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law on Business Organizations Reviewer

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PARTNERSHIP
Art. 1767.
By the contract of partnership
two or more persons bind themselves to
contribute money, property, or industry to
a common fund with the intention of
dividing the
profits among themselves
.
Definition
Partnership
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
profits among themselves.
Elements
1.
Intention to form a
contract of
partnership
2.
Participation in both profits and losses
3.
Community of interests
Basic Features
1.
Voluntary agreement
2.
Association for profit
3.
Mutual c
ontribution to a common fund
4.
Lawful purpose
or object
5.
Mutual agency of partners
6.
Articles must not be
kept secret
7.
Separate juridical personality
Characteristics
1.
Consensual

perfected by mere
consent.
2.
Bilateral

formed by two or more
persons creating reciprocal rights and
obligations.
3.
Preparatory
-
entered into as a means
to an end.
4.
Nominate

has a sp
ecial name or
designation.
5.
Onerous

contributions in the form of
either money, property and/or industry
must be made.
6.
Commutative

the undertaking of each
partner is considered as the equivalent
of that of the others.
7.
Principal

its existence or validi
ty does
not depend on some other contract.
Principle of
Delectus Personae
(choice of
persons)

a person has the right to select
persons with whom he wants to be
associated with in partnership.
Art. 1768.
The partnership has a juridical
personality sepa
rate and distinct from that
of each of the partners even in case of
failure to comply
with the requirements of
Article
1772,
first paragraph.
Partnership, a juridical person
As an independent juridical person, a
partnership may enter into contracts,
acquire and possess property of all kinds in
its name, as
well as incur obligations and
bring civil or criminal actions. Thus, a
partnership may be declared insolvent even
if
the partners are not. It may enter into
contracts and may sue and be sued in its
firm name or by its duly authorized
representative. It is sufficient that
service
of
summons be served on any partner.
Partners cannot be held liable for
the
obligations of
the partnership unless it is
shown that the legal fiction of
a different
juridical
personality is being used for a
fraudulent, unfair or illegal
purpose.
Effect of failure to comply with
statutory
requirements
Under Art 1772
Partnership still acquires personality despite
failure to comply with the requirements of
execution
of
public
instrument
and
registration of name in SEC.
Under Arts 1773 and 1775
Partnership with immovable property
contributed, if without requisite inventory,
signed and attached to public instrument,
shall not acquire any juridical
personality
because the contra
ct itself is void. This is
also true for secret associations or societies.
To organize a partnership not an
absolute
right
It is but a privilege which may be enjoyed
only under such terms as the State
may
deem necessary to impose.
Art.
1769.
In
determini
ng
whether
a
partnership exists, these rules shall apply:
1.
Except as provided by
A
rt
icle
1825,
persons who
are not partners as to
each other are not partners as to
third
persons
.
2.
Co
-
ownership or co
-
possession does
not of
itself establish a partnership,
wh
ether such co
-
ownership or co
-
possessors do or
do not share any
profits made by the use of the property
.
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3.
The sharing of gross returns does not
of
itself
establish
a
partnership,
whether or not the persons sharing
them have a joint or common right or
inter
est in any property fro
m which the
returns are derived.
4.
The receipt by a person of a share of
the profits of a business is
prima
facie
evidence that
he is a partner in the
business, but no such inference shall be
drawn
if such profits were received in
pay
ment:
a.
As a debt by installments or
otherwise.
b.
As wages of an employee or rent to
a landlord.
c.
As an annuity to
a widow
or
representative
of
a
deceased
partner.
d.
As interest on a loan, though the
amount of payment vary with the
profits of the business.
e.
As the consideration for the sale of
a goodwill of a
business or other
property
by
installments
or
otherwise.
In general, to establish the existence of a
partnership, all of its essential
features or
characteristics must be shown as being
present. In case
of doubt, art.1769 shall
apply. This article seeks to exclude from the
category
of
partnership
certain
features
enumerated herein which, by
themselves, are not indicative of the
existence of a partnership.
Persons not partners as to each other
Persons who are partners as between
themselves are partners as to third persons.
Generally, the converse is true: if they
are
not partners between themselves, they
cannot be partners as to
third persons.
Partnership is a matter of intention, each
partner g
iving his consent to become
a
partner. However, whether a partnership
exists between the parties is a factual
matter. Where parties declare they are
not
partners, this, as a rule, settles the question
between them. But where a person
misleads third persons
into believing that
they are partners in a non
-
existent
partnership, they become subject to
liabilities
of
partners
(doctrine
of
estoppel).Whether or not the parties call
their relationship or believe it to be a
partnership is immaterial. Thus, with the
e
xception of partnership by estoppel, a
partnership cannot exist as to third persons
if no contract of
partnership has been
entered
into
between
the
parties
themselves.
Co
-
ownership or co
-
possession
There is co
-
ownership whenever the
ownership of an undivi
ded thing or right
belongs to different
persons.
Clear intent to derive profits from
operation of
business
Co
-
ownership does not of itself establish
the existence of a partnership, although it is
one of its essential elements. This is true
even if profit
s are derived from the joint
ownership. The profits must
be derived
from the operation of business by
the
members of the association and
not
merely from property ownership. The
law does not
imply a partnership between
co
-
owners because of the fact that
the
y
develop or operate a common property,
since they may rightfully do
this by virtue of
their respective titles. There must be a clear
intent to form a partnership.
Existence of fiduciary
relationship
Partners have a well
-
defined fiduciary
relationship
between them. Co
-
owners do
not. Should there be dispute; the
remedy of
partners is an action for dissolution,
termination and accounting. For co
-
owners
it would be one, for
instance, for non
-
performance of contract. People can
become co
-
owners without a co
ntract but
they cannot become partners without one.
Persons living together without
benefit
of
marriage
Property acquired governed by rules on co
-
ownership.
Sharing of gross returns not even
presumptive evidence of partnership
The mere sharing of gross
returns alone
does not
even constitute
prima facie
evidence of partnership, since in a
partnership, the partners share profits after
satisfying all o
f the partnership’s liabilities.
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Reason for the rule
Partner interested in both failures and
successes; it
is the chance of loss or gain
that characterizes a business. Where
the
contract requires a given portion of
gross returns to be
paid over, the portion is
paid over as
commission, wages, rent, etc.
Where there is evidence
of mutual
management
Where there
is further evidence of mutual
management and control, partnership may
result.
Receipt of share in the profits strong
presumptive evidence of partnership
An agreement to share both profits
and
losses tends strongly to establish the
existence of a partner
ship. It is not
conclusive, however, just prima facie
and
may be
rebutted by other circumstances.
When no such inference will be drawn
Under par. 4 of art. 1769, sharing of
profits
is not prima facie evidence of partnership in
the cases enumerated under
subsections (a)

(e). In these cases, the profits are not
shared as partner but in
some other
respects or
purpose.
The basic test
of
partnership is whether the business is
carried on in behalf of the person sought to
be held liable.
Sharing of profits as
owner
It is not merely the sharing of profits, but
the sharing of them as co
-
owner of the
business or undertaking that
makes one
partner. Test: Does the recipient have an
equal voice as proprietor in the conduct and
control of the
business? Does he own a
share of the profits as proprietor of the
business producing them? One must have
an interest with another in the profits of a
business as profits.
Burden of proof and
presumption
The burden of proving the existence of
a
partnership rests on the party hav
ing the
affirmative of that issue. The existence of
a
partnership must be proved and will not
be presumed. The law presumes that those
acting
as partners have entered into a
contract of partnership. Where the
law
presumes the existence of partnership, the
burden of
proof is on the party denying
its
existence. When a partnership is shown to
exist, the presumption is that it
continues
and the burden of proof
is on the
person
asserting its termination. One who alleges
partnership cannot prove it merely by
evid
ence of an agreement using the
term
“partner”. Non
-
use of the term, however,
is
entitled to weight. The question of
whether a
partnership exists is not always
dependent upon the personal arrangement
or understanding of the parties. Parties
intending to do
a thing which in law
constitutes partnership are partners.
Legal intention is the crux of partnership.
Parties may call themselves partners but
their contract may be adjudged something
quite different. Conversely, parties may
expressly state that theirs
in
not a
partnership yet the law may determine
otherwise on the
basis of legal intent.
However, courts will be influenced to some
extent by what the parties call their
contract.
Tests and incidents of partnership
In determining whether a partnership
exist
s,
it
is
important
to
distinguish
between tests or indicia and incidents of
partnership. Only those terms of a contract
upon which the parties have reached an
actual
understanding, either expressly or
impliedly, may afford a test by
which to
ascertain the
legal nature of the contract.
