TITLE IX: PARTNERSHIP  The object must be for profit and not merely for common enjoyment, otherwise, only

a co-ownership
has been formed.
CHAPTER 1: GENERAL PROVISIONS  However, pecuniary profit need not be the only aim; it is enough that it is the principal purpose. Thus,
other ends — like social, moral, or spiritual objectives— may also properly exist.
By the contract of partnership two or more persons bind themselves to contribute money, property, or  It is a contract whereby two or more persons bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits among themselves. industry to a common fund, with the intention of dividing the profits among themselves, or in order
to exercise a profession.
Two or more persons may also form a partnership for the exercise of a profession. (1665a)  It is also a status and a fiduciary relation subsisting between persons carrying on a business in
common with a view on profit.
“two or more persons bind themselves”  While strictly speaking the exercise of a profession is not a business undertaking nor an enterprise for
 The must be the affection societis, the desire to formulate an ACTIVE union with people among profit, the law considers the joint pursuit thereof, for mutual help, as a partnership.
whom there exist mutual confidence and trust (delectus personarum)
 Just because the terms “partnership and “partners” appear in a contract between certain persons ELEMENTS
does not necessarily mean that a partnership has been entered into. (Paterson v. Eppler, 67 N.Y.S. 1. There is a meeting of the minds;
{2nd} 498) 2. To form a common fund;
3. With the intention that profits and losses will be divided among the contracting parties
 In general, a person capacitated to enter into contractual relations may become a partner ESSENTIAL FEATURES
 An unemancipated minor cannot become a partner unless his parent or guardian consents. Without 1. There must be a valid contract.
such consent, the partnership contract is voidable, unless other partners are in the same situation, in 2. The parties must have legal capacity.
which case the contract is unenforceable 3. There must be a mutual contribution of money, property or industry to a common fund.
 A married woman, even if already of age, cannnot contribute conjugal funds as her contribution to 4. The object must be lawful.
the partnership, unless she is permitted to do so by her husband (See Art. 125, Family Code), or 5. The primary purpose must be to obtain profits and to divide the same among the parties.
unless she is the administrator of the conjugal partnership, in which latter case, the court must give 6. The partnership has a juridical personality separate from individual partners [Article 1768].
its consent/authority. (See Art. 124, Family Code). 7. As such, "Any immovable property or an interest therein may be acquired in the partnership name.
 A partnership, may form another partnership wither with private individuals or with other Title so acquired can be conveyed only in the partnership name." [Article 1774]
partnerships, there being no prohibition on the matter
 The majority view is that a corporation cannot become a partner on grounds of public policy; CHARACTERISTICS OF THE CONTRACT
otherwise, people other than its offi cers may be able to bind it. However, it may enter into a joint A) Consensual – because it is perfected by mere consent
venture with another where the nature of the venture is in line with the business authorized in its B) Bilateral or Multi-lateral – entered into between two or more persons
charter. C) Nominate – designated by a specific name
D) Principal – its existence does not depend on the life of another contract
E) Onerous – certain contributions have to be made
“to contribute money, property & industry to a common fund” F) Preparatory – in the sense that after it has been entered into, other contracts essential in the carrying
 credit, such as that evidenced by a promissory note, or even mere goodwill — economic goodwill or out of its purposes can be entered into.
commercial credit, which is the sheer ability to obtain funds on credit — may be contributed for both G) Commutative – the undertaking of each is considered as equivalent of that of the others
credit and goodwill are considered properties — but not mere “political credit” or personal influence,
since this may be contrary to good customs HISTORICAL NOTES
 A license to construct and operate a cockpit can be given as contribution to a partnership.) (Baron v. a) Under Roman Law, partnerships existed, their features:
Pajarillo, et al., C.A., 146-R, Nov. 29, 1956). 1. There was no limit as to the number of partners.
 The “industry” contributed may be intellectual or physical. (11 Manresa 273) 2. In the Roman partnership (societas) one partner was not considered the implied agent of the
 A Limited partner cannot contribute mere “industry” (Art. 1845, Civil Code) others. Thus, to bind others, a partner had to obtain an express mandate (mandatum or
authorization) from each of the others.
“intention of dividing profits among themselves” 3. The partners were liable jointly, not solidarily
 There must be an intention of dividing the profit among the partners since the firm is for the common 4. The partners had the right to the beneficium competentiae, that is, they were held financially
benefit or interest of the partners liable only insofar as they would not be reduced to destitution.
 In the case of Evangelista, et al. v. Coll. of Int. Rev., L-9996, Oct. 15, 1957, it was held by the Supreme 5. The heirs (heres) of a deceased partner could not succeed to the rights of the deceased, even by
Court that where two people jointly borrowed from their father a sum of money which, together with express stipulation.
their own personal funds, was used by them in buying real properties for lease to third parties, such 6. A Roman partner could not retire in order to enjoy alone a gain which he knew was awaiting
investment consisting of a series of transactions and the management thereof being under one him
person for more than 10 years, the legal entity created by them is a partnership. b) Before the new Civil Code became effective on Aug. 30, 1950 there were two kinds of partnerships in
the Philippines:

celebration of the marriage — no contrary may be liable with their private property beyond liable only for payment of their subscribed capital 1784. insolvency. 1768. the administration and enjoyment of the partnership are agents thereof. an association of capital (See Figueras nationality of the controlling stockholders v. it is the law that governs PARTNERSHIP CORPORATIONS governs matters like object. it cannot How Long it Exists sue or be sued as such no time limit except agreement of parties not more than 50 years. the stockholders cannot bind as a rule. length of existence. While the civil partnership was governed by the old Civil Code. Based on this principle. 13 Phil. (Sec.. 11. have been repealed Law that governs in general. Rocha and Co. . partners acting on behalf of the generally. its capital the contracts begins it is registered in the Securities and Exchange is divided into shares. an association of persons Essentially. 124. profits are divided equally (but all other partners consent (This is due to the others agreement. all conjugal partnershiip property belong to both can bind both the firm and the partners are equally considered agents of the firm (Art. but never extended begins from the moment of the execution of the commences precisely on the date of the Liability to Strangers contract but a contrary stipulation is allowed (Art. Code). . the provisions of the Code of Commerce relating to by will or consent of the parties created by operation of law upon the celebration mercantile partnerships. the law is only subsidiary VOLUNTARY agreement of parties Created by the state in the form of a special Legal Personality charter or by a general enabling law (The possesses a legal personality (Art. retirement. registration in the mercantile a new partner. 504) Attainment of Legal Personality Division of Capital the firm becomes a juridical person from the time the firm becomes a juridical person from the time capital is NOT divided into shares although a special form of partnership. Whether it was registered or not was not important — for the difference lay in the ends desired. the form of organization.”) Civil Code) Ability to Bind the Firm Management generally. profits are divided according to previous as a rule. in the absence of a clear showing as to whether the another person. 1797. and if there is no agreement. civil interdiction. Corp. natural resources and the operation of public PARTNERSHIP JOINT-STOCK COMPANY utilities in the Philippines. Choice of Person) . spouses jointly (Art. Civil Code) a partner can sue a partner who mismanages a stockholder cannot sue a member of the board Dissolution of directors who mismanages: the action must be there are many grounds for dissolution there are few grounds for dissolution in the name of the corporation Liquidation of Profits Nationality there may be division of profits even without there will be no liquidation or giving of profi ts till a partnership is a national of the country it was a corporation is a national of the country under dissolution after dissolution created whose laws it was incorporated. consequently they corporation since they are not agents thereof partners so appointed by the others. like in a corporation Commission.. registry. a partner has the right to accept or reject a candidate proposed as object was civil or commercial. How Created etc. Civil Code) does not possess any legal personality distinct Corporation Code) from that of the husband or wife. Commercial or Mercantile Partnership – object was to deal in mercantile transactions Delectus Personae (LATIN. Family Code) and confidence — the “delectus personarum. even without the consent of the as a rule. except for wartime purposes or for the acquisition of land. The rule that when personal relations are important. in which case the veil of Company corporate identity is pierced and we go to the Essentially. the Code of Commerce ORDINARY PARTNERSHIP CONJUGAL PARTNERSHIP controlled the mercantile variety How Created . and the provisions of the old Civil Code concerning civil partnerships of the marriage (b) in general. or such causes do not dissolve a corporation partners may be liable with their individual liability of the members is only up to the extent of insanity of a partner dissolves the firm . management is conferred upon the as a rule. a transfer of interest makes the transferee a Division of Profit the transferee does not become a partner unless stockholder. Civil Partnership – engaged in civil purposes 2. was held indicative of its nature as a commercial partnership. it is the will of the partners that in general. in a board of directors Dissolution Liability death. and all requisites have been Management complied with generally. Family Code) Mismanagement 1803. in all the partners generally. 1. a person cannot be compelled to associate with not the manner of organization — although. otherwise. Civil Code) stipulation is allowed their contribution to the firm stock Purpose Transferability pf Interest formed for profit not formed particularly for profit even if a partner transfers his interest to another. principle of mutual trust proportion to the amount contributed (Art. With the advent of the new Civil Code. 106. that is. hence. may Commencement of the Partnership be reduced. in settlement can provide otherwise) (Art.

XII. was suspended. or to those acquired by the exercise of the right of conventional  “Agency” may in one sense be considered the broader term because “partnership” is only a form of redemption — even if the redemption took place after the Constitution took effect — as long as “agency. Const. member of the Code Commission. AGENCY date of the Constitution. so long as the contract has the essential requisites. (See Secs. considering that the total of the evidence proves that respondent and Jacinto indeed forged the partnership in  In a true business trust. another 5 years.properties after exhaustion of the partnership their shares if such is what the statute provides assets (See Hibbs vs. Neither would the prohibition apply with reference to lands purchased before the effectivity PARTNERSHIP v.J. 1 of Art.Y. 341-342). PARTNERSHIP v. it may have been organized to carry out a particular undertaking or for some temporary objective . can. that is. (b) Foreign partnerships may lease lands provided the period does not exceed 99 years. 7. the prohibition would not apply. 190 N. when sued later on for recovery of the debt. Art. (RA 133) with no firm name and no legal personality. (See 33 C. the tenant does not represent the the Parity Act). no such person is created in the relationship between landlord and tenant being political in nature.  Thus. 10 & 11. it cannot sue as such. 1768. 1772. 1772 “is not intended capital is given in money. . However. they are exempted from personal liability. In a joint account. Chua Purpose or Objective GR 143340. they cannot purchase the same at the foreclosure sale. Limitations on Alien Partnerships PARTNERSHIP v.) . it possesses no legal personality. though it apparently carries on the business as a business of pursuing it to a successful termination may continue for a number of years. a partnership partnership. but not necessarily. Aug. question. Rules in Case of Associations Not Lawfully Organized as Partnerships  Usually. property. hence. The reason is that the borrower is in estoppel  A syndicate (of American origin) is usually a particular partnership. the cestui que trust (beneficiaries) do not at all participate in the management. it to give notice to third persons. 1st Paragraph (Registration With the Securities and Exchange Commission) PARTNERSHIP SOCIAL ORGANIZATION  The partnership is still a juridical person. for the duration of  A partner acts as agent for the partnership whom he represents. even in case partner unless all the other partners consent member without any necessity of consent from of failure to comply with the requirements of Article 1772. The 1987 Phil. SYNDICATE even if indeed it had no personality.” partners are liable only after the partnership members are the ones individually liable for the assets are exhausted debts of the organization. Lamberto T. In the case at bar. at a time when the Constitution. a joint adventure is limited to a SINGLE TRANSACTION.  So that the tax liabilities of big partnerships cannot be evaded.  When certain persons entrust their property or money to others who will manage the same for the former. BUSINESS TRUSTS can be assumed that the members themselves knew of the content of their contract. but the “partners” in their individual capacity. principally financial organized usually only for social or civic objectives Personality Art. interests) and an agent (for the firm and the others). fees are as a prerequisite for the acquisition of juridical personality by the partnership. and it PARTNERSHIP v. of course. 2001 organized for gain. (This is true even if the rent is measured by the amount of the tenant’s profi ts while conducting a XIII. the managers are the trustees. Art. TENANCY (a) If at least 60% of the capital of a partnership is not owned by Filipinos (or by Americans. there being no prohibition regarding lease. or services no capital is given although. (n) the other members Effect on Non-Compliance With Art. 5. JURIDICAL PERSONALITY OF PARTNERSHIP Effect of Transfer of Interest transferee of partner’s share does not become a transferee of member’s shares himself becomes a The partnership has a judicial personality separate and distinct from that of each of the partners. the participating merchants can transact business under their own name. the firm cannot acquire by purchase or otherwise agricultural Philippine lands. non-compliance with this directory provision of the law will not invalidate the partnership  The investors are called cestui que trust. PARTNERSHIP v.) business on the premises. a business trust is created. If the land was purchased during the Japanese occupation. pp. 1768 explicitly provides that the partnership retains its juridical personality even if it fails to register. Failure a legal person Npt a legal person to register the contract of partnership does not invalidate the same as among partners. and the public can also determine Liability for Debts more accurately their membership and capital before dealing with them. and can be individually liable therefor. assuming all other requisites are present Contribution  According to Dean Capistrano.. although the  If an association is not lawfully organized as partnership. 15. 2. 167) ART. debts authorized or Lilibeth Sunga-Chan & Cecilia Sunga ratified by said members v.  A partnership is a legal person. 1935 Const. landlord.’’ the sale a retro had been made before said Constitution. a partner is both a principal (for his own a vested right. JOINT ADVENTURE (JOINT ACCOUNTS) (c) Foreign partnerships may be the mortgagees of the land. To hold otherwise would be to impair  An agent never acts for himself but only for his principal. par. allege the lack of legal personality on the part of the firm. (Sec.). in that they can be bound only to the extent of their contribution. generally relates to a continuing business of various transactions of a certain kind. because the main purpose of registration. but merely as a usually collected condition for the issuance of license to engage in business or trade. particularly if there is no agreement as to the sharing in losses. first paragraph. the mortgage to last for 5 years renewable for  A joint adventure (an American concept similar to our joint accounts) is a sort of informal partnership. Brown.  One who enters into contract with a “partnership” as such (as when he borrows money therefrom) cannot.

 the testimony of the witnesses regarding the existence of the partnership as well as documentary possessors do or do not share any profits made by the use of the property. a general merchandise partnership. business and entered into an agreement with its creditors to the effect that the business should be continued  Presently. 1] and Art. As interest on a loan. no time fixed for the expiration of the alleged partnership. (Art. 1952. State. . no firm accounts. inform a stranger THEREFORE: that said friend is their partner. Salazar..A. 3. those formed in America generally do not have Valderrama and Co. When an unlawful partnership is dissolved by a judicial decree.  A difference must be made between LENDING money to a business proprietor. As wages of an employee or rent to a landlord. in a partnership. (Morrison v. But its absence. persons who are not partners as to each other are not partners as to agreement as to profits and losses. no (1) Except as provided by Article 1825. pp. Of course. The third persons.S. (3) The sharing of gross returns does not of itself establish a partnership. in connivance with a friend (who is not a partner). 46 Phil. the partnership can still validly exist so long and INVESTING it as CAPITAL in the business. Sobert. Sept. and not contrary to law. 1 Phil.. Meister. possible. as the illegal purpose can be separated from the legal purposes. C. 1769 (No. (See 40 Am. this was not essential. Feb. 28. negates the assumption that a partnership existed. 1347 and 1348. (n) (Padilla v. (See Art. single written account. (b) mere sharing of GROSS returns (even with joint ownership of the properties involved) do not establish a partnership. 4). Jr.W. 1956). the partners are supposed to trust and have confidence in  whether a partnership has juridical personality or not depends on its personal law all the partners — this element is not present in the instant case. 1947). 144-145). whether or not the persons Estate of P. has become insolvent for maladministration of the (except for the purpose of insolvency proceedings). Alegre. Moreover. the partnership contract is VOID AB INITIO. Can you consider individuals. et al.Distinction Between Partnerships in the Philippines and Those in America Bar  While Philippine partnerships have a juridical personality. (CA) L-7244-R. c. 380  Otherwise. one adhering to the old common law conception that a partnership is simply an aggregate of creditors. 1825. and the other building up the newer conception that a partnership exists as an entity distinct the creditors who are parties to the agreement partners? Reasons. Jun.. whether such-co-owners or co. 50 Wyo. these rules shall apply:  there was no firm name. though the amount of payment vary with the profits of the business. for their only interest in the sharing of profits is the receipt or payment of Partnership From the Viewpoint of Private International Law their credits. together with other in the business. (See Fernandez v. one of which is unlawful. or any memorandum concerning it. public order or public policy (See also Arts.. 669)  when 2 persons. a partnership by estoppel may also result to the end that the stranger (a) mere co-ownership or co-possession (even with profi tsharing) should not be prejudiced. any d. RULES FOR DETERMINING EXISTENCE OF PARTNERSHIP  No definite criterion can be set up except that all the characteristics of the contract must be proved as being present In determining whether a partnership exists. Civil Code). 14. evidence (letters) thereon resulted in the court’s finding that indeed a partnership existed. 180 N. There was no (4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner written agreement. if the business licenses have e.A. 16. Civil Code). how can we say that a partnership exists? otherwise. 1770. without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and  the Court of Appeals observed that the payment of a commission on sales made by a partner does not effects of a crime. a partnership by estoppel 2. an arrangement to be carried out until the claims of the creditors are fully satisfied. As an annuity to a widow or representative of a deceased partner. but no such inference shall be drawn if such profits were received in payment: circumstances and the fact that there was not even an attempt to submit an accounting for the whole a. De la Rosa. Jur. Moreover. Tomas Lim Hon. Civil Code). and must be established for the common benefit or Sharing of NET profits is prima facie evidence that one is a partner except in the five instances enumerated interest of the partners. In fact. from the partners. 1769 [No. C. Dinkelspeed v. LAWFUL OBJECT Sharing of Net Profits A partnership must have a lawful object or purpose. a 60-40 basis proved fruitless because of insuffi cient and contradictory evidences. ANS. (1666a) preclude (exclude) the existence of a partnership. ART.  The personal law of a partnership is the law of the place where the partnership was organized Proof Needed to Establish the Existence of a Partnership ART. (Art.: The creditors are not partners. L-163-R. there was a joint interest in the profits. 1769. As the consideration for the sale of a goodwill of a business or other property by installments or been issued separately in favor of private individuals. no firm letterheads. morals. et al. Lewis. such a practice is oftentimes adopted in business circles as an added impetus among partners in the sale and disposition of goods that make up their Lawful Object or Purpose common assets and property  it must be within the commerce of man. 1769). who are partners. there was a common fund obtained from contributions results. (Kiel v. b. L-5258. period. no certificate of partnership. 395) (2) Co-ownership or co-possession does not of itself establish a partnership.. good customs. there was an intention to create a partnership  If two persons not partners represent themselves as partners to strangers.. and contributing money  If a partnership has several purposes. the profits shall be confiscated in favor of the People v.  The court held that it is hard to believe that a partnership has been formed without any book. As a debt by installments or otherwise. Juan A. 193) sharing them have a joint or common right or interest in any property from which the returns are  An attempt to prove the existence of a partnership concerning the operation of a cinema house upon derived. under Art. Requisites for Existence of Partnership Partnership by Estoppel 1.. two divergent legal theories as to the nature of a partnership have been developed by United for the time being under the direction and management of an experienced businessman appointed by the States Courts. 1409. Court correctly ruled that a partnership did not exist. (Salada v.

the oral partnership would be void. v. prom.  An unlawful partnership has no legal personality. Rev.regardless of the value. For here. GENERAL RULE: No form is required regardless of the value of the contributions. unless they be the property of a third person not liable for the offense. the same should be in writing to be enforceable under the Statute of Frauds. there must be an INVENTORY of the immovables. Sept. 1357. 2 Phil. the same must be REGISTERED if REAL PROPERTIES are involved. the contract is VOID. NB: The rules for limited partnerships are different For EFFECTIVITY of the partnership contract insofar as innocent third persons are concerned. ANS. Consequences of Unlawful Partnership Moreover. Jur. he cannot be obliged to do so. (Chateau v.” Should the oral partnership formed be considered valid? indeed unlawful. 27). the partners cannot be made to make the contributions (See 1 Manresa 279). (Torres v. et al. because Art. a very personal act (acto personalisimo) of courts may not compel compliance. even a private one. This is particularly true when the object was lawful at the beginning but has later on become unlawful. 1953). still if one of those who had so agreed refuses to carry the agreement and to execute the necessary Formalities Needed partnership papers. not to GIVE.. they can be RETURNED. 1015). 28.Calinao. et al. Civil Code.  The contract itself must be in the public instrument. ANS. So long as an agreement remains executory.A.] EXCEPTION: Whenever real properties or real rights in real properties are contributed. L-4474. 114 Cal. No. III.000.” NOTE: Had real property been contributed. the “forfeiture of the proceeds of the crime and the instruments or tools with which it was committed partnership is inchoate. except where immovable property or real rights are contributed thereto. Civil Code). Puzon.: No. An agreement to form a partnership does not of itself create a partnership. Pesayco. 53 Phil. contracts “where the amount involved exceeds P500 [such contract] must appear in convenient for everybody. the Revised Penal Code governs both the criminal liability and the agreement to enter into a partnership at a future time. 1830 of the Civil Code. moreover. does the partnership immediately arise from the (b) A partnership formed to create illegal monopolies or combinations in restraint of trade. FORM OF PARTNERSHIP CONTRACT Since therefore the agreement is to be enforced after one year from the making thereof. (1667a) [NOTE: In one case our Supreme Court ruled that even if there was a prior agreement to form in the future a partnership. first. but those articles which are not subject of lawful commerce shall be destroyed. (Art. Singla. if the contributions have not agreement? yet been made. 30. citing 40 Am. the conditions or the arrival of the term. (c) A partnership for gambling purposes.” (Art. Penal Code). Que Bentec. C. [2][a]). Polistico.. et al. . Sec. there would be nothing wrong in having the court dissolve the partnership. This is. When there are conditions (d) A partnership formed for the purpose of acquiring parcels of land much in excess of the maximum to be fulfilled or when a certain period is to elapse. each one to contribute has been instituted P1. 661. L-10099-R. It is true that a partnership contract is not governed by the Statute of Frauds but here. Now then.  Under Art. (See Arbes. Without such inventory. and therefore not one of the partners can compel the others to execute the public instrument. 489). see makes it unlawful for the business of the partnership to be carried on. partnership. moment of said agreement? Rev. 1358 applies only for the purpose of convenience and not for validity or enforceability. 142. in which case a public instrument shall be necessary. 1358.” (Limuco v.)  Without the public instrument. can the other enforce the o If the contributions have already been made. one of the causes for the dissolution of a partnership is “any event which Being valid. (Art. Jul. If at the arrival of the period. provided no criminal prosecution A and B today orally agreed to form a partnership one and a half years from today. the partnership is not created till after the fulfillment of allowed by the Friar Lands Act. 45. Government. Sept. This INVENTORY must be signed by the parties and attached to the public instrument. ART. and therefore never existed from the viewpoint of the I. under the last  However. The contract may even be therefore. 453).a PUBLIC INSTRUMENT is needed. (Woodhouse v. 31. there is merely an agreement to form a partnership in the future. 1773. 59 Phil. 1403.: No. his obligation is one to DO. 186. Penal Code). If two persons agree to form a partnership in the future. Halili. This will be good and paragraph of Art.  The partners forfeit the proceeds or profits. law. not having been called into being by the concerted action necessary under the o Such proceeds and instruments or tools shall be confi scated and forfeited in favor of the partnership agreement. “there is a marked distinction between a partnership actually consummated and an  If the firm is also guilty of a crime. L-4811.Judicial Decree is NOT Needed to Dissolve an Unlawful Partnership Problems  Since the contract is void from the very beginning. A partnership may be constituted in any form. A partnership was formed orally though more than P500 was contributed in cash. as it is an act of ORAL (NB: Partnership contract is not one of those covered by the Statute of Frauds) violence to do so. the contract can be put in writing upon the demand of any of the parties. one refuses to go ahead with the agreement. (See Art. there may be a question as to whether or not the partnership is writing.] Instances When a Partnership Is Unlawful (a) A partnership formed to furnish apartment houses which would be used for prostitution. because the agreement was merely oral and executory. and this is true even if one of the parties has already advanced his agreed share of the capital. the partnership is VOID  The inventory is important to show how much is due from each partner to complete his share in the common fund and how much is due to each of them in the event of liquidation. 1771. 1950). 1953. moreover. see also Magalona v. (See Art.: Yes.. or for the members to carry it on in also Thunga Chui v. II. but NOT their contributions. ANS.

Rules of Court). purpose of evading compliance with obligations contracted by them (Art. (Art. The same rule applies in the case of a partnership by estoppel. cannot ordinarily be a Requirements Where Immovable Property is Contributed party to a civil action. partnership and the members thereof to third persons. ART. capable of owning and possessing property. (Rule 3. 15. 7. which must be recorded in the Office of the Securities and Exchange  thru hereditary succession (by the partners who in turn convey the same to the partnership) or Commission. or insofar as third persons are prejudiced. (See Art. 1 and 5. and shall be execute the needed public instrument. insofar as innocent third parties are concerned. IF ARTICLES ARE KEPT SECRET  Of course if real properties had been contributed. timber or mineral Purpose of the Registration lands (See 1935 and 1987 Constitutions). the inventory need not include the personality. ACQUISITION OF IMMOVABLE PROPERTY BY PARTNERSHIP Any immovable property or an interest therein may be acquired in the partnership name. 1775. governed by the provisions relating to co-ownership.ART. 1357. IF IMMOVABLE PROPERTY IS CONTRIBUTED  The association here is certainly not a partnership and therefore not a legal person. or whether agricultural or Every contract of partnership having a capital of three thousand pesos or more. 46). any of the partners of a valid partnership can compel the others to members may contract in his own name with third persons. Effect of Non-Registration  Even if not registered. (a) acquire. Krivenko v. XIII. Sec. 1987 Failure to comply with the requirements of the preceding paragraph shall not affect the liability of the Constitution). 1. (1668a) otherwise. and not in behalf of a partnership which does not exist in legal contemplation.024 hectares. notwithstanding the absence of a partnership  The transfer of the land to the partnership must be duly recorded in the Register of Property to make the  when two or more individuals having a common interest in a business bring a court action. WHEN VOID. Civil Code). same can apply also to personalty because the partnership is a juridical entity. 1773). ART. lease. 1773).  The registration is to set “a condition for the issuance of licences to engage in business or trade  In this way. the partnership having a capital of P3. shall have no juridical personality. Civil Code). 1773. whenever immovable property is contributed thereto.  when 60% of the capital is owned by Filipinos (or Americans during the duration of the Parity Amendment). Secs. signed by the parties. even if entirely of Filipino capital may not: Philippines. Art. p. in money or property. exploitation. o They who caused the nullity of a contract are prohibited from availing of its benefits  Therefore. or hold public agricultural lands in excess of 1.” (Dean Capistrano. Title so acquired can be conveyed only in the partnership name. XII. a) There must be a public instrument regarding the partnership. regardless of value. property is not made. shall commercial. signed by the parties. and therefore has legal personality. 1768. A contract of partnership is void. 1774. (Art. because it has no legal personality and. the partners can be considered as members of a Applicability of the Article partnership.) Effect of Certain Transactions  contracts entered into by a “partner” in his own name may be sued upon still by him in his individual Registration in the Register of Property capacity.000 hectares. (1669) (This right cannot be availed of if the partnership is VOID) If Articles Are Kept Secret ART. 260). (But here. because “anyone of the members may contract in his own name with third persons” and not in the name of the firm. . it cannot own lands. of Deeds. Sec. Civil Code). presumed that they prosecute the same in their individual capacity as co-owners. and the public can also determine more Limitations on Acquisition accurately their membership and capital before dealing with them. 1825. only the rules on co-  applies regardless of the value of the real property. it should be transfer effective insofar as third persons are concerned. 1935 Constitution. aside from real property. and to subsequently cause its registration. said innocent third parties may be prejudiced. the tax liabilities of big partnerships cannot be evaded.  However. Rules of Court). 461 and Art. (n) The same rule applies to the development. ownership must apply. whose articles are kept secret among the members. 1775). if an inventory of said  Although not a juridical entity. whether public or private. Reg. (See  applies even if only real rights over real properties are contributed. (Art.  applies also if. it cannot sue as such. or utilization of public agricultural. and attached to the public instrument. but as between themselves. cash or personal property is contributed. 79 Phil. and attached to the public instrument. a public instrument is needed for the attainment of legal personality Associations and societies. it may be sued by third persons under the “common name” it uses. (Rule 3. o The fact that it has no legal personality as a partnership cannot be invoked by the “partners” for the b) The inventory of the realty must be made. 1772. (See Art. (n) Acquisition of Property Under the Partnership Name Though the Article speaks only of immovable. and wherein any one of the  If registration is needed or desired. IV Civil Code of the A partnership. (b) lease public lands adapted to grazing in excess of 2. except: appear in a public instrument.000 or more is still a valid one. Sec. SEC REQUIREMENT Alien Partners If the partnership has aliens. therefore. (Art.