Professional Documents
Culture Documents
(d) As interest on a loan, though the amount of (3) The power to administer property, or any other
payment vary with the profits of the business; power which has for its object an act appearing or
which should appear in a public document, or should
(e) As the consideration for the sale of a goodwill prejudice a third person;
of a business or other property by installments or
otherwise. (4) The cession of actions or rights proceeding from an
act appearing in a public document.
PROOF NEEDED TO ESTABLISH A PARTNERSHIP
All other contracts where the amount involved exceeds
No definite criterion can be set up except that all five hundred pesos must appear in writing, even a
the characteristics of the contract must be proved private one. But sales of goods, chattels or things in
as being present. action are governed by articles, 1403, No. 2 and
1405.)
Article 1770.
(Article 1403. The following contracts are
A partnership must have a lawful object or purpose, unenforceable, unless they are ratified:
and must be established for the common benefit or
interest of the partners. (1) Those entered into in the name of another person
by one who has been given no authority or legal
When an unlawful partnership is dissolved by a judicial representation, or who has acted beyond his powers;
decree, the profits shall be confiscated in favor of the
State, without prejudice to the provisions of the Penal (2) Those that do not comply with the Statute of
Code governing the confiscation of the instruments and Frauds as set forth in this number. In the following
effects of a crime. cases an agreement hereafter made shall be
unenforceable by action, unless the same, or some
Unlawful object- void ab initio note or memorandum, thereof, be in writing, and
subscribed by the party charged, or by his agent;
Article 1771. evidence, therefore, of the agreement cannot be
received without the writing, or a secondary evidence
A partnership may be constituted in any form, except of its contents:
where immovable property or real rights are
contributed thereto, in which case a public instrument (a) An agreement that by its terms is not to be
shall be necessary. performed within a year from the making thereof;
(Article 1357. If the law requires a document or other (b) A special promise to answer for the debt, default,
special form, as in the acts and contracts enumerated or miscarriage of another;
in the following article, the contracting parties may
compel each other to observe that form, once the (c) An agreement made in consideration of marriage,
contract has been perfected. This right may be other than a mutual promise to marry;
exercised simultaneously with the action upon the
contract. (d) An agreement for the sale of goods, chattels or
things in action, at a price not less than five hundred
Article 1358. The following must appear in a public pesos, unless the buyer accept and receive part of
document: such goods and chattels, or the evidences, or some of
them, of such things in action or pay at the time some
part of the purchase money; but when a sale is made The transfer of the land to the partnership must be
by auction and entry is made by the auctioneer in his duly recoded in the Registry of Property to make the
sales book, at the time of the sale, of the amount and transfer effective insofar as the third person is
kind of property sold, terms of sale, price, names of concerned.
the purchasers and person on whose account the sale
is made, it is a sufficient memorandum; Article 1774.
(e) An agreement for the leasing for a longer period Any immovable property or an interest therein may be
than one year, or for the sale of real property or of an acquired in the partnership name. Title so acquired can
interest therein; be conveyed only in the partnership name.
( f ) A representation as to the credit of a third person. SAME CAN APPLY ALSO TO PERSONALTY.
(3) Those where both parties are incapable of giving ALIENS CANNOT OWN LANDS, WHETHER PUBLIC OR
consent to a contract. PRIVATE, EXCEPT THROUGH HEREDITAY
SUCCESSION.
Article 1405. Contracts infringing the Statute of
Frauds, referred to in No. 2 of article 1403, are ratified LIMITATION IN ACQUISITION:
by the failure to object to the presentation of oral A partnership cannot:
evidence to prove the same, or by the acceptance of 1. acquire, lease or hold public agriculutural lands
benefit under them.) in excess of 1024 hectares
2. lease public lands adapted for grazing in excess
Article 1772. of 2000 hectares
1. there must be a public instrument regarding A partnership of all present property is that in which
the partnership the partners contribute all the property which actually
2. the inventory of the realty must be made, belongs to them to a common fund, with the intention
signed by the parties, and attached to the of dividing the same among themselves, as well as all
public instrument the profits which they may acquire therewith.
Article 1779.
that generally future property cannot be
In a universal partnership of all present property, the donated
property which belonged to each of the partners at the
time of the constitution of the partnership, becomes Article 1781.
the common property of all the partners, as well as all
the profits which they may acquire therewith. Articles of universal partnership, entered into without
specification of its nature, only constitute a universal
A stipulation for the common enjoyment of any other partnership of profits.
profits may also be made; but the property which the
partners may acquire subsequently by inheritance, Article 1782.
legacy, or donation cannot be included in such
stipulation, except the fruits thereof. Persons who are prohibited from giving each other any
donation or advantage cannot enter into universal
Article 1780. partnership.
A universal partnership of profits comprises all that the PERSONS WHO TOGETHER CANNOT FORM A
partners may acquire by their industry or work during PARTNERSHIP
the existence of the partnership.
1. husband and wife (spouses however can enter
Movable or immovable property which each of the into particular partnership and be members
partners may possess at the time of the celebration of therof)
the contract shall continue to pertain exclusively to 2. those guilty of the crime of concubinage and
each, only the usufruct passing to the partnership. adultery
3. those guilty of the same criminal offense, if the
DISTINCTION BEWEEN THE TWO KINDS OF partnership was entered into in consideration
UNIVERSAL PARTNERSHIP of the same
ALL PROFITS ALL PRESENT PROPERTY A partnership violating this article is null and void. No
legal personality is acquired.
Only the usufruct of the All the property actually
properties of the partners belonging to the partners Article 1783.
becomes COMMON are CONTRIBUTED – and
PROPERTY (owned by said properties become A particular partnership has for its object determinate
them and the COMMON PROPERTY things, their use or fruits, or a specific undertaking, or
partnership); naked (owned by all the the exercise of a profession or vocation.
ownership is retained by partners and by the
each of the partners partnership OBJECTOF PARTICULAR PARTNERSHIP
All profits acquired by the As a rule aside from the
industry or work of the contributed properties 1. determinate things
partners become common only the profits of said 2. their use or fruits
property (regardless of contributed COMMON 3. specific undertaking
whether or not said profits PROPERTY (not other 4. exercise of profession or vocation
were obtained through profits)
the usufruct contributed) CHAPTER 2
OBLIGATIONS OF THE PARTNERS
REASONS WHY FUTURE PROPERTIES CANNOTBE
SECTION 1
MADE:
OBLIGATIONS OF THE PARTNERS AMONG
THEMSELVES
1. contracts regarding successional rights cannot
be made
2. a partnership demands that the contributed
SOME OBLIGATIONS OF A PARTNER
things be determinate, known and certain
1. to give his contribution
3. universal partnership of all present properties
2. not to convert firm money or property for his
really implies a donation, and it is well known
own use
3. not to engage in unfair competition with his
own firm 3 IMPORTANT DUTIES OF A PARTNER
4. to account for and hold as trustee 1. to contribute what he had promised
unauthorized personal profits 2. to warrant against eviction
5. pay for damages caused by his fault 3. to deliver the fruits of what should have been
6. duty to credit to the firm payment made by a delivered
debtor who owes him and the firm
7. to share with the other partners the share of THERE IS EVICTION WHENEVER by final judgement
the partnership credit which he has received based on a right prior to the sale or an act imputable
from and insolvent debtor to the partner, the partnership is deprived of the whole
or the part of the thing purchased
SOME RIGHTS OF A PARTNER
1. property rights
a. rights in specific partnership property Article 1787.
b. interest in the partnership
c. right to participate in the management When the capital or a part thereof which a partner is
2. right to associate with another person in his bound to contribute consists of goods, their appraisal
share must be made in the manner prescribed in the contract
3. right to inspect and copy partnership books of partnership, and in the absence of stipulation, it
4. right to command formal account shall be made by experts chosen by the partners, and
5. right to ask for the dissolution of the firm at according to current prices, the subsequent changes
the proper time thereof being for account of the partnership.
A partnership begins from the moment of the A partner who has undertaken to contribute a sum of
execution of the contract, unless it is otherwise money and fails to do so becomes a debtor for the
stipulated. interest and damages from the time he should have
complied with his obligation.
Article 1785.
The same rule applies to any amount he may have
When a partnership for a fixed term or particular taken from the partnership coffers, and his liability
undertaking is continued after the termination of such shall begin from the time he converted the amount to
term or particular undertaking without any express his own use.
agreement, the rights and duties of the partners
remain the same as they were at such termination, so Article 1789.
far as is consistent with a partnership at will.
An industrial partner cannot engage in business for
A continuation of the business by the partners or such himself, unless the partnership expressly permits him
of them as habitually acted therein during the term, to do so; and if he should do so, the capitalist partners
without any settlement or liquidation of the partnership may either exclude him from the firm or avail
affairs, is prima facie evidence of a continuation of the themselves of the benefits which he may have
partnership. obtained in violation of this provision, with a right to
Article 1786. damages in either case.