Some of the typical incidents
of a
partnership are:
1.
The partners share in profits and
losses.
2.
They have equal rights in the mgt and
conduct of the partnership business.
3.
Every partner is an agent of the
partnership, and entitle
d to bind the
others by his acts. He may also be liable
for the entire partnership obligations.
4.
All partners are personally liable for
the
debts of
the partnership with their
separate property except that limited
partners are not
bound beyond the
amount of
their
investment.
5.
A fiduciary relation exists between
the
partners.
6.
On dissolution, the partnership is not
terminated, but continues until the
winding up of
partnership is completed.
Such incidents may be modified by
stipulation of the partners.
Similari
ties between a partnership and a
corporation
1.
Both have juridical personality separate
and distinct from that of
the individuals
composing it;
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2.
Both can only act through its agents;
3.
Both are organizations composed of an
aggregate of individuals;
4.
Both distrib
ute profits to those who
contribute capital to the business;
5.
Both can only be organized where there
is a law authorizing is organization;
6.
Partnerships
are
taxable
as
corporations.
Art. 1770.
A partnership must have a lawful
object or purpose, and must be
established
for the
common benefit or interest of
the
partners. When an
unlawful
partnership is
dissolved by a
judicial decree,
the profits
shall be confiscated in favor of the
State,
without prejudice to the provisions
of
the
Penal
Code
governing
the
confiscation of the instruments and effects
of a crime. Object or purpose of partnership
The provision of the 1
st
paragraph
reiterates 2
essential elements of a
contract of partnership:
1.
Legality of the object; and
2.
Community of benefit or in
terest of the
partners. The parties possess absolute
freedom to choose the transaction or
transactions they must engage in.
The
only limitation is that the object must
be lawful
and for
the common benefit
of the
members. The illegality of the
object will n
ot be presumed; it must
appear to be of the essence of the
relationship.
Effects of an unlawful partnership
1.
The contract is void and the partnership
never existed in the eyes of the law;
2.
The profits shall be confiscated in favor
of the government;
3.
The ins
truments or tools and proceeds
of the crime shall also be forfeited in
favor of the government;
4.
The contributions of the partners shall
not be confiscated unless they fall
under #3.
A partnership is dissolved by operation of
law upon the happening of an e
vent which
makes it unlawful. A judicial decree is
not
necessary to dissolve an unlawful
partnership.
However
,
advisable
that
judicial decree be secured. 3
rd
persons who
deal w/ partnership w/o knowledge of
illegal
purpose are protected.
Right to return o
f contribution where
partnership is unlawful
Partners must be reimbursed the amount of
their respective contributions. The partner
who limits himself
to demanding only the
amount
contributed by him need not resort
to the partnership contract on
which to
ba
se his claim or action. Since the purpose
for which the contribution was made has
not come into
existence, the manager or
administrator must return it, and he who
has paid his share is entitled to recover it.
Right to
receive profits where partnership
is
unlawful
Law does not permit action for obtaining
earnings from an unlawful partnership
because for that
purpose, the partner will
have to base his action upon the
partnership contract, which is null and
without legal existence by reason of its
unlawful ob
ject; and it is self
-
evident that
what does not exist cannot be a cause
of
action. Profits earned do not constitute
or
represent the partner’s contribution. He
must base his claim on the contract which is
void. It would be immoral and unjust for the
law to
permit a profit from an
industry
prohibited by it. T he courts will refuse to
recognize its existence, and will not lend
their aid to assist either of the parties
thereto in an action against each other.
Therefore, there
can
not be no accounting
demanded o
f a partner for the profits which
may be in
his hands, nor can recovery be
had.
Effect of partial illegality of partnership
business
Where a part of the business is legal and
part illegal, a
n account of that which is
legal may be had. Where, w/o the
knowledge or participation of the partners,
the firm’s profits in a lawful business has
been increased by wrongful acts, the
innocent partners are not precluded as
against the
guilty partners fro
m recovering
their share of the profits.
Effect
of
subsequent
illegality
of
partnership business
Contract will not be nullified. Where the
business for which the partnership is
formed is legal when the partnership is
entered into, but afterward becomes il
legal,
an accounting may be had as to the
business transacted prior to such time.
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Community of interest between the
partners for business purposes
The
salient
features
of
an
ordinary
partnership are a community of interest in
profits and losses, a communi
ty of interest
in the capital employed, and a community
of
power in administration. This community
of interest is the basis of the partnership
relation.
However,
although
every
partnership is founded on a
community of
interest, e very community of interest
does
not necessarily constitute a partnership.
Property used in the business may belong
to
one or more partners, so that there is
no
joint property, other than joint earnings.
To
state that partners are co
-
owners of a
business is to state that they
have t
he
power if
ultimate control. But partners may
agree upon concentration of management,
leaving some of their members entirely
inactive or dormant. Only one of these
features,
profit
-
sharing,
seems
to
be
absolutely essential. But a
mere sharing of
profits o
f
itself does not of
necessity
constitute a partnership. The court must
consider all the essential elements in light
of the facts of the particular case before
deciding whether a partnership exists.
Art. 1771.
A partnership may be constituted
in any form,
except where immovable
property or real rights are contributed
thereto,
in which case a public instrument
shall be necessary .Form of
partnership
contract
General rule
No special form required for validity or
existence of the contract of
partnership.
Contract maybe made orally or in writing
regardless of the
value of
the contributions.
Where immovable
property or real
rights
are
contributed
Execution of public instrument necessary
for validity of contract of partnership. To
affect 3
rd
persons, the tr
ansfer of real
property to the
partnership must be duly
registered in the
Registry of Property.
When partnership agreement covered by
the
Statute of
Frauds
An agreement to enter in a partnership at a
future time, which by its terms is not to be
performed
w/in a year from the making
thereof is covered by the Statute of Frauds.
Such
agreement is unenforceable unless it
is in
writing or at least evidenced by some
note
or memorandum.
Partnership implied from conduct
Binding effect
Existence of partnership m
ay be implied
from the acts or conduct of the parties, as
well as from other declarations, and such
implied contract would be as binding as
a
written and express contract.
Ascertainment of intention of parties
In determining whether a particular
transact
ion constitutes a partnership, as
between the parties, the intention as
disclosed by the entire transaction, and
as
gathered from the facts and from the
language employed by the parties as well
as
their conduct, should be ascertained.
Conflict between int
ention and terms
of
contract
If the parties intend
a general partnership,
they are general partners although their
purpose is
to avoid the creation of such a
relation.
Art. 1772.
Every
contract of partnership
having a capital of three thousand pesos or
more, in money or property, shall appear in
a
public
instrument,
which
must
be
recorded in the Office of the Securities and
Exchange Commission. Failure to comply
with
the requireme
nts of the preceding
paragraph shall not affect the liability of
the
partnership and the members thereof to
third persons. Registration
of partnership
Partnership with capital of P3
, 000 or more
Requirements:
1.
The contract must appear in a public
instrumen
t;
2.
It must be recorded or registered w/
the
SEC. However, failure to comply w/
the
above
requirements
does
not
prevent
the
formation
of
the
partnership or affect its liability and
that of the partners to 3
rd
persons. But
any partner is granted the
right by
law
to compel each other to execute the
contract in a public instrument.
Purpose of registration
Registration is necessary as a condition for
the issuance of licenses to engage in
business and trade. In this way, the tax
liabilities of big partnerships ca
nnot be
evaded and the public
can determine more
Law on Business Organizations Reviewer
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accurately their membership and
capital
before dealing with them.
When partnership considered registered
The objective of the law is
to make the
recorded instrument open to all and to give
notice thereof t
interested parties. This
objective is achieved from the date the
partnership papers are presented to and
left for record in the Commission. This is the
effective
date
of
registration.
If
the
certificate of recording is issued on a
subsequent date, its ef
fectively retroacts to
date
of
presentation.
Art. 1773.
A contract of partnership is void,
whenever
immovable
property
is
contributed thereto, if an inventory of said
property is not made, signed by the parties,
and attached to the public instrument.
Part
nership with
contribution of immovable
property
Where immovable property contributed,
failure to comply w/ the following
requisites will render the partnership
contract void:
1.
The contract must be in a public
instrument;
2.
An
inventory
of
the
property
contri
buted must be made, signed by
the parties, and attached to the public
instrument. Art. 1773 is intended
primarily to protect 3
rd
persons. W/
regard to 3rdpersons, a de facto
partnership or partnership by estoppel
may exist. There is nothing to prevent
the
court
from
considering
the
partnership agreement an ordinary
contract from which the parties’
rights
and obligations to each other may
be
inferred and enforced.
When
inventory is not required
An inventory is
required only whenever
immovable property is
contributed. If not
contributed or if
personal property, no
inventory required.
Importance of making
inventory of real
property in
apartnership
An
inventory
is
very
important
in
a
partnership to 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 case of liquidation. The
execution
of
a
public
instrument
of
partnership would be useless if there
is no
inventory
of
immovable
property
contributed because w/o its description and
designation, the ins
trument cannot be
subject to inscription in the Registry
of
Property, and the contribution cannot
prejudice 3
rd
persons.
Art. 1774.
Any immovable property or an
interest therein may be acquired in the
partnership name. Title so acquired can be
conveyed only in the partnership name.
Acquisition or conveyance of property
by
partnership
Since partnership has juridical personality of
its
own, it may acquire immovable property
in its own
name. Title so acquired can
be
conveyed only in the partnership name.
Art. 1775.
Associations and societies,
whose
articles are kept secret among the
members, and wherein any one
of the
members may contrac
t in his own
name
with
third persons,
shall have no
juridical
personality, and shall be governed by the
provisions relating
to co
-
ownership. Secret
partnerships without juridical personality
Partnership relation is created only by the
voluntary agreement
of the partners. It is
essential that the partners are fully
informed not only
of the agreement but of
all
matters affecting the partnership. Secret
partnerships
are
not
by
nature
partnerships. Secret partnerships shall be
governed by the provisions relati
ng to
co
-
ownership.
Importance of giving publicity to articles
of
partnership
It is essential that the arts of
partnership be
given publicity for the protection not only
of
the members themselves but also 3
rd
persons from fraud and deceit. A member
who tr
ansacts business for the secret
partnership in his own name
becomes
personally bound to 3
rd
persons unaware of
the
existence
of
such
association.
Partnership
liability
may
still
result,
however, in cases of estoppel.
Art. 1776.
As to its object, a partner
ship is
either universal or particular. As regards the
liability of the partners, a partnership may
be general or limited. Classifications of
partnership
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As to extent of its subject matter
1.
Universal partnership. (Art. 1777)
a.
Universal partnership of all
present
property. (Art. 1778)
b.
Universal partnership of profits.
(Art.
1780)
2.
Particular partnership. (Art. 1783)
As to liability of the partners
General partnership: one consisting of
general partners who are liable
pro rata
and
subs
idiary and sometimes s
olidarily
w/ their
separate property for partnership debts.
Limited partnership:
one formed by two or
more persons having as members one or
more general partners and one or more
limited partners, the latter not being
personally liable for the obligations
of the
partnership.
As to duration
Partnership at will
: one in w/c no time is
specified and is not formed for a particular
undertaking or venture and w/c may be
terminated at any time by mutual
agreement of
the partners, or by the will of
any one partner
alone; or one for a fixed
term or particular undertaking w/c is
continued after the end of the term or
undertaking w/o
express agreement.
Partnership with a fixed term
: one w/c the
term for w/c the partnership is to exist is
fixed or agreed upon or one for
med for
a
particular undertaking.
As to the legality
of its existence
De jure partnership
: one w/c has
complied
w/
all
the
legal
requirements
for
its
establishment.
De facto partnership
: one w/c has failed to
comply w/ all the legal requirements for its
e
stablishment.
As to representation to others
Ordinary or real partnership
: one w/c
actually exists among the partners and also
as to 3
rd
persons.
Ostensible partnership or partnership or
partnership by estoppel
: one w/c in reality
is
not a partnership,
but is
considered a
partnership only in relation to those who,
by their conduct or admission, are
precluded to deny or disprove its existence.
As to publicity
Secret partnership: one wherein the
existence of
certain persons as partners is
not
avowed or
made known to the public by
any of the partners.
Open or notorious partnership: one whose
existence is avowed or made known to the
public by the members of the firm.
As to purpose
Commercial or trading partnership: one
formed or
the transaction of
busine
ss.
Professional or non
-
trading partnership:
one formed for the exercise of a
profession.
Kinds of partners
Under the Civil Code
1.
Capitalist partner: one who contributes
money or property to the common
fund.
2.
Industrial partner: one who contributes
only
his industry or personal service.
3.
General partner: one whose liability to
3
rd
persons extends to his separate
property.
4.
Limited partner: one whose liability to
3
rd
persons is limited to his capital
contribution.
5.
Managing partner: one who manages
the entit
y
.
6.
Liquidating partner: one who takes
charge of the winding up of partnership
affairs upon dissolution.
7.
Partner by estoppel: one who is not
really a partner but is liable as a partner
for the protection of innocent 3rd
persons. He is one represented as bei
ng
a partner but who is not
so between
the partners themselves.
8.
Continuing partner: one who continues
the business of a partnership after it
has been dissolved by reason of the
admission of a
new partner, or the
retirement, death or expulsion of
one
or mor
e partners.
9.
Surviving partner: one who remains
after a partnership has been dissolved
by the death of
any partner.
10.
Subpartner: one who, not being
a
member of
the partnership, contracts
w/ a partner w/reference to the latter’s
share in
the partnership.
Other classifications
1.
Ostensible partner: one who takes
active part and known to the public as a
partner.
2.
Secret partner: one who takes active
part in the business but is not known to
be a partner by outside parties nor held
Law on Business Organizations Reviewer
8
out as a partner by the other
partners.
He is an actual partner.
3.
Silent partner: one who does not take
any active part in the business although
he may be known to be a partner.
4.
Dormant partner: one who does not
take active part in the business and is
not known or held out as a partner.
He
would be both a silent and a secret
partner.
5.
Original partner: one who is a member
of the partnership from the time of its
organization.
6.
Incoming partner: a person lately, or
about to be, taken into an existing
partnership as a member.
7.
Retiring partner
: one withdrawn from
the partnership; a withdrawing partner.
Art. 1777. A universal partnership may
refer to all the present property or to
all
the profits.
Art. 1778.
A partnership of all present
property
is that in which the partners
contribute all the
property which actually
belongs to them to a common fund, with
the intention of dividing the same among
themselves, as well as
all the prof
its they
may acquire therewith.
Art. 1779.
In a universal partnership of all
present property, the property which
be
longs to each of the partners at the time
of the constitution of the partnership
becomes the common property of all the
partners,
as well as all the
profits which
they may acquire there with. A stipulation
for the common
enjoyment of any other
profits may
also be made; but the property
which
the
partners
may
acquire
subsequently by inheritance,
legacy or
donation cannot be included in such
stipulation,
except the fruits thereof.
Universal partnership of all present
property explained
A universal partnershi
p of profits is one
w/c
comprises all that the partners may
acquire
by their industry or work during the
existence of the
partnership and the
usufruct of
movable or immovable property
w/c each of the partners may possess at the
time of the celebration of t
he contract.
In
this kind of partnership, the following
become the common property of all the
partners:
Property w/c belonged to each of them at
the time of the constitution of the
partnership;
Profits w/c they may acquire from
the
property contributed.
Contribution of future property
General rule: future properties cannot be
contributed. The very essence of the
contract of
partnership that the properties
contributed be included in the partnership
requires
the
contribution
of
things
determinate. The posit
ion of a partner is
like that of a donor, and donations
cannot
comprehend future property. Thus,
property
subsequently
acquired
by
1.inheritance; 2. Legacy; or 3. Donation
cannot be included by stipulation except
the fruits thereof. Hence, any stipulation
including property so acquired is void.
Profits from other sources (not from
properties
contributed)
will
become
common property only is there’s a
stipulation.
Art. 1780.
A universal partnership of profits
comprises all that the partners may acquire
by
th
eir
industry
or
work
during
the
existence of the partnership. Movable
or immovable property which each of
the
partners may possess at the time of the
celebration of the
contract shall continue to
pertain exclusively to each, only the
usufr
uct passing to th
e partnership.
Universal partnership of profits explained
A universal partnership of profits is one
w/c
comprises all that the partners may acquire
by
their industry or work during the
existence of the
partnership and the
usufruct of
movable or immovable
property
w/c each of the partners may possess at the
time of the celebration of the contract.
Ownership of present and future property
The partners retain their ownership over
their present and future property. What
passes to the partnership are the
profits or
income and the use or usufruct of the same.
Consequently,
upon
dissolution,
such
property is returned to the partners who
own it.
Profits acquired through
chance
Since the law only speaks of profits w/c
the
partners may acquire by their industr
y
or work, profits acquired purely by chance
are not included.