts of ADMINISTRATION, despite RIGHTS OF A PARTNER (PRASIO) ‘opgosition of his partters 4. Property righ:s of @ partner (An. 1870) (SIM). 2), ifln bad faith, he cannot ‘a. Specific partnership property b. Interest in the partnership b. Appointment as manager alter tho ©. Hanagament participation constitution of tae partnership Right to Reimbursement for amounts i. Power fo aci may be revoked et edvenced 0 the partnership and to any time, wit or without just indsruification for risks in consequence of case management: (Ar. 1796) ji, Extent of power: as long 98 te 3. Rigjnt to Associate with arother person in his: remains. manager, Ne cen share (Art 104) perform ali acts of administration, 4, Right of Access and inspection of partnership but if others oppose and he persists, he can be removed 2. When two or more managing partners have been entrusted withthe management, (Ar. 1801) 2, Without specification of their respective duties and without stipulation that one of them shall net acl without the consent of alt others Genarar rule: Each one may all acts of administration Exceptions: § any such pariner should oppose, |. Decision of the majority of the ‘managing partners shail prevail Ji, In case-of a tle, decision of the partnels having the controling Interest shall prevall siteSun Beda Colles of Hato partnership busine 9. Prescription of tho sale’ sgnt starts to run only, upon the dissoiutinn of the partnership when 118 final accounting is done (Emilio Ennace v. Court. of Appoals. G.R. No, 128334, November:%3, 2091), ” 7s Right to have: partnership Dissvived uncer ‘ertain conditions, Property Rights of 4 Partnor 4. Right te spectiia property (Ad. 18/1) + Contempta’t's ‘ongile property + The specific partne'ship property bafongs to the partnerehip. The partrero have no actyal Intersst in Ituntl efter diseulution, Incidents of this oo-ownorship: (RAEL) 4, equal right with other partners to possess specitc ‘partnership — property for partnership yurposes b. “not assignable, except in connection wth fe assignment or rights of all partners In the same preperty 2. not subject fo ittachment or exe.ution, ‘except on 2sdalm against the partnership 4. rot subject 1) Jegal support Note: Any immovahle property or ain interest therein may be acquired in the gertnership name. The ttle yo acquired may oe conveyed cnly In the partnership name subject fo the pitvisions of article 1810) of the Civil Code. 2. Interest in the partnership (Art. 1812) + Share in the profits (excess of retuns ‘over expenditures in @ transaction or series of transactions) ancl eurpli's {assets cf the partnership after partnership. iabtltles are pald ant the rights of thd partners among themselves are aduisted; + Apartners partnership, aut is not a debt due irom Effects of asskinmont of partner's whole Interest fn the po tnorshlo (Ark. 1313) > Paitrership may elthor remain or be dinsolved Assignees doos” ral npcnssarly hecoma n partnor. He cannt: a. Interfere i the management or fdministratio) b. demand “information. ° accounting and Inepection of ths partnership books _{OEMORY AID IN CIV, LAW| 207 Bui the assignae fs entiled to the following tights: a, to receive in atcordance with his conteact tho profits which the assigning, partner would uthorwise be entitled. eto avall Siosaif ef tha usual remedies provided by jaw in even! of fraud In cranagement : ¢. lo recoive.the assignor's Interest in case of disvotution 4, to sequie en mecount of partnershir affairs but only in ease the partnership's dissoived, aad such account shall cover the nerlot from the date only of the last account agreed to by all the partners Romedizs of separate Judgment croc of @ partner (Art, 1344) Application fer a charging order ater securing Judgment on his credit to subject the Interest of the dobior pastner with payment of Unsatisfied amount of the judgmen: debt Redemption of interest ciiarged (Art. 181-4) a. Genaral partnership 1.” wiin separale property of a priner; or with parinesship property, with the consent of all the partners whose intorssts are not so charged or sold , Limited partnership (inited partner} > with soperate property of any general partner but NOT with partnership property Right to partielyete In the management OBLIGATIONS OF PARTNERS TO THIRD PERSONS pilgations (Arts. aie me dlp uiaion Kis pctners a268 {2009 CENTRALIZED BAR OPERATIONS Reconciliation: Justice Paras opinad that Insofar as capitalist partners are concerned, i Is permissible to stipulate ‘among them that a capitalist partner wil be exempted from latllty in excess of the original capitsl contributed; but will not be exemptad insofer as his copiiai is concerned, Ltability of partnership for acts of partrers (Art. 1818) a. Acts for apparently serrying on in the usual way the business of the porinorship Goneral rules Act binds the partnership. Exception: Partnership is not bound it i. ecting pertner has in fact no authority and ji, the third person knows that the acting pariner has no authority b, Acts of Strict Dominion or Ownership General rule: Act dees not bind the porinership, Exception: Partnership is bound it i, the act is authorized hy all the partners; or i. they have business abandoned the (Ou or more but fess than all partners fave no authonty es (AGO-CHSAY Assign the partnership property in trust for creditors or on the acsignee's promice to pay the debts of the partnership ji, dispose of the Goodwil of the business ii, do any other act which would make it impossible tc carry con the Ordinary business ot a partnership Iv. Confess a judgment v. Enler into a compromise conceming a parunership claim or Rabilty vi Submit a partnership claim or Tiatlty to erbitration vil Renounce a claim parinership of the San Beds College of Lato 6. Acts in contravention of a restriction on authority + Partnership-is not tiable to third persons having actual oF presumptive knowledge of the Teetriotions UL Liability erising from partner's .tort or Breacts of Trust (Arts. 1822-23) 1. Note: Where, by any wrcngfil act or omission of any partner ecting in the ordinary course of ousiness of the partnership or with authority of his co-partne's, loss or Injury is caused to a non-partner. Where one partner, acting within, the scope of his epperent aviherity, receives ‘money or property of a third person and ‘misappliesit Where the partnership, in the course ofits business, receives maney or property and itis misapalied by any partner while itis in the custody of the former. + All parine:s are solldarly lable wth the partnership ior any penalty or damage arising fom a partnershie tort 0: breach of trust (AVt 1824). This s an exception to Art. 1816. + The mule of raspondeai superior (also called fhe cule of vicarious Habty) applies to the law of partnarship kr the same nianner as other niles governing the agency relationship. Lability of Sto¢kholers in a Defectively Formad Corporation Persons who attempt but fall to form a corporation ang carry on business unde: the corporate name Ddezeme in legal effect partners Nete: arner, DEY edna a general NEBR panierSan fileda Coll gt of Law Roqulaltes whin' a Partier Binds The Partnership 4, when he fs e:4 rassly or impliedly authorized 2. when he acta | 1 behalf und in the name of the parine:ship Partnorshilp by Et toppel ‘Arlses viten a person by any means represents himself or consen.s te another representiay “lm to anyone, as parner in an existing purtnershis, for with one oF mo € jiersona nct actual partners; fhe fs flable tp avr euch person to whom such fepresentation het baer made, who has. on the faith of such representation given crealt to the ‘actual or apparent oarinership (Art 1325). Note: Art, 1825 dices not create @ partnership as between the allaget! partnore. The law “only ‘considers them pis thurs arid the association as a partnership Insta” an it ia. favorable to tid persone, However, partnership labilty is cronted ‘only in favor of persons whe on the ‘aith of such representation giv3. credit to the parinership. i Change in tha reiz’-on of the partrers citured by any partier ceasin} to be associeted in carrying on the business (A), 1826). Note: + The dissolution of a partnership must not be Understood in ‘ie absolute and strict sense se that at the terrrination of the ablect for which Iwas creatoa ‘he partnership is extiiguished (Testate of Mo'a v. Soir, GR. No, L-22525 February 14, 1925). + Dissolution devs not autématlcally result in the termination of the legai personality of the partnership, no’ tho relations of thu partners among themsalves. who remzin asco partners until he partvership 's terminated. _ WINDING UP Process of setting the, partnership busi affairs after dissotct on. TERMINATION | Point in tims: wah’ allipartnership feiss are wound up of completed: and is the end of the partnership tte. oF) CAUSES OF DISSOLUTION 1. Entrajudiclal ulgsolution (Art. 1890) ~ tha parties may éijtéé: to expand the grounds provioed unde” Art 1830 but NOT ta delimit thom. t 2, Judicial. dlecolition (art, 1631) - when so decreed by the court, the prasiding judge may MEMORY AION CIVILLAW 209 plice thi partnership under rasubvership ard diect on aczounting to be mada townrds winding up the partnership affair. The court shill docree dissolution, on application by or for a partner, whonover: {BI2LGO) 5 1. A partrer witfully or persistently commits 0 Breach of tie partnership agreement, or othenwisi conducts himself In matters reiting te the partnership business thal it Is no! reesonably practicable to camry on the business in pivtnership with hin; 2, A partner hes been declared jnsune tn any udicial proceeding or Is shown to be of unsound mindy 3. A partner becomes in any other way Incapable of performing his part of the partnership cantinet 4, The businas: of the partnership can only be carried cn at 3 8. Apartner fa: Beén Quilty of auch conduct as tends to affect prejudicially the carrying on of tha businass; 6, Other circumstances render dissolution equitatie EFFECTS OF DISSOLUTION 4. As to partner's authority to act for tie partnorship General ruin: Dissolution terminates all authority of any parties to eet for the partnership Exceptions: 4, Acts necessary to wind up partnership alfairs 2. Acts necasiary to coinplete, transactions begun but unfinished Qualificatioy ce_210 2009 CENTRALIZED BAR OPERATIONS San Beds College of Kaw Exceptions (Art. 1833): 2 Ww a ‘The cause of ciscolution is the ACT of a periner and the acting partner had KNOWLEDGE of such diseolution ‘The cause of dissolution is the DEATH or INSOLVENCY of a partner and tne acting pariner had KNOWLEDGE or NOTICE of such dissolution With respoct to third persons a b, When partnership. is bound to. thie persons after dissolution (Art, 1894) iL Act appropriate tor winding us pacinership affaics ii, Act for completing unfinished transactions ii, Completely NEW transaction which would bind the partnership, if dissolution had not taken place provided: the other party is 'n good faith, meening 4} Previous creditor (had previously extended cred’) AND ha hed NO KNOWLEDGE cr NOTICE of the dissolution, OR 2) NOT a previous éreditor AND ihe fact of dissoktion had net been published Ina newspaper of general circulation When partnership is NOT bound to third persons after dissolution i. Where. patinership was cissoled because it was unlawful to carry 29 the business, except wher the act is for winding vp il Vihere the acting partner inthe transaction has become insolvent iit Where the partner Is unauthorized to wind up, except ifthe :ransaction is ‘with third persons In good faith (seme crcumstances as defined above) iv. Where act is NOT appropriate tor winding up cr for completing Unfinished transactions ¥. Completely NEW iansection which Would bind the partnership if dissolution had not takan place with third persone in bad faith As to partner's existing lability (Ai 185) Gonerel rule: Dissolution does not autoniatically discharge the existing lability of any panner Exception: A partner may be reliaved fom all ‘exiting liabiltles upon dissolution ONLY hy an agreement between: Partnier conenmned 2 Other partners 3. Parinership creditors Note: The consent of the crediters and partners to the novation may be implied from their conduct. Rigins of 4 Partner Upon Dissolution (Art. 1837) 4. Dissolution is not in. contravention of the partnership agreement a. have partnership property applied to discharge partnership liabilities b. receivein cash his share of the surplus 2. Dissolution is in’ contrevention of the parinorship agreement a. Rights of a partner who has not caused ‘the dissolution wrongfully 1. To have partnership property applied to discharge pattaership liabilities I. To recelve in cash his share of the surplus H. To. be Indemnified for damages caused by tne partner guilty of the wrongful dissolution lv. Tocontinue the business in the same name during the agreed term of the parnsrship, by themselves or jointly ‘with others v. To possess: partnership property should they deokle to continue the business: b. Rights of 2 pariner wno has wrongfully caused the dissolution i. Business Is nol continued by the otter partners 4) To have partnership property applied to discharge partnership abiities 2) To receive i cash his share of the surplus less damages caused issolutionSpan Beda Collrye of Laws Rights of a partnwr whore partnorship contrat Is rescinded or tha ground of fraud or misrepresentution (At, 1838) (18) 4. Richt of MIEN on, of RETENTION sf, the surplus of partsrsnip property afer satistying partnership fairies for any sum of money paid or contrisicac by Nim 2, Right of SUBROGATION In place oF the partnership credliors utter payment of partnership lial"ties; and Right of [NDIEMNIFICATION by the guilty partner eggins! all debts nd jiaallies cf tha partnorshiip Mennor of Winding up, 4. Exrojudicial ~ by the partners theinselves ‘without the Intervention of the cotirt 2, Judicial = undae the control and direction of the court upon proper cause shown by any pariner, hia I2go! representative or his, assignee Persons Authorizi't to Wind Up (Art. 1836) 4, partners desigt ted by the agreement 2, In the absenta of such agreement, all partners who have not wrongfully dissolved ‘the partnership. 3. legal represe rot ingolvent iva of lat surviving partner ‘Aswots of tho Parteorship (Art, 1839 (1) 4. partnership progerty 2. contriouions of the partners necessary for the payment of el fablities. Order of Pay-nent in Winding Up (Art. 1839 (2)] 4. those owing to reditors other than partners: 2. thosa owing to, vartners other than for vazital or profits 3. those owing to Fartners In respect of carital 4, those owing lo Ferthers In respect of profits Doctrine of Marsheling of Assets (Art. 1839(6)} 4. Parianrship crvdtors have prefarence in partne:ship assvts 2. Separate . of individual creditors have preference in separate of Individual properties 3. Anything loft fran either goes to the other Partner's Lion Right of every periner to have the partnership properly applied to dlecharge partnership fiablites AND to hve the surples acerts, # any, distributed In cash to the respective partners, after deducting what may be duo to the partnership from them as partis¢s. Note! Art. 1842 speaici of acccunting to be done upon digsolutlon of the partnership, white Art 1809 relers to @ damand tor accounting before MEMORY AID IN CW Laer 20 dlesolution by reason uf the circumstances mentioned In tha arlicia, LE eta Ono formivs by Hwa oF more persons faving as members one ar more yenera, partners ant one or more nited cartners, the latter not being personally liable for garinerstip debts (Art, 1543) CHARACTERISTICS «OF A itr. PARTNERSHIP 1. Formed by subatantist compliance ir goes faith with the statutory requirements 2, One or mom general partners convo! the husiness a:¢ are pareonally liable vo orectors 3. One ¢ mere timitad partners contribute to the capital and shart In the profits but do rot participate in the management of tho business ond. ara not personally Hable for partnersinip chligetions beyond the amount of their capital contribullons 4, The lrnited gertners may esk for the return of thelr capital contributions under the conditions presccbed by law 5 The partnership debls are oald cut of the common fund and the individual propertise of the genzral partners. ESSENTIAL REQUIREMENTS FOR THE FORMATION OF A LIMITED PARTNERSHIP 4. A carvfivsta of articles of limited parinership Which states the matters enun‘orated in ticle. 1844, which must be signed and sworn are Such certificate must be fled far record in tha Office of. the.. Securities and “Exchanga Commisslen. su a kee ke suet Brnpiunce VANE GR Bstnese (8, pina falip.and those who facie, a gong ft of the protection of sook to avaMhemsel212 | 2009 CENTRALIZED BAR OPERATION! Hay Beda College of Lay faws permitting. General partners ‘have! Partnerships must show due complia 0 creation of iner has no) in thelan equal night in. the ‘such laws, management of almanagement of the, * Contributions of a limited partner CASH or limited partnership andjtusiness (when — the| OTHER PROPERTY, but NOT SERVICES renders himself liable tojmanner of management! (Art. 1845), |partnership creditors as\has not been agreed! + A partner may be a generni partner and a fa. general gattner # helsipon) lined partner in the same parnersip atthe iene ee Feet same time, provided that this fact shall be lof the busivess: stated in the certiicate proviaed for in Article FEE CE ReE REE Prae eat (an 08 (Ane ee aE + SURNAME of a limited partner shall not Limited partiers liabity|Seneral partner 5) ‘ppeat in the partnership name unless. extends erly to his!personally liable forl sy bagnedte name of general parner, or eaial sonesuion [partnership oblgetions 2 Fert the ime when the Sted partner ET ETN a a apo hecame such, the business hud been carried on under a naine in which his M name must be|!lo such requirement Suiname appeared (Art 120) folowed by the word * Violation of such wil make the mites partner eee fable to gPatinership crectors wihout ES PROBURBINY RR hoover, the rights of a genersi pariner era Limited pariner is not alGeneral partner Is the} CAMAGENENT OF ALIMITED PARTNERSHIP poor can Moonee pare Is the Saree re: Uinied patter ons no Beletang a, SPOR Paty ty management powers against a” partnership |e inst a partnership Ones! Exception: & generat patter in a imtea (UME patirership however has’ no euterty, wine (Meal a8 Sito ‘conse oF rafeaton ai intog (FRET pariners, fo (Art. 1850) (CIG-PAAC) Proceeding is to enforce) 1. Do any actin contravention of he cortinnste: ‘a limited periner’s right| 2 Doany actwich would mate tinrosobpto (egimtad fairer ht cary von the adnary hisess 3 'he (eget | partreratps Pe ae aaRecalr crapemecssar 3. Gonfosskdgment against tne partnorsip jo Pehle Seay Re 4 Possess partnership property, or essign thelr INo such. prohibition in} General partner is. fone, spociic parnerstin propery, for te aa tne ea eee tthe tat aparnership purpos [petiner “who [ha bucnese wee 3. mits person oss gona in (eondlcered "a mrarelte Kind 8. dm a'poreon aa ¢ Wnkes rarer, unless ie right todo a6 is gen nine conecate 7. Continue the business with the partnership roperty on the. desth, retirement, insanity, Chil interdiction or insolvency of a general pariner, unless the right to do go is given in the ceriifeate. Limited and Generst Parmor/Partnorchip Distinguished (R2EF-P202-TIME) nt ee we” 2aHan Beda Collrye of Law | ecutemenis a0) _ |the rights of the Ierited/assignes & nev porter lpartner .. subject to|without the consent of| certain qualifcetione ha other pariners, fathough he may! associate a thied person, [limited parinerst‘s” [@éneral partnorship, a} jerented "by. .; hija general rule, may he members + aftarleonstituted in aby form] [substantial « compliunce by contract ar conduct of in good faith wit! tha|the partriessiin by tow. Limited genera pr lntreat|_-t° in lassignabie, may not be Jassignes acauinng «al Jas a general rua, ni ma! lor a timted pariner Imust not appeer ir. the rm name oR (composed of ona crlCompoeed only ef Imore general. par'nera|general partners land one o more lirvted! perners SEA | dea no ses, Retirement, daath,iRetirement, death, lisantty or ingolven > offinsarity or insolvency of la fimted partner sesla general ariner Inot_ dissolve the|dissoives the partnership lparinership for his lexecutor of lacministrator shatl'1.ve) . the righte of @ tnited! partner for the purrs lof selliny his estate | Name of a general partner may oppecr in) fhe firm name RIGHTS OF A LIMITED PARTNER (B'F2AR2) 4. To have the piztnership books Kept ut the principal place 4f husiness of the partnership (Art, 1851) 2, To Inspect, al a seasuinabie hour, partnership bocks and copy nny of them (A-t. 1851) 3, To demand trust and full information vt the things affecting the partnership (Art. 7857) 4, To demand “4 fortnal account of the partrership affcirs: whenever circumstances render Itjust and redsonable (4rt, :867) 6, To ask for distolition: and winding up by secre of court (it, 1831) 6. To recelve a thre In the profits of other compensalion’ tw way of Income rrovided: that the partnership asseté are In excess of MEMORY AIGLIN CIVILLAWL 213. parinaship tablities ater such payment (4rd 1856) 7. -To geceive. tha rotumn sot is, contribution provided (Ar, 1067). ‘8, All tne tabiitlas of the partnership have bee pald OF the partoership asssto ere suficlentto pay. partnershin labitties b. ‘The consent of all the members (general and Sinitet partners) has been ootalned Exception: Whon tho return of the contribution may be rightfully dermancack |. -Onithe dlosoiutlon of the oartnerehip 1. Upon th arrival of the date specified in the certificate for she retuin Wi, AMlerite has given 6 montns notice In writing fo oll other partners, ifno tine fs soetfed in the certificate their for the return of the contribution or for the distolutian of the partnership © The certiioste Is cancelled oF 99 amenad as to set forth the wilhdrawai or reduction . ALLOWABLE TRANSACTIONS OF A LittiTED PARTNER (Ar, 7834) transacting othef business © with the partnership 2. receiving & pro tate share of the partnership assets with the gerieral creditors If he is NOT also a general partner Note: In transacting @ businass wth te partnership as @ nun-member, tho limited partner is considered 0 non-pariter creditor PROHIBITED TRANSACTIONS OF A LIMITED PARTNER (Art, 1854) 4. receiving of holding as cottateral security any partnership property, or 2. recelviny tit gonveyance, oF teleas) rehace te 33214 |2009 CENTRALIZED BAR OPERATIONS. slated in the cettifcate es having bees made: AND b. For any unpaid contribution which he hes: agreed in the cortificate to make in the future a! the time: and the conditions slated in the certificate ity as trustee a. Speciic property stated in the certificate 28 contvibuted by him, but which was not contributed or waich haz been wrongftly returned; AND b. Money cr other property wrongfully palo of conveyed to him on account of his ‘eontribution Note; These liabilities can be waived cr compromised only by consent of ALL the members; but @ walver or compromise shall NOT affect the right of a creditor of partnership who extended credit or whose claim arose after the filing end before the cancellation or amendin:ent of the certificate, to enforce such liabiltles. SUBSTITUTED LIMITED PARTNER (Ad. 1858) ‘A person admited to all the rights of a limited partner who has died of has assigned his interest fn the partnership, General rule: He has all, the rights and powers, and is subject to all the restrictions and liabilities of his assignar. Exception: Those flobililes which ha was ignorant at the time he became a limited partner AND which could not be ascertained fcom. the certificate: Roquisites In Order That the Assignoe tay Bocorte a Substituted Limited Partner 1. Al the mombers must consent to the astignoe becoming a substituted limited partner, OR the limited partner, being empowered by the cerificate must gWve the assignee the right to uecome a limited partner 2, The cerifieale must be amended In secordance with Art. 1885 3, The certficatle 2s amended must te registered in the Secures and Exchange Commission SOLUTIOW OF A LIMITED PARTNERSHU? 4. ralinement. death, insolvency, insanity, or evi interdiciion of a GENERAL PART + unless the business is continued by remaining general partners (under a right 0 to do stated in the cenificate or with the consent of all members) (Art. 1850) 2. when al (ited partners ceased to be such (Art, 1864, par. 1) = onan at cen man 8. expiration ofthe term cr period of existence of the partnership (Art, 1844, par. 1) 4, by agreement of all parinats beiore the lapse ofthe period of existence; 5, misconduct cf 8 general partner or fraud committed by @ genefei puriner against the limited patner!s 6. when the limited partner deraanded the return of his contribution’ but same was unjustitably denied «not exrlusive Nete: + The executor or administrator of the estate of the ceceased LIMITED PARTNER shall acquire all the’ rights of a limited partner for the purpose of setting the estate (4rt. 1861), + The estate ofthe deceased timited partner: ‘shall be fiablo for all his obligations or liavilties to the partnership as a limited partner. LIQUIDATION OF A LIMITED PARTNERSHIP (art. 1964) i Order of priority In the payment of the abilities of ‘he lmited partnership: 1 those owing to creditors in order of priory as provided by lew, except those to limiied partners on account of thelt contributions and fo general partners. 2, those awing to limited partners in respect 10 thelr shar, of the profits and other compensation by way of income on thelr contributions. 3, those owing to limited partners in respect to the capital of their contributions. i 4, thosa owing to general partners other than for capital nd prof. 5, those owing to general partners in respect to Ry a the iBers if some tution, the Goan Tieds College of Lavogoa Boda Colle of Huy ‘© Cancettation or amendment must be recordect Inthe SEC. A UIMITED PARTNER. IS A MERE CONTRIBUTOR, henc», he CANNOT be 2 aruper patty in a case for er against the partnership (Art 1866) 4. unless the act'cr Is to enforce his indivithial tights against t19 partnership as authorized in Art 1854 2. he can be 9 cefendant on an acion filed against him by ‘he partnership to enforce his Nlablity to the later (Art, 1858) sigeneg A contract of agency Is 2 contract whereby a person agent) bin is himself to render sume ‘service or (0 do something In representation or on behalf of another (crincipal), with the consent, or ‘authority ofthe latter (Art. 1868). CHARACTERISTICS OF AN CONTRACT (PF-BERN, 4. Broparatory 2. Ziductory 3. Bilateral 4. Onerous (genert y) 5, Representativo 1X lation 6. Nominate PARTIES TO YHE WOHTRACT OF AGENCY 1, Prinelpal - enw whom the agent repraser.te ‘end from whom Is9 derives authorly; 2. Agent - one w19 acts for and iepresents another, AGENCY PURPOSE OF AN ‘GENCY To extend the pore naity of the-principal through the faciity of the agunl. It enables thy cetivlly of ‘man which is naturtlly finited In ks exercise by the impositions at his physlological conditions te be legally sextended. by permitting. nim to be ‘conatructively presant in.many different placos and to perform dive! 36 juicteal acts anu carry or. many different sot' ities through ancther wh physleal presence It Inipossible or inadvisable at ‘hie some tine (1+ Manrasa 434). ELEMENTS OF AN:AGENCY 4 Congunt + Bxprose Sr taped +, /Any person) et ently having Jurisicas canacty “and ‘capacity to act and not otherwise disqualified, may enter Into an egoney +e Dut a8 regeeds the party with when the agent acts n- contracts, tHe legal capacity 4 8 ase MEMORY. ofthe prinstpal rather the. the greater import. : 2, Objoct: execution of 8 juridical ab tea third paraan, 7 May over all acts pertaining“, business of the principal (general agency, of one of more. speciic transactions {special agency) + The extont of the agent's authority to act, whether it be a general o- a. special agency, dapands on how the apency is couched, 3. Ganise: may be onerovs of gratuitous Lut presumed for compensation (Art. 1875) Note: + The agent may not be deprived of hil right to compensation by an unjus'ified revocation of the agency. +The agont rust act as a representative and rot for iinwslf, and he must act withie the scope of his authority, ACTS WHICH MAY BE OELEGATED TO AN AGENT Genoral rile: What @ man may do ln person, he may do thi another. Exceptions: 1, Personal acts 2. Criminal Acta / Acts not allowed by /aw Knowledges of Agent fs imputed to Princtpal Genoral The knowledge of the agent Is imputed to the orincipal even though the agent never communicated such knowledge to tho principal Excupticns: create ccomnprie216 |2009 CENTRALIZED BAR OPERATIONS . cotiched in specitc terms. 4. as to its Nature and effacts 2 estensible / reprasentative - agent acts in the name and in tepresentation of the principal b. simple commission « agent acts in his own name but for the account of the principal 5, a9 to Extent of businoss covered generals one which comprises el! the business ofthe principal b. special one which comerises one or more epeciic tensactions FORM OF AGENCY 4. Express 2. Implied a, from the acts of the principal '. from his silence or lack of action ©, failure to repudiate the agency knowing that another person is acting on hir bahalt without authority (Art, 1869), Nole: in an implied agency, the principal is st boune by the acts of the agent just as in case of express agency General rule: There are no formal requirements ‘governing the appointment of an ayent Exception: When the law requires a specifc form (e.g, sale of a piece of land thru an ager authority of the agent shall be in wri otherwise, the sale Is void) (Art, 1874). and Sale Distingu'shod ne recelves| [Agent receives Igoods as the goods of goods es owner the|The buyer the principal |Agent delivers. tha|Buyer pays the rice roceeds of the sale lAgent can relum the|The buyer, as @ mile, lobject in case fhe is\cannat retum the abject [unable ose Principle representation [spoiled San Heda College of Bato LST [Agent _, exeiclses|Employee exercises uiscretionary power |ministe:lal functions only Preparatory contact [Principal contract FORKI OF ACCEPTANCE BY AGENT 4, Express 2. Implied a. frora his acts which carry outthe agency ». irom his sllence er inaetlon ancording to the circumstances. KINDS OF IMPLIED ACCEPTANCE 4, Whore porsens are prosont (Art, 1871) a, principal delivers his power of attomay to the agent and b, agent récelves it without eny objection, Whore porsous aro absent (Art. 1872) General rule: Acceptance cannot be implied from sileace of the agent “Exceptions: a, principal transmits his pesver of attorney fo the agent, who receives it without any objection; . principal entrusts fo him by letter or {olegrara a power of ettomey with respect to the business in which he is habitually engaged as an agent, and he dd not reply fo the letter or telegram RULE ON AGENCY BY ESTOPPEL ‘One who cicthes another with apparent authority 28 his agent, and holds him out to the public a3 stich, cannct be permitted to deny the authority of such percon in good faith, snd ia the honest belief that he fe what 19:appears to be (Culson v. CA, GR No.89531. Cotaber 26, 199%).San Bei College F.ao_ 3. Special or Particuar Agent - one authorized to act in one or cry specific transnetions, a¢ to do one or more specific acts, or to act upon a particular occes.cn. General and Spectt Agent Distingtishing I Rosety authorized {Authorized to do. only ldo all ects connertet acts In pursuance of with the business. ci|partiular Instructions or lemployment in whict vith rostrictions} lnseessarily Implied trorn TAP eal Se Binds his principal ty {Cennot bind his principal) Jan et within the acopt |i @ manner beyond or fathough it” may - be| which he Ia sulhorized tol lcontrary {0 his specks Iperform on behatt of the [principal transactions involving 3 |trensactien o: serles of qeemagcions not invalving} lcontinuity, advisory only, [Apparent authorly/Mere. revocation is {does not terminate by letfective to terminate the Ithe mere revocation of/authorlly 46 to third Inia authority witnour|persons because fie [notice to the third party jthird person has @ duty to * SPECIAL POWER OF ATTORNEY (SPA) ‘An Instrumont i wring? by which ore perron, ns principal, agpointe another as his agent and Confere Upon him the eutorty to perform certain specified cts or kinds of acts on.behalf of the piinclpa { Note: It need not be ncterized; except what It is executed in a foreign country, must pe certlied in accordance with the Rules of Court. Instances Whore SPA it Necessary (Art. 1678) {PECWEM-LLB-BOCARO) 1. To make Paymurts as are rot usually considered a8 act: of a¢ministration: ais > MEMOIR AID IN CIVIL Lay) 217 2. To. Tec! novition. whith put an end to aixgatons already jn existence at tine the agency was con ituted; 3, To. Comprevni, —eubmnit questions: Io atbivation enozrice the fight te appeal fram a judgment, wale objections to the venue of fn ectign or rbanden a prescription already acquired, To Wows any obtgation gratuitously; 6. To Enler into any contract by which the oumership of an inimovabla ié wansrattea oF acquired eithor gratuitously or not €. To Moke gifs, except custcmary onus. for charity or tose rnade to employees In the business ninaged by the agents; 7. To Loan or borrow monéy, unless the latta's act be urgont. and” Indispensuble for the preservation of the things which are undor ad nivetation; 8, To Lease any real property to anotner person for more than 0x6 year; 3. ‘To Bind the prhcipal to render some service without comersatlon; 19. To Bind tho principal in a contract of partnershi; 11, To Qbilgate the principal as .guerantor or rely: 42, To Grente or convoy “real: rights ovat immovable propery: 13. To Accept or repudiate an Inheritance; 14, To Ratify or resoyinize obligations contracted before the agency,” 48. Any Other act of s'slot dominion, Note: © A.thlrd porsua with whom the agent wishes to Sontract on behalf of the principal may reciro the preweniatien cf the power of attomny or tructioné as regards the agency: except or ya Deg Pe ects wT218 |2009 CENTRALIZED BAR OPERATIONS + SPA to mortgage includes the pawer to allow the extrajudicial foreciosure of the mortgaged property (Art. 1879) ‘+ SPA to compromise does not authorize ‘submission to arbitration (Art. 1880). Effoct of Lack of SPA Where One Is Roquirod: Unenforceable WHEN PRINCIPAL IS BOUND BY AC) OF AGENT 1. Agent must act within the seeps of his authority (Art. 1681) and 2. Agent must actin behaif ofthe princivel Note: The kirsis of the agent's authority shail not be considered exceeded, should it have been Performed in a manner more advantageous to the principal than that specified by him (Art. 1842). WHEN A PERSON iS NOT BOUND BY ACT OF ANOTHER +. Latter acts without or beyond ihe scope of his authority inthe former's name, and 2, Latter acts within the scope of his authority but in is own name (UNDISCI.OSED PRINCIPAL), except when the transaction invoNes a thing belonging to the principal (Art, 1889). EFFECTS OF AGENT'S ACTS 1. With Authority a. in principal’s name ~ velid; principal is bound; agent not personally lable ‘UNLESS he bound himself (Art, 1297) b. in his own name ~ Apoly Art, 1263; generally not binding on the principal; ageni and stranger are the only parties, EXCEPT regarding things beionging to the principal or when the principal ratifies the contract or derives beneft therefrom, 2, Without Authority a. in principal's aame ~ unauthorized & unenforceable but nmiay be ratified, in which case, may be. validatsd retroactively from the’ beginning (art 1407) b. Innis own name ~ valid, wheter or not the subject matier belonas to the principal, provided, that at the time of delivery, the ‘agent” can transfer legally the ownership of the thing. Otherwise, hv wih be held lable for breach of warranty against eviction; Art, i883. does NOT apply San Beda College of Lats Occasions When P-incipal is Bound By Tho Acis Of The Agent Peyond The Latter's Powers, 2. Where the principal's acts have contributed to, deceive the third person: Where the limtayons upon the power created by him could not have been known by the third person; ‘Where the principa! hes plaved In the inands of the agent instruments signed by him In blank Where the principal has ratified the acts of the agent, DOCTRINE OF AGENCY BY NECESSITY By, vitue of the existence of an emergency, the aulnority of an agent is correspondingly enlarged in oider ‘to cope with. the exigencies or the nacessites of the moment Requisites: Not ‘Real existence of an emerguncy Inability of tho agent to communicate with the principal Exercise of the additional authority for the princiya’s own protection ‘Adoption of faitly reasonable" means, premise duly considered Agency can never be created by necessity; ‘what is created is additional avthonty in an agent Szpciles ond auhonized beer the emergency arose, GENERAL OBLIGATIONS OF AN AGENT TO PRINCIPAL 1 To act with vimost good faith and loyalty for 23 tdoency —aaneos care, father of aSan Beda Colts of Zab hhe doclines arr agency, until an “agent is appointed (Art, 1385) 5. To Advance tht 1iecessivy funds should there bs. etipulation do s0 (Art. 1886, 6, To Actin accordance with the inetructons of > the principal, 2-1) in, default therect, to do ell that a good fathiir of a family would do (Art 1887) Not fo carry out the agency if ity execution yo Would manifestly resutt in.losy or Damage to the prinelpal (Art, 1288) 8, To Answer for damages if there being.a conflict betweer: nis interast and thcoe of the principal, he shcv ld prefar his own (Art. 1889) 9. Not to Loan‘ himself i he has been authorized to tend tnoney at interest (Ar. 1690) 40. To render an Account of his transactions anc to deliver to thd puincipel whatever he may have receiver! by virtuy of the agency (Art 41807) Note: A etipulaticn axemipting the agent from ‘tha obligation to render en account shail be VOID (Art. 1891}. 11, To be Responei acs cf the subs 4992) 12, To Pay interest 19 finds ne has apotied to his ‘own usa (Art, 1536) - from the day on which he did 80 and on those which he sill owes after the extinigu shmont of the agency. 43. To Distinguish. yeods by coun'ermerks atid | designate the merchandise respectively belorging to eah principal, in the case of a ‘ceimissicn agent who handles coos of tie ‘same kind and mark, which belong fo cifferent owners (Art. £90«) 44. To Inform ihe pitnelpal, where an authorized sole of credit has beech made, of such sale (art. 1906) 45, To Bear the tisk of collecton, siuuid he receive also on silo, a guarantes commission (art. 1907) 9 indemnity the principal for demagas for his {allure to collect the credits of his principal et the time that they become die (Art 190) 17, To be Responsinle for fraud or vegikgence (Art: 1909) ‘SUB-AGENT ‘A person to whom (ne ‘agent delegates, as nis agent, the performarize of art act for the principal ‘which the agent has dean empowcred to parfortn through his representative. in certain cuses fer the ‘sppointed by bin (Art 16, ‘Note! The agént indy apolnt @ substitute except ‘when he hes bean p=iblted by the principe (Ar. 1692) MEMO MY nib it Vie LAW) 21 Instances when ayont shall be responsibly 10F tho acts of the substitute: 1. Ho Is rot given the powar to appoint, 2, He was given such poser but without designating the_perton, und the’ person appointed waa Adtorioutly Incompetent or Insolvent + in there twy cages the principal may further ‘bring an ation. against the susstiute with respect to tha obligations Which the latter has contracted under the substation (Art. 1893), Note, All acts of the substitute appointed against the pioiaiivion of ie dtineipal shall bu VOID. JOINT AGENTS ‘Agents appointed by one or more principals under ‘such circumstances as to induce the inference that it was the prinsipa's Intent that all should act in conjunction in eonsummating the transaction fer whicn they we'e appointed. + Their responsivity is JOINT; except if solidarity has been exprassiy stipilated (Ad. 4994), © If solidarity ‘hag been agreed upon, each agant is responsi (or thi: 4. non-fuifilmat ef the agency, and 2, fault or negtgarice of his fellow agents; except whan the fellow agents aciet beyond the scope of their authority (Art 1895) Note: An Innocent agent has a right latar on to recover from the gui or negligent agent (Art 1?172)) INSTANCES WHEN AGENT MAY INCUR. PERSONAL LIABILITY aa 189: 1. Ant an nso, . = a i ert car be a i Tn fay wl “os neta ad bh 7912220 |2009 CENTRALIZED BAR OPERATIONS ‘was aware of the incapacity at the time of the making ol the contract SCOPE OF AGENT'S AUTHORITY &S TO THIRD PERSONS (Art. 1900) Includes not only the actual authorization conferred upon the agent by fis principal, but also that which has apparently or impliealy delegaled to him, 1, Where authority not in writing every person dealing with an assumed agent 's put upon Inquiry and must discover upon His peri, fhe would hold tne principal liable ‘ot only te fact of che agency but the naturs and extent ofthe authority of the agent, 2. Where’authority in writing. ‘such person is not required to inquire further than the terms of the vaitten power of attomey. FACTOR! COMMISSION ACENT: one engage in the purchase and sale for a principal of personal property, which for this purpose, has to be placed in his possession and at his diss +f the commission agent received goods consigned to him, he is responsible for any dainage or deterioration sulfered by the same in tho terme and conuitions and as describes ir the consignment (Art. 1893), + The commission agent who handles goods of the same kind and mark, which belong ‘0 different owners, shall distinguish them by countermarks, "and ¢esionats the meschandise respecively belonging te each principal (Art, 1904) + A commission agent can Sell on credit only with the express or implied consent of th principal, “If such sale is made without authori, the principal Is gen two aternatives (Art. 1908): 4. He may require payment in cash, in which case any Interest oF benef from the sate oo credit shall belong fo the agent since the principal cannot be allowed '0 ervch himself atthe agent’s expense; b. He may ratify the sale on ersdt in which case it will have all the risks and advantages to him, + tthe commission agent is authorized to sel! fn credit, he shall inform the principal with a statement of the names of the ouyers. With such statement, the eale shall be deemed fo be for cash a8 far as the principal is coneemned (Art. 1906). + Sheuld the commission agent reséve on a tala, in adaition to the ordinary commission, another called @ gurantee commissio shall bear the risk of collection and shall tne principal the proceeds of the saie on the . San Beda College of Lay game tarms agreed upon with the purchaser (Ait. 1907), +. The commission agent who coos not collect the credits of ‘tis principal at the time when they bocome Sue and demandabie shall be liable for dcmages, unless he proves the exercise of due dligence for that purpose (Art. 1998), BROKER: A middleman or imermediary who, in bahait of others: and fer’ commission or feo, negotiates contracts/transactions relating to real of personal property. FACTORAGE: Comipensation of a factor or commission agert, ORDINARY COMMISSION: Comperisation for the sale of goods which sre placed in his possession or at his disposel. GUARANTY COMMISSION (DEL CREDERE) Art 1907) Fee, in addition to tie ordinary commission ‘agreed upon, that is given in return for the risk, which the agent has to bear inthe collection of olsdits | ~ “An agent with a del credere commission is liable to the principal ifthe buyer falls to pay or is incapabe of paying, + Either the principal or the del credere agent may sue the buyer. The sult of one will bar the subsequent sult of the other, DOCTRINE OF PROCURING CAUSE * In order for.an agent to be entitled to a commission, he must be the procuring cause of the sale, which simply means that the measures employed by him and the efforts he (Ramos v. CA, 720San Peds Lollege ato SPECIFIC OPLIGA’ AGENT (GARIP) 4, To Gomply with ail tha ‘obligations wwhietr the agent may have ccntiatted within the eoope of his authorly and Ip tie naine of the principal (Art. 194¢) To Advance to the gual, should ths later 20 request, the sii necessary for tha ‘exeaition of te act ney (Art, 4912) To Reimburee tie agent fer what thn latter has advances (pis interest), evan it the business wae nol successful, provided the agent was frge frors fault (Art, 1912) To Indeinnify the yent for ali the damages, which the axecutior of the agency may Have caused the latter without fault or nepligence ‘on his part (Art, 1917; Note: Tho agent 0 rataln in pladge the things which are the abject of the agency’ Unt the prinelpal offec : this reimbursement vod pays the Indemnity (Art 1974), ‘To Bay the agent ho compensiition agreed pon, or if no colepensation war speciied, the reasonable valuis of the agent's services NS OF PRINCIPAL 10. 4 Note: Even when the agent has oxceecied his ‘authority, the principal 13 eolldarly Hable with ‘he agent If the former afewed the latter to act as though he had full pown,s. (Art. 1971), APPARENT AUTHORITY That which thougn rot actually granted, the Frinclpat knowingly perniite the agent tc exercise Or holds him out as pc jsessing. ft is founded in the conscious permission of ects beyond the powers granted, ESTOPPEL BY PRINCI?AL Where the principal, by his culpable negligence, = permits his agent to enerolse power not granted to ‘him, even though the p:inelpal has 110 notice or knowiedg» ofthe conduit ofthe agant, “Note: tn” implied agbrey,'thare isan. actuat ‘agency, The principal elone is flable. In agenry hy astoppel, the authority 4f the agent Is not real but only apparent,.if the itoppel Is caused by the ‘prinelpal, he is fable ts any third person who yelled of the misrepreséntation. If the estoppel is. caused by the agent, then the agent alone Is able CONDITIONS FOR | RAT IFICATION (CK-ECB) 1, Prt! me hat ‘Capacity and power 10 ral Principal must ih jhed Knowledge of material facts Principal raust ratify ‘he acis In tis Entivity ‘Act must be Garab’e of ratification Act must be done ir: Aehaif of the prinelpal MEMORY AID IN CVI LAW} 221 VIABILITY OF PRINCIPAL FOR TORT OF AGENT RULE: ‘The principal Ie civly anble to third parsons ior lors oF an agent committed ut the prineipars duction oF in tho sourse ond within the scope of the agent's nutherly JOINT PRINCIPALS ‘Two et more persons who npoaint an agent for a cominon trenisaction or undertaking. Liabiticy: goldanly table t9 the agent for all the consequences of the agency (Art. 1915), Roquisites of Sollda:y Liability: 4, ‘Thore ara two oF mare principals 2° Tho printipala havo all concurred in tho ‘appointina it of te same agent; and ‘Tne agent Is appointed for a common transaction or undertaking 3 Note: Any one of them ray revoke the agency RULES ON DOUBLE SALE BY PRINCIPAL AND GENT 4. When two porsons contract with regard to the same thing, one of thain with the agent and the other with the principal, and. the ‘two contracts are incompatibie with each other, that of prlor dele stall be preferred, without prejudice to At, 1544 (double sale) (Art 1316). If the agent has acted in good feith, the grincioal shail be liable In damages to the lite person whose contract must be rejected. Hf the agent i In bad faith, he atone shall be responsible (Art 1917), INSTANCES WHEN PRINCIPAL ig NOT re Cel UL i 2a22212009 CENTRALIZED BAR OPERATIONS 3. Withdrowel of the agent ‘Agent may withdraw by giving notice to the principal, but must indemnity the principal for Gamages that he may suffer by reason of such witndrawal 4, Ascomplishment of the object or the purpose ‘ofthe agency 5. Revocation 8, Dissolution of the firm or corporation, which enirusted or accepted the agency. REVOCATION OF AGENCY BY PRINCIPAL Goneral rule: Agency is revocable at will of the principal, regardless of the term of the agreement Exceptions (Ait. 1927): 4. Ifa bilateral contract depends upon t, 2. if itis the means of fulfiling an obligation already contracted, 2. Ifa partner Ie appointed manager of 2 partnership and his. termination is ‘urjuatifable; and 4, IFitls created not only for the interest of the principal but also for the interest of third persons, who have accepted the stipulation in their favor + Agency for purpose of contracting with specitied third persons: must be umely Nofifled of the revocation (Art 1921) + Agents with general powers: revocation of the agericy does not prejudice third persons whe acted in good faith and without knowtedge oi the revocation. Notice in a newspaper of general circulation is a sufficient werning 19 third persons (Art. 1922). Impled revocation may bo effected: 4. By the act of the principal In appointing another agent for the same business or transaction (Art 1923); 2. By the act ofthe principal in drectly managing ne business entrusied 0 the agent (Art 1924); oF 3. By the act the principal in subsequertly granting @ special cower of atfomey as regards the same business to another agen, whare he had previously granted @ steneral Power of atomey to one agent (Art. 1976). AGENT MAY WITHDRAW FROM THE AGENCY 4, must glve notice fo the principal 2. inust indemnity. should the principal su damages by reason of the withdrawal riesa the agent should base his wthéraal from the impossibility of continulng the perfstmance of the agency without grave detriment te himself (ant 1928) 2 San Beds College of Lao Note: The agent, even if he should withéraw from the agency for a valid reason, must continue te ot until principal has had reasonable opportunity fo take the necessary steps to meet the situation (Art 1929). INSTANCES WHEN DEATH OF THE PRINGIPAL DOES NOT TERMINATE AGENCY 4. If the agency has been constituted In the ‘common interest of the principal and the agent 2. IFit has been constituted in the interest of 2 third person whe has aocepted the stipulation | lnhle favor (Art. $830). AGENGY COUPLED WITH AN INTEREST ‘An agency wherein the agent hes acquired some - Interest of his own inthe execution of the auihority granted to him, In addition to his mere Interest In the: contact of employment with the reayiting gains, Trast A legal relationshig between one person having an equitable ownership in property and another owning the legal file’ to such property, the equitable ownership uf tha former entitling him to the performance ot certain dutles and the ‘exercise of certalty powers by the latter for the benefit of the former, + implies confidence In a relationship. + Founded in equity such that it cannot result {rém a contrac: formed for an liegat purpose. Neither may ‘a trust be created for the purpose of evading a legal prohibiton, Example.) {rust created for jead patents, ad ‘ we) O temahdoiifot Dl yshe i ¢ eelsou gaeoe wouieye vt a, sae ang onatl 2» Regis "| fan aa an Fak Iw a transtor fekitonshia and involva propery ak wel as ti) tha. separation of So ietenion ty Jand equitable title egal ano equitabin) Jowrorship excep! ta) eee rage nf gins 1 wus) [The benofciary of @ twalthe —dorinw avis! may gomarsileamaly with the legl performance ©. of th ifrequiroments Jebigaion without haviins|azeapting donation ltormat'y accepted tha benef of the: trust i lpubtio document, upon Imato acquiescence In t formation of the trust a: ij acceptance under ti | second. paragraph ai J aiiclo 1311 (alpulationy Ipour autrup. es “Trust and Doh: Distingulshod [The beneficiary of a:tmiatlA treditor has mevely Inv a bereft interestinja ? persona: clam the trust property. lagairst the debtor. [There is a fiduciary) There Is no beneficiary relavenship between ¢ [relationship hetwoun a liusiee and ateneficlary |eebtor and creditor PERSONS INVOLVED IX A TRUST 1s Trustor «tho one wis flerdonaty erosion ust 2. Trustee - the peracn who holds the teyal tite to the trust property; for the benefit of anc ther, fand with certain powsrs aid subject to certain dues 3. Benoficluy or the’ sestul qua trust - tho parson whu has the equitable interest In the property und erfrys the benefit of ‘administration by the trustee. He may be @ rotural person oF a ietel enilly. Tho trator moy establish @ trust with himself os the beneficiary (usual case), ‘TRUST PROPERTY + Tho property so helt Ie referred to at the “trust property" of ‘Lvvel res, which Is the subject matter of the trust. + Mh must consist vi property actusily in existence in whic the ustor hare tronsferable interest or tile although & may, ‘as a rule, bu any kire of transferable propers; etter raul or perssaity. Bui it eannat be = ‘mere expectancy Wi! out right of intorest of 0 mere Interest In the performances of & contract alhough gue Intorset Is In the nature of property night ‘The trust property Is owned by two persons at the same’ ume, the relation between the wo ‘oxsnets hain uch that ane of thers is under’ on sHilgativn 10 use his ownership for the ewaft of the ofnor, +The ownership ofthe tustee is a mere matter of toim rather than ubstanca, and. nominal aiver than seal. Tho trustee Is not a mere ‘agent, but an owner, © The ‘tusteo nels for hiniwelf i the acninishation of thy trust estete, although subject 40 tna torn of Ue trust ant the law on tists, Note: A trust fs net vokd for Indetinteness if by its ers the wholo property will go to beneficiarlos wno are undetermined but wil be velaimined at the ternaination of the trust, at the latest. 1 lx not necessary to thy ateetion of a trust thal the enatut que rrust be named or even be in exstence at tha tims of its creation, . CLASSIFICATIONS OF TRUSTS 1. as to offeativity = from the viewpoint of sshether they became affoctive atter the death of the tustor of during his tife, It may be cithee, a, Testamentary trusts b. Trusts inter vivos (sometmes called ‘living trast 2. a to cruation - from the viewpoint of the ‘creaulve force brisging them into existence, it hor: £ trust - erwated by the fatention of the trusior or of the parties: Ftomants of Exorees Trust ag i ep ere sn aaa en ent224 12009 CENTRALIZED BAR OVERNTIONIS Eyceptlon: An express trust over an immavalte for any interest therein (Art. 1443). This. latter Fequirement is'nct for valldity but for purposes of proof, NECESSITY OF ACCEPTANCE FOR ThE CREATION AND VALIDITY OF A TRUST RELATIONSHIP 1. Aeceptance of tie trustoo + Not nacessary to iis existence anc validity since if he declinas, the courts wil eppolnt a trusiee to fll the office that he decines (soe Soc. 3 Rule 98 of tho Rulns yf Court Note: Gut a trustee's acceptance of an ‘express trust Is necessary fo charge Kin with, the office of the trustee and the auministration, of the trust end to vest the legai tile in hit, 2. Acceptance of the onoficlary + Essential to the creation and validity ai a rus! However, such accoptance Is Presumed if there is no proof to the Sonirary ard the trusi oes aot impose any onerous cendition upon cho beneficiary REQUISITES OF A TRUSTEE TO CLAIM TITLE BY PRESCRIPTION 1. He has performed open and unequlvoce| acts af repudiation 2. Such positive acts of repuciation ove been made Anown to the beneficiary of Ihe celal ue trust 3. The eviden convincing and 4. The period fixed by law has expired (10 yeurs fron: the time that the repudiation is inade known to the oanefiziary in coses of excrose test or resulting trust while 19 yeas fran the lime a constructive trust arises), thereon should ba clear and * The existence of exeress trusts concerning teal property may not be estebilshre by parol evidence (Art. 7443), It must be proven by some wring or deed, Bare allegations ds not constitute evidence adequete lo sty.2cH a eonclution, They are nul eyulvalont to proof under the Rules of Court (Filpnas Port Somices, tne, v. Ge. GR No. 161986. Marsh *6, 2007) + While linplied trusts may be groved by ¢al evidence, the evidence must be Lusrworthy id Tecalved ‘by tho courts wit uxtiaune caution, and should not be made to rest on loose, equivoral or indefinite declaration s ‘The proof should be as fully convinci-g as i the acts giving rise to the ttust obligation are ‘Goan Beha College of Zaty ‘proven by an authentic decument (Filipinas Post Services Inc, v. So, supra). Expross Trust and Impliod Trust Distingulshod (CPR) Core |Createe by Ine Inenton lotto paces operation ofa. OTe FCC fan express rus! ovor an]An implld ust coe immovable progerty orlan immovable or any! any — Interest therein|interest thervin may be| cannot “bo. preved by/prved. by “om paral evidence evidenco. TR Pot aerree en ere pee SEE DAA Toe A express rejudiaticn|in constructive trusts, mado known to. thnlovenr Wie, (ty [benstciny ts naosampiane an in oder that leches ene bar on ache cauistivepreserponlontree, “an inate nny Baran” salon tlt eieeee an expe tus, Mole: The 10-year prescriptive perlod ln case of impliad ust begns to ren from the dote the trustee cepuciates the exprass trust, In tha case of Sps, Pascual et al. v. CA,,ot al GR No, 115925, August 18, 2003, 't” was held thal repudiation takes place when ‘he adverse party registers the land + The 4-year presctistive period uador Ait £281 applins only if tha ‘aud oces not give ‘ise to an implied trust, and the action Is to ‘annul a, Yoldasle contract under Ar, 1390, tust Punsu rian ion Btn ety apie a PaNRUISteROs Bray iddRtifbatign + or IMR Tho, neat iaSau Hoon Colle of ay Rosulting Lid Constructive Trust Eisthiquishod I [The Intent of the pities| Tio to croats 8 tux Iallraspoctve of or aven| presumed of Impila ty}eantrary to the Iiteatlon| law trom the natir off the partes to wromvote thelr transaction lwslice, frustrate fraud! a jand (9 preven! unjus! enrichment. oy [The 10 year prescr tive] The 10 yoar prescriptive! period shall be co tod|period shal. be counted from the repudiation own to ben z SLANE ilustrated in Anjsos|ilustrated in érules! 1448, 1449, 1461,.1662,|1480, 1454, 1466, ‘488 1453 Kinds af Implied Tesste 4. PureSase money resiiting trust (Art, 14:18) Whan propery In sold, and the legul ustate is Granted fo one party but the price Is paid by another party f2: the purpose of heving tre berofic'a Interest of the property, To give rise to a purchaee money resulting trust, itis essentia that thore be: 8, an actual pasment of money, propedy or cenices 2 an equivalent, conslitutiig vatiabla con sldoratiuns b, such consleration must bu finisher by thy aliegod henefilary ofa resiling trust Exceptions: a, Whers A prit the purchase ioney and Ile fa conv ye by absolnic ducd to /' child of fo 4, person to whom A stands in ico parertis and who makes no express promise, @ trust done not rosull, tho prosumption, being that a gif,’ was Intended; Where an actual controry Intention Is proved: c. Whore the purchase Is made In vioiation of an oxisll.y statute and in evasion ofits oxprose prayision, no truet oan result Ly favor of te porly.who le guilty of frasid (Tigno ys: Gout of sAprwalsy GR No. 110418, Coic-bor 8, 1997), 2. Donations made ‘6 & pe:son but the bar-eficial Interust is vestec In ancthar. Tho donee is EMORY AID IN CIVIL LAW] 225 {he iruste while the dasignated third person is tho beneticisry (Art, 1449) 3. Purchoso with borrowed "funds end the convayaiice fs rade to fencer to suewe payment of dats (Art. 1450) 4 Legal tke ta tant Inharites by heir plvcnd in ‘he name of enothat (Avt, 1451). 5. | egal ttle to property purehaned taken In one sa-ownar (A, 1462),- 5. Conveyance tinder @ promice to boi fer, nr transfer lo arming: (Art. 1453), 7. Absolute corvayence to a person to secure performance of grantor's chiligation (fit 1454) 8. Purchase of proparty with use of trust furs (Att. 1458) 8, Acguisition of property thiough mictnke or fraud (Art 1480), Note: + Encmoratton a NOT exclusive. + An actian for reconveyance of a parcel of land based on an Implied or constructive trust presurlbes In ten yeors, the rvint of referonce being the date of registration of the deed or tio date oi te Issuance of the certiicate of We over the property, OU", this ruly appiios only wher tha plaintiff (9° person enforcing the trust) Is not in possession of the property, new Ifa person claiming (0 be the owner {hereot is In actunl possession of the property, the ight to eoek reconveyance, whit in effect suehs to quial thie te property, does not proseribe, Ruquist.os bofere porlod of proscripilon may start in regard to 4 action based on an Implied trant: a, The inisie hay performed unecuivocal ucts of topudili nampa ouster of tha Ne We Y . {irvioiaion of aya mprinc|pal hy fetpery he was principal who was(2-226 ]2005 CENTRALIZED BAR OMERAT:ONS Gesignated and appointed him te regotate ‘withthe owner 4. In consonance with thn trust fand dost In Comporaticn" Law, tha assets of tne rorporation, a8 represented) by the capi.al stock, are regardad a8 “trust func’ to Le ‘maintained unimpalred for tve payment of corporate credtors v San Boda College of Lats eS CAN BRDA COLLEGE CF LAW 36