Questions on XBLR:
One student:
Recalling on lessons last week
* what do you mean by separate juridical
personality
:enables it to act as though it were a person
-An individual or legal entity recognized under
law as having legal rights and obligations.
Corporations, and partnerships are examples of
legal entities that are recognized as persons
under the law.
(Ang juridical personality ng korporasyon ay
nagbibigay-daan dito na kumilos na parang ito
ay isang tao. Bilang isang artipisyal na nilalang,
maaari itong magkaroon ng mga ari-arian,
makipag transaksyon at gumawa ng mga kilos
na hayagang pinahintulutan ng batas o hindi
sinasadya sa pagkakaroon nito)
-4
The partner
The partnership
The third person
: Relations created by a contract of partnership
1. Relations among the partners
themselves:
2. Relations of partners with the
partnership:
3. Relations of the partnership with third
person with whom the partnership
contracts:
4. Relations of partners with such third
persons
Remember: A partnership has a separate
personality distinct from the partners.
* Article 1784
- Discuss the provision
* Article 1785
-discuss the provision
Why do you think that it is
*Diferrence between partnership at will and
Partnership with a fixed terms in terms of
dissolution?
:FIXED TERM PARTNERSHIP is formed for a
definite period of time. The partnership comes to
an end on a date specified in the partnership
deed unless express mention in the contract to
the contrary. If the business is continued beyond
such expiry period, the partnership is deemed as
a partnership AT WILL.
*After the dissolution, are they prohibited to
execute another article of partnership to a
partnership with a fixed term because of article
1785
What is Delay?
Delay or default is the non fulfillment of an
obligation with respect to time. It is when
someone does not fulfill an obligation within the
time given unto him.
* Read article 1786
- recall what do you mean by debtor and creditor
on obligations and contract
Payment is the fulfillment of a financial
obligation. A person who is subject to such an
obligation is known as a debtor, and the person
who is owed the obligation is known as a
creditor.
- would you remember the active subject and
passive subject?
Passive subject (called debtor or obligor) – the
person who is bound to the fulfillment of the
obligation; he was a duty.
b. Active subject (called creditor or obligee) –
the person who is entitled to demand the
fulfillment of the obligation; he who has a right.
*Article 1787
*Article 1788
Another student
*read article 1789
*Distinction between capitalist and industrial
partner
CHAPTER 2
Obligations of the Partners
SECTION 1
Obligations of the Partners Among
Themselves
“Obligation of the partners is to contribute
MONEY,PROPERTY or INDUSTRY”
Relations created by a contract of
partnership
5. Relations among the partners
themselves:
6. Relations of partners with the
partnership:
7. Relations of the partnership with
third person with whom the
partnership contracts:
8. Relations of partners with such third
persons
Remember: A partnership has a separate
personality distinct from the partners.
COMMENCEMENT OF PARTNERSHIP:
● A partnership is consensual contract
● It exists from the moment of the
celebration of the contract by the
partners.
Just the moment there is a consent among the
partners to create a partnership then the
partnership already commences.
Power/right of a partner to terminate
partnership
● Anyone of the partners can dictate a
dissolution of the partnership at will,
PROVIDED THAT he acts in GOOD
FAITH.Dissolution must not be made
at an improper or unreasonable time:
● If such partner who wants to dissolve
the partnership acts in BAD FAITH,
partnership shall still be dissolved but
he or she shall be liable for damages.
● There is no such thing as an
indissoluble partnership.
Article 1784. A partnership begins from the
moment of the execution of the contract,
unless it is otherwise stipulated. (1679)
A partnership is a consensual contract ; hence
it exists from the moment of the celebration
of the contract of the partners.
Kapag sinabing consensual contract,
partnership can form by mere consent as long
as all the necessary requisites are present in
the contract of partnership.
I-relate natin sa relationship ng opposite sex.
Nanligaw Si Daniel kay Kathryn. By saying
yes sa proposal ni Daniel, officially dating na
ang dalawa. By mere consent ni Kathryn,
may relationship na nabuo. Pero ang tanong,
present ba ang necessary requisites? Ano ba
ang requisites when you're dating? First of
all, dapat they love each other. Relationships
won't work without love. And so on and so
forth.
But the question is, kailan ang start ng dating
nila? From the moment ba na nanligaw si
Daniel or from the moment na sinagot siya ni
Kathryn? 0f course, from the moment na
nagbigay si Kathryn ng consent.
EXECUTORY AGREEMENT OF
PARTNERSHIP
FUTURE PARTNERSHIP - The partners
may stipulate some other date for the
commencement of the partnership.
Based sa previous sample, nagbigay ng
consent si Kathryn but after niya mag aral.
Hence, what was created was future
partnership. Hindi pa totally dating si Daniel
at Kathryn from the time na nagbigay si
Kathryn ng consent niya. After Kathryn’s
study, automatic na ba na dating ang dalawa?
YES
AGREEMENT TO CREATE
PARTNERSHIP - A distinction must be
made between a partnership actually
consummated and an agreement to enter into
a contract of partnership at the future time.
So long as the agreement remains
executory,no partnership can said to exist.
For example,sinabi ni Daniel na may gusto
siya kay Kathryn at liligawan niya ito in the
future kapag may maipagmamalaki na
siya.Kathryn then agreed to Daniel. Because
they love each other, willing si Kathryn na
hintayin si Daniel. May partnership ba na
nabuo? NONE . What created was an
agreement to CREATE PARTNERSHIP.
JUST SOME REMINDERS:
Yes, it’s true that a partnership may form by
mere consent . Pero lagi nating tandaan ang
GENERAL RULES. (
PARTNERSHIP IS A CONTRACT. And sa
contract, kapag more than one year ang
execution ng contract, it must be in writing.
Otherwise the contract is unenforceable.
Another, kapag immovable property ang
involve sa partnership the contract must also
in writing.
Article 1785. When a partnership for a fix
term or particular undertaking is continued
after the termination of such term or
particular undertaking without any express
agreement, the rights and duties of the
partners remain the same as they were at
such termination, so far as is consistent with a
partnership at will.
A continuation of the business by the
partners or such of them as habitually acted
therein during the term, without any
settlement or liquidation of the partnership
affairs , is prima facie evidence of
continuation of the partnership.
PARTNERSHIP WITH A FIXED TERM is
one in which the term of existence has been
agreed upon expressly (as when there is a
definite period) or impliedly ( as when a
particular enterprise or transaction is
undertaken). The expiration of the term thus
fixed the accomplishment of the particular
undertaking specified will cause the
automatic dissolution of the partnership.
For example, because of the Panagbenga
Festival,Kathryn and Daniel formed a
partnership engaging in selling souvenirs in
front of Burnham Park. They both agreed
that the partnership will exist only during the
said festival. The profit will be divided
equally among themselves.
Ang partnership na na-form sa above sample
is partnership with a fixed term. After the
festival,automatic dissolve na nag
partnership.
Pero what if after the festival, patuloy pa rin
silang dinadagsa ng mga turista and without
express agreement, tinuloy nila ang
partnership? Therefore, dissolved na ang
partnership with a fixed term and a
partnership at will is created. In case , the
rights and duties of the partners remain the
same but on;y as it is consistent with a
partnership will.
Partnership will is a partnership that can be
dissolved by will of either of the partners.
Kapag hindi indicated ang duration of
existence ng partnership,generally it is a
partnership at will.
Article 1786. Every partner is a debtor of the
partnership for whatever he may have
promised to contribute thereto.
He shall also be bound for warranty in case of
eviction with regard to specific and
determinate things which he may have
contributed to the partnership, in the same
cases and in the same manner as the vendor is
bound with respect to the vendee. He shall
also be liable for the fruits thereof from the
time they should have been delivered, without
the need of any demand. (1681a)
“ Partner promised to contribute P500,000 to
the business and you agreed to create that
partnership “
What happens if he does not give you what he
has promised to contribute to the
partnership?
-He becomes a debtor of the partnership.
(because law say so, that is ART.1786 )
-He will be liable for DAMAGES. For his
delay in contributing the property or the
money that he promise.
Is there a need for a demand for him to be
considered delayed?
-No need for demand to incur delay.
For example Daniel promised to contribute
land to the Kathniel Partnership. The land is
located near the office premises. Thus,an
ideal location to build a fast food restaurant.
Agreed date of delivery of the land on or
before June 30,2020.
FIRST SCENARIO: If after June 30,2020,
Daniel failed to deliver said land to the
partnership, Daniel automatically becomes a
debtor of the partnership even in the absence
of demand.
Kung matatandaan sa Obligation and
Contract, demand is necessary para maging
bound ang debtor na mag comply sa
obligation. But in this case,bound na agad si
Daniel to comply with his obligation.
SECOND SCENARIO: Daniel complied on
the said date of delivery and the operation
started after two months, brother of Daniel
came and claiming that the land was his and
not of Daniel, Daniel then became liable to the
partnership .
Related naman ito sa LAW ON SALES. We
have two kinds of warranty
-WARRANTY AGAINST HIDDEN
DEFECT and
-WARRANTY AGAINST EVICTION
Kahit wala sa oral or written agreement ang
warranty, implied obligation ng seller in the
above case Daniel is bound for warranty to
the partnership.
THIRD SCENARIO: In the above example,
let’s say Daniel agreed to contribute land and
building to the partnership instead of land
only. On June 20,2020, the building was on
fire. Because of the fire, the building can no
longer be used by the partnership.
Based on the above scenario,Daniel has the
obligation to preserve the land and building
with the diligence of a good father of afamily
pending delivery. Related ito sa obligations
and contracts. Law will be quite interesting
kung na-apply niyo siya for every situation at
napagdutong-dugtong.
Back to the topic, Daniel will then indemnify
the partnership damages. Dahil hindi na
magagamit ang building dahil sa sunog,
pwedeng si Daniel ang sumagot sa renovation
ng place.
Failure to comply the partner of said
contribution does not necessarily results to a
recession or cancellation of the partnership
but an action for specific performance with
damages and interest.
JUST SOME REMINDER:
Always read carefully the articles and take
note also that the above article only talks
about SPECIFIC and DETERMINATE
things. Maiiba ang approach kapag generic
things ang usapan.
Article 1787. When the capital or a part
thereof which a partner is bound to
contribute consists of goods, their appraisal
must be made in the manner prescribed in
the contract of partnership, and in the
absence of stipulation, it shall be made by
experts chosen by the partners, and
according to current prices, the subsequent
changes thereof being for account of the
partnership. (n)
Suppose Kathryn contributed Land worth
5m while Daniel contributed delivery truck
worth 3M to their partnership. After a year,
the value of the land appraised to 5.5M while
the delivery truck depreciated by 100K.
Question, who will shoulder the gain and loss
of the land and delivery truck? Obviously it is
the partnership.Pero what if the above
sample ,they form a UNIVERSAL
PARTNERSHIP OF GAINS ? In that case,
their properties belong to the partners. The
gain and loss will account by the partners.
Kahit mawala pa ang delivery truck ni
Daniel,yung loss niya solely.
*TIPS: Try using an accountant point of
view. Ang lagi nating ina-account is yung
business. Kung particular partnership, upon
delivery of the contributions of the partners,
may entry na tayo. Debit Asset Credit
Capital. Kaya any depreciation or
appreciation,same book ang record. Pero
kung universal partnership gains,walang
assets tayong i record since only usufruct lang
contributed sa partnership. Therefore, wala
tayong ide-depreciate. Wala ring
appreciation.
Article 1788. A partner who has undertaken
to contribute a sum of money and fails to do
so becomes a debtor for the interest and
damages from the time he should have
complied with his obligation. The same rule
applies to any amount he may have taken
from the partnership coffers, and his liability
shall begin from the time he converted the
amount to his own use. (1682)
Continuation to the example in Article 1786
: He is also liable to pay interest.
Question:
How much interest will be?
-That was agreed by the parties.
- If there is no agreement then follow the 12%
per annum.
As a agreed partner you can now file an
action against this friend of yours who failed
to contribute that which he promise.
“ File an action to collect the money that he
promised to contribute”.
FILE AN ACTION FOR SPECIFIC
PERFORMANCE.
What if the partner try to contribute his
services /INDUSTRY but when the
partnership now starting the business he
didn’t contribute any skills or service.
Can you compel him to contribute the service
that he promised?
-NO
Why can you not compel him to perform the
service that he has promised to contribute to
the partnership?
- The reason is your constitution prohibits
involuntary servitude such that if you force
him if you compel him to render service and
it is against his will that is already a violation
against the prohibition of involuntary
servitude.
So what if he will not render the service that
he promised to the partnership , CAN YOU
ASK ANOTHER PERSON TO PERFORM
THE SERVICES THAT HE PROMISED?
-NO, because you may have other partners
and those other partners may not trust the
replacement.
BASIC PRINCIPLE IN PARTNERSHIP
: TRUST and CONFIDENCE
In view of this article, wala siyang pinagkaiba
sa obligations and contract, The partner will
become the debtor of the partnership from
the moment the partner fails to contribute the
undertaken contribution to the partnership.
On the first paragraph, let's say Kathryn
and Daniel formed a partnership para mag-
operate ng xerox/photocopy service in front
of school. Kathryn and Daniel agreed to
contribute 100k each on or before May
26,2020. On May 25,2020 nag comply si
Kathryn sa agreed amount na 100k. On the
same day, may customer na sila na estimated
ng 10k ang income nila with that customer.
But because Daniel did not yet contribute the
agreed amount,they lost their client on that
day. On May 27,2020may another client sila
which estimated 30k ang estimated income ng
partnership. But the partnership again lost
the customer because Daniel still not yet
complied with his contribution. Daniel
contributed the agreed amount on May
31,2020.
Isa-isahin natin. On May 26,2020 naging
debtor na si Daniel sa partnership. Daniel is
also liable on the amount lost on May 27,2020
amounting to 30k. Hindi maka operate ang
partnership dahil sa failure ni Daniel sa
contribution niya sa partnership.
On the second paragraph ,let's say nag start
ang operation ng partnership nila Kathryn
and Daniel on June 01,2020,On June 30,2020
nanguha si Daniel sa partnership offers to
buy ng pang maintenance sa photocopier
machine amounting 50k. While on his way,
may tumawag kay Daniel ay may emergency
sa family nial. Daniel then used the money for
his family.
On the above sample,Daniel becomes the
debtor of the partnership. He converted the
amount for his own use.
Article 1789. An industrial partner cannot
engage in business for himself, unless the
partnership expressly permits him to do so;
and if he should do so, the capitalist partners
may either exclude him from the firm or avail
themselves of the benefits which he may have
obtained in violation of this provision, with a
right to damages in either case. (n)
For example ,Karina and Aljon formed a
partnership partner while Aljon is capitalist .
Karina’s shift ends at 5 in the afternoon.
In the above sample pwede pa bang mag
engage si Karina na mag music tutorial after
5 pm as part time niya?
The answer is NO. If that's the case ,Aljon
can exclude him from the firm with a right to
damage OR avail for the benefit which he
may have obtained with a right to damage.
Pero what if instead na music tutorial ,Karina
engaged to Math tutorial? Wala pa rin
pinagkaiba. Aljon has the same right as
stated in the above sample.Always
remember ,the partnership has the exclusive
right to her industry. Industrial partner is
also prohibited from engaging in business to
any kind unless the partnership has expressly
permitted her to do so.
Pagbaliktarin naman natin. What if si Aljon
nag invest as a Capitalist partner sa ibang
music tutorial ? If that's the case, Karina has
the same right. Same may also exclude Aljon
from the firm with the right to damages OR
avail herself of the benefits which she may
have obtained in violation of the provision
right to damage.
Another , What if Aljon invest as capitalist
partner sa isang cosmetic business? If that's
the case ,Aljon does not violate the
partnership with Karina.Capitalist partners
are prohibited from engaging similar
businesses only.
Article 1790. Unless there is a stipulation to
the contrary, the partners shall contribute
equal shares to the capital of the partnership.
(n)
The above provision is self explanatory. Kung
wala sila agreement of their capital
contribution ,meaning,equal ang contribution
nila.
Article 1791. If there is no agreement to the
contrary, in case of an imminent loss of the
business of the partnership, any partner who
refuses to contribute an additional share to
the capital, except an industrial partner, to
save the venture, shall he obliged to sell his
interest to the other partners. (n)
Ano ba ang ibig sabihin kapag sinabing
imminent loss? Pa bankrupt na yung
business. Parang malapit na magsara dahil sa
lugi.
In case of imminent loss of the partnership,
hindi mandatory kay industrial partner to
contribute additional share. Simply because ,
they already give the 100% of their industry.
Sa case naman ni Capitalist partner , meron
natural obligation sila na mag contribute ng
additional shares to save the business.
UNLESS CAPITALIST PARTNER IS
INSOLVENT OR MAY AGREEMENT.
If the solvent Capitalist refuses to
contribute .then they must sell their interest
to the other partners na willing.
Article 1792. If a partner authorized to
manage collects a demandable sum which was
owed to him in his own name, from a person
who owed the partnership another sum also
demandable, the sum thus collected shall be
applied to the two credits in proportion to
their amounts, even though he may have
given a receipt for his own credit only; but
should he have given it for the account of the
partnership credit, the amount shall be fully
applied to the latter.
The provision for this article are understood
to be without prejudice to the right granted to
the debtor by ARTICLE 1252 (He who has
various debts of the same kind in favor of one
and the same creditor, may declare at the
time of making the payment, to which of
them the same must be applied.) ,but only if
the personal credit of the partner should be
more onerous to him.(1684)
In the above case,pwedeng yung taong may
utang is parehas na may utang sa partnership
at sa partner.For example, Si Nadine may
utang sa Kathniel partnership at kay
Kathryn amounting to 10,000 and 5,000
respectively. Kung nagbayad si Nadine
amounting to 12,000.00 at niresibuhan sa
pangalang Kathryn for payment para sa
utang niya rito , only 4,000 ang maa-apply sa
credit niya. The rest is a partnership
Pero kung ang 12,000.00 payment ni Nadine
is for the account of Kathniel ,the full amount
will be fully applied to the latter.
Nakikita niyo ba ang essence ng partnership?
Parang nag enter ka lang sa isang
relationship yan .Hindi mo pwedeng unahin
ang sarili mo . Once na may natnggap ka na
para sayo ,para sa inyong dalawa yun . Pero
kung may natanggap siyang para sa
kanya ,kanya lang din yun.
REQUISITES FOR APPLICATION OF
RULE.
The ff. Are the requisites of the application of
the article:
1. There exist at least two debts,one
where the collecting partner is
creditor ,and the other ,where the
partnership is the creditor;
2. Both debts are demandable;and
3. The partner who collects is authorized
to manage and actually manages the
partnership.
Pero sa pangalawang paragraph ng article ,si
Nadine ay may right na i-apply yung
payment niya sa utang niya kay Kathryn
kung yung utang niya kay Kathryn ay mas
mabigat.
For example, Ang utang ni Nadine kay
Kathryn bears 15% per annum while yung
utang niya sa Kathniel bears only 14% per
annum. In this case ,the law allows Nadine to
prefer the payment of Kathryn's credit in
case she so desires.
BASTA LAGING TANDAAN NA DAPAT :
BOTH DEPTS ARE DEMANDABLE.
Article 1793. A partner who has received, in
whole or in part, his share of a partnership
credit, when the other partners have not
collected theirs, shall be obliged, if the debtor
should thereafter become insolvent, to bring
to the partnership capital what he received
even though he may have given receipt for his
share only. (1685a)
For example, si Nadine ay may utang sa
Kathniel partnership amounting to 25,000.00.
Si Kathryn, na-receive na niya ‘yung share
niya amounting to 5,000.00 ahead of Daniel.
When Daniel collects his share, Nadine was
already insolvent. In the above case, Kathryn
is required to share the 5,000.00 with Daniel.
Kahit na si Kathryn is given a receipt for her
share only.
Requisites for application of rule. The
requisites for the application of this article
are as follows:
1. A partner has received, in whole or in
part, his share of the partnership
credit;
2. The other partners have not collected
their shares; and
3. The partnership debtor has become
insolvent.
All the three requisites must be present in
order to apply the above article. Another
sample, try natin i-combine sa previous
article. Si Nadine may utang sa Kathniel
partnership and at the same time, sa
partners. Nadine’s credits are as follows:
Kathniel - 50,000.00 with interest of 2% per
annum; Kathryn - 5,000.00 with interest of
6% per annum: Daniel - 10,000.00 with
interest of 5% per annum. All debts are
demandable. Kathryn as managing partner,
collected the
total sum of 30,000.00 from Nadine. Since and
utang ni Nadine kay Kathryn ay onerous,
Nadine choose to apply the whole 5,000.00 to
Kathryn’s account and the rest is to the
partnership. After a week, when Daniel
collecting fromNadine, the latter was already
insolvent.
Article 1794. Every partner is responsible to
the partnership for damages suffered by it
through his fault, and he cannot compensate
them with the profits and benefits which he
may have earned for the partnership by his
industry. However, the courts may equitably
lessen this responsibility if through the
partner's
extraordinary efforts in other activities of the
partnership, unusual profits have been
realized. (1686a)
Always remember, DAMAGES NOT
GENERALLY SUBJECT TO SET-OFF.
Why do you think so? Because it’s the Law.
Lol.
First of all, ginawa ang partnership to earn
profit at para hindi i-compensate sa damages
caused by the partner. Hindi kayo nagtayo ng
business just to pay sa damages. Hindi ka nag
pumasok sa isang relationship para maka
move on sa ex mo.
But in every rule there’s an exemption. If
unusual profit derived from extraordinary
effort of the partner at fault, the court may
lessen the partner’s responsibility. Take note
of the word lessen. Still hindi ito pwede i-
compensate.
For example, Daniel accidentally caused the
fire in the Kathniel warehouse. Because of
that, ‘yung caterings na clients nila this
coming month, Cancelled. Estimated 500k
ang loss nila including ‘yung naira sa
warehouse at kikitain sana sa catering clients.
Because of what happened, naghanap ng way
si Daniel para kumita ng mas malaki ang
partnership para makabawi ito. He worked
overnight advertising the Kathniel
restaurant. He even used his connection to
network the business. Nag hire rin siya ng
artista to advertise the business. Used the
radio and television. After a week, naging hit
ang business and after a month, agad nabawi
ng partnership ang loss na 500k.
In the above case, Is Daniel’s responsibility
compensated?
Based on comment section:
No, it’s not compensated. The efforts in other
activities that Daniel did to derived unusual
profits to partnership will only lessen the
responsibility, in accordance with ARTICLE
1794. Every partner is responsible to the
partnership for damages suffered by it
through his fault, and he cannot compensate
them with the profits and benefits which he
may have earned for the partnership by his
industry. However, the courts may equitably
lessen this responsibility if through the
partner's
extraordinary efforts in other activities of the
partnership, unusual profits have been
realized. (1686a)
Article 1795. The risk of specific and
determinate things, which are not fungible,
contributed to the partnership so that only
their use and fruits may be for the common
benefit, shall be borne by the partner who
owns them.
If the things contribute are fungible, or
cannot be kept without deteriorating, or if
they were contributed to be sold, the risk
shall be borne by the partnership. In the
absence of stipulation, the risk of the things
brought and appraised in the inventory, shall
also be borne by the partnership, and in such
case the claim shall be limited to the value at
which they were appraised. (1687)
In the above case, and pag determine kung
sino mag borne ng risk is kung sino ang
owner.
For example, pinagamit ni Kathryn ang
customized van niya sa partnership. They
used it as delivery service sa mga nag order
sa kanila online. Since use lang ang
contributed sa partnership, if ever na
masiraan ng gulong or mabangga ang
sasakyan, the risk rest with Kathryn kasi siya
pa rin ang owner even though ginamit sa
partnership. Remember, it applies if the thing
is specific and determinate.
Pero kung ang ownership ay transferred sa
partnership. Of course, the risk will be borne
by the partnership.
Naiiba ang usapan if the thing is FUNGIBLE.
What is fungible by the way? These are the
items that are interchangeable. Things or
goods of which any unit is, from its nature or
by mercantile usage, treated as the equivalent
of any other unit. Sample is rice, wine, etc.
If the thing contributed is Fungible thing,
kahit ‘yung use lang ang contributed, the risk
will be borne by the partnership. Impossible
kasing ma-keep ang isang Fungible thing na
hindi ma-consume or impair. Kunyari bigas.
Fungible thing ang bigas. Anong gagawin nila
sa bigas kung hindi i-consume?
If the thing contributed was intended to be
sold, obviously the ownership will be
transferred to the partnership. Thus, the risk
will be borne by the latter.
Last one, the things brought and appraised in
the inventory. Obviously, the risk will be
borne by the partnership. Pero syempre,
limited
lang sa appraised value. In this case, implied
sale to partnership and mangyayari.
Bali to sum up, lima lang ang tatandaan niyo
sa article na ito:
 1. Specific and Determinate Thing tapos
use lang ang contributed, owner is the
partner, the risk sa partner din.
2. Specific and Determinate Thing tapos
ownership transferred to the
partnership. Obviously, the
partnership borne the risk.
3. Fungible things, the risk will be borne
by the partnership. Kahit na use lang
ang contributed.
4. Things contribute to be sold.
Obviously, the ownership transferred
to the partnership. So as the risk.
5. Things brought and appraised in the
inventory. In this case, there is
implied sale making in the
partnership. Thus, the owner is the
partnership, the risk will be borne
also by the latter.
Article 1796. The partnership shall be
responsible to every partner for the amounts
he may have disbursed on behalf of the
partnership and for the corresponding
interest, from the time the expense are made;
it shall also answer to each partner for the
obligations he may have contracted in good
faith in the interest of the partnership
business, and for risks in consequence of its
management. (1688a)
In the above article, the partner will become
the agent of the partnership. Wala rin siyang
pinagkaiba sa ibang Company. Usually, sa
isang Company, if wala pang fund, ginagamit
ng Manager/Accountant and personal fund
nila or inaabonohan muna nila tapos
pinapa-reimburse na lang nila. Sa Petty Cash
Fund Custodians mandalas nangyayari ‘yan.
Kung sa Partnership naman, for example,
Kathryn is out of Country. Original
agreement, hindi dapat magexceed si
Kathryn sa 200,000 for the purchase of
ingredients para sa
restaurant nila. In short, 200k ang budget
nila. But during the meeting with supplier,
may inalok si supplier na naka-appeal naman
kay Kathryn but hindi siya pasok sa budget.
It
will cost 250k for the deal to be closed. Kung
a-analyze naman ni Kathryn, with the new
deal, may possibility na makaka-akit sila ng
new customers. At the end, inabonohan muna
ni Kathryn ang 50k kaya na-close ngayon ang
deal
Question. If the Kathniel restaurant earned
additional 30k for the month because of the
decision of Kathryn, will Kathryn be entitled
for the reimbursement amounting to 50k if
she make the deal without the Knowledge of
Daniel?
If Kathniel restaurant incurred a loss because
of the decision of Kathryn, will Kathryn be
entitled for the reimbursement amounting to
50k if she make the deal with the consent of
Daniel thru phone call?
Article 1797. The losses and profits shall be
distributed in conformity with the agreement.
If only the share of each partner in the profits
has been agreed upon, the share of each in the
losses shall be in the same proportion.
In the absence of stipulation, the share of
each partner in the profits and losses shall be
in proportion to what he may have
contributed, but the industrial partner shall
not be liable for the losses. As for the profits,
the industrial partner shall receive such share
as may be just and equitable under the
circumstances. If besides his services he has
contributed capital, he shall also receive a
share in the profits in proportion to his
capital. (1689a)

This article talks about sa share ng profits
and losses ng partners. May sinusundan
tayong pagkakasunod sa profit sharing.
1. Profit sharing shall be distributed
according to agreement. Kung walang
agreement sa losses sharing,
gagamitin ‘yung proportion sa profit
sharing.
2. If no agreement, the profit and losses
sharing shall be proportion to the
capital contribution. Basta always
remember na hindi liable si industrial
partner sa losses sharing. Industrial
partner already contributed his/her
industry. Parang ‘yun na ang naging
share niya ng loss. EFFORT. And as
for sa profit sharing, the industrial
partner shall receive a just and
equitable. Kung may capital
contribution pa si industrial partner
bukod sa industry niya, he/she will
also share the profits in proportion to
his capital.
Article 1798. If the partners have agreed to
intrust to a third person the designation of
the share of each one in the profits and losses,
such designation may be impugned only when
it is manifestly inequitable. In no case may a
partner who has begun to execute the
decision of the third person, or who has not
impugned the same within a period of three
months from the time he had
knowledge thereof, complain of such decision.
The designation of losses and profits cannot
be intrusted to one of the partners. (1690)
In the above article, pwedeng walang
agreement as to profit and loss sharing but
mag intrust sila ng third party for the profit-
loss sharing. And ang pag-appoint ng third
person is dapat agreed by all the partners.
Contract cannot be left to the will of one of
the contracting parties alone. Kaya nga siya
tinawag na partnership, dapat lahat ng
decision, galaw mo is alam ng partner mo.
You cannot call it a partner if you decide and
take action alone.
Pero may right ang partners na mag
complain/impugned kung ang designation ng
third party is inequitable. Impugned - to
question the validity. But the complain must
be made within three months. The reason for
the short period of within three months to
impugn the designation to prevent the
paralyzation in the operations of the
partnership.
Article 1799. A stipulation which excludes one
or more partners from any share in the
profits or losses is void. (1691)
The very reason kung bakit nag e-exist ang
partnership is to earn a profit. Kaya kung e-
exclude and one of the partners sa share ng
profit, then the partnership is void. Ang
agreement ang void. Hindi na dapat siya
sinama as partner kung hindi naman pala
siya isasama sa profit sharing. That is the
general rule guise. Then what will happen to
the partners and the partnership? The profits
and losses shall be apportioned as if there is
no stipulation of the same. Ibig sabihin,
continue pa rin ang operation ng partnership.
Pero what if in the agreement, expressly
stipulated na walang magiging liable sa
losses, what will be the status of the
partnership? Since sabi naman sa previous
articles, it is valid na walang agreement sa
losses sharing since ang purpose naman ng
partnership is to earn profits. Is the
partnership valid? The answer is no. Kung
papasok ka sa isang partnership, dapat
willing ka rin mag take ng risk. If expressly
stipulated
that there shall be no liable for losses, or not
intend to share in the losses, no partnership
exists. Guise tandaan na magkaiba ang
expressly and no agreement.
If the case, ‘yung industrial partner ang ini-
exclude sa share ng loss, the agreement is
valid. We already tackled this in the previous
article. Parang ang share na niya sa loss is
yung effort niya. And one thing, hindi niya
pwede i-withdraw ang work or labor niya na
already contributed in the partnership.
Article 1800. The partner who has been
appointed manager in the articles of
partnership may execute all acts of
administration despite the opposition of his
partners, unless he should act in bad faith;
and his power is irrevocable without just or
lawful cause. The vote of the partners
representing the controlling interest shall be
necessary for such revocation of power.
A power granted after the partnership has
been constituted may be revoked at any time.
(1692a)
Sa case ng GPP (General Professional
Partnership), every partner has the equal
voice in the partnership. Pero pwede pa rin
sila mag-appoint ng Managing partner, lalo
na sa malalaking firms.
In Kathniel partnership, since Kathryn is the
managing partner, she has the right on the
administrative related sa business. Ano-ano
nga ba itong administrative role? Ito ‘yung
support sa may business. Like Accounting,
human resource, etc. Basta tandaan na lang
lagi na every act must be in good faith. Dapat
faithful ka sa ka-partner mo.
Pero if umeksena ang may hawak ng
controlling interest sa partnership, pwede
niyang i-revoke ang power ng managing
partner
.
Kunyari palubog na ang Kathniel, one way to
save the partnership is mag benta ang
partners ng kanilang share. Supposed binili
ni Liza ang more than half ng interest ni
Kathryn and Daniel, and the partnership
continues. Since si Kathryn pa rin ang
managing partner, she always manages ang
mga ingredients na ipu-purchase. May mga
dating supplier na si Kathryn bago pa
dumating si Liza. Pero since business minded
talaga si Liza, gusto niya lagi may
nakukuhang malaking discount– para
makamura sila. Cost minimization.
May right ba si Liza na i-revoke ang decision
ni Kathryn sa pag purchase ng ingredients?
In the above sample, appointment ng
managing partner is upon sa formation ng
partnership. Pero what if after the
partnership agreement, Kathniel partnership
pa rin tayo
with Liza as additional partner. After
admitting Liza as additional partner,
ini-appoint din siya as managing partner.
Is the management right revocable at any
time? At any cause?
Is the service of the managing partners, both
Liza and Kathryn, entitled for compensation?
Article 1801. If two or more partners have
been intrusted with the management of the
partnership without specification of their
respective duties, or without a stipulation that
one of them shall not act without the consent
of all the others, each one may separately
execute all acts of administration, but if any
of them should oppose the acts of the others,
the decision of the majority shall prevail. In
case of a tie, the matter shall be decided by
the partners owning the controlling interest.
(1693a)
Supposed sa Kathniel Partnership with Liza
and Enrique as new partner. Liza acquires
15% of interest, 15% kay Enriquez, 35% kay
Kathryn at 35% din kay Daniel.
After admission ni Liza, ini-appoint siya as
managing partner, without specification of
duties. So bali Kathryn and Liza are both
managing partners.
Si Liza, ini-oppose niya ang decision ni
Kathryn sa pag purchase ng ingredients kay
Vendor A. Ang gusto kasi ni Liza kay Vendor
B sila mag purchase since cheaper ang
ingredients. Sa side naman ni Kathryn, ayaw
niya ma-compensate ang quality ng product
nila.
If Enrique and Daniel sided with Liza,
obviously, masusunod si Liza.
What if si Enrique lang ang nag side kay
Liza? We will have a tie. Since kung mag side
si Daniel kay Kathryn, they hold the
controlling interest. Mananalo si Kathryn.
Team Liza-30%; team Kathryn -70%
Pero what if Kathryn appointed as managing
partner. Ang scope ng suties niya includes
‘yung sa purchasing while kay Liza naman is
sa accounting and human resource.
Is Liza has the right na mag disapprove sa
decision ni Kathryn na mag purchase ng
ingredients kay vendor A? Supposed agree si
Enrique at Daniel sa kanya? What if Liza has
51% of interest, Enrique 10%, Kathryn 15%
and Daniel 24%. Kathryn appointed as
managing partner. Ang scope ng duties niya
includes ‘yung sa purchasing while kay Liza
naman is sa accounting and human resource.
May right ba si Liza na i-oppose si Kathryn
supposed nag side si Enrique sa kanya?
May right ba si Liza na i-oppose si Kathryn
supposed walang nag side sa kanya?
Based on comment section:
No, nasa exception siya no.2 in case of tie, the
decision of the managing partners owning the
controlling interest (more than 50%) shall
prevail. Kaya kahit magside si Enrique kay
Liza 30% lang yung controlling interest nila
compare kay Daniel at Kathryn na may 70%
Article 1802. In case it should have been
stipulated that none of the managing partners
shall act without the consent of the others, the
concurrence of all shall be necessary for the
validity of the acts, and the absence or
disability of any one of them cannot be
alleged, unless there is imminent danger of
grave or irreparable injury to the
partnership. (1694)
Sa above article, pinagkasunduan ng mga
partners na tsaka lang mag-act si managing
partners with the consent of the other
partners. Ito ‘yung agreement na
nakakasakal ng konti. Kasi bawat galaw mo,
dapat ipaalam mo muna sa partner mo. Pero
may exception. Kapag may imminent danger,
kahit walang consent ang mga partners,
binding
ang kanyang act.
Pero kung ‘yung act ni managing partner is
recurring, meaning, routine transactions e.g.
purchase ng goods-basta anything related sa
normal operation ng business, hindi na
kailangan ng consent ng ibang partners.
What is Kathryn, one of the managing
partners, siya lang ang naiwan sa head office
then suddenly, may nagpuntang
representative ng isang bank. Within a
month, kailangan na bakantehin ng Kathniel
restaurant ang isa sa branch nila dahil
magpo-foreclose na ito kung hindi nila
mababayaran ang utang nila.
Ang tatlo pang partners ay nasa ibang bansa.
Transacting with other possible business
partners. Kathryn can’t get a hold any of
them-almost a month. Kaya nag decide si
Kathryn na ibenta ang ibang trucks one week
before the foreclose ng Kathniel restaurant-
like delivery trucks and freezer trucks para
itapal sa utang nila sa bank to prevent na rin
ang foreclose ng kanilang building.
Is Kathryn’s act valid? Explain.
Based on comment section:
Yes, because the business is in imminent
danger, under po sa exceptions kapag may
imminent irreparable injury to the
partnership, a partner may act alone without
then consent ng ibang mga partner who is
absent.
Article 1803. When the manner of
management has not been agreed upon, the
following rules shall be observed:
(1) All the partners shall be considered
agents and whatever any one of them
may do alone shall bind the
partnership, without prejudice to the
provisions of article 1801.
(2) None of the partners may, without the
consent of the others, make any
important alteration in the
immovable property of the
partnership, even if it may be useful
to the partnership. But if the refusal
of consent by the other partners is
manifestly prejudicial to the interest
of the partnership, the court's
intervention may be sought. (1695a)
Sa may first paragraph, para same lang siya
sa may Article 1801. Ang pinagkaiba lang,
walang ini-appoint na managing partner sa
Article 1803. In the above article, each of the
partners are considered agent of the
partnership. Lahat sila pwede mag act as
managing partner and ang act nila is binding.
If there are any opposition in any one of
them, i-apply ang rule sa Article 1801.
On the second paragraph naman, kapag
involve ang alteration ng immovable
property, unanimous decision of the partners
is required. Why? Alteration of immovable
property is an act of strict dominion. Kaya
kahit na ang MANAGING PARTNER cannot
make an alteration without the consent of
other partners.
Kailangan pa ba ng writing consent para sa
alteration ng immovable property? The
answer is NO. The consent needs no to be
express. Kunyari ginawa na ang alteration at
wala namang nag-object, the act deemed
binding.
Pero kung ayaw mag bigay ng consent ng isa
sa mga partners, let’s say sinasadya niya. The
intervention of the court may be sought for
authority to make the necessary alteration.
But if the alteration of the immovable
property is NECESSARY for its
preservation, not merely USEFUL, hindi na
kailangan ng consent ng ibang partners.
Anong ibig sabihin pag sinabing necessary?
Ito ‘yung kinakailangan. Tinagalog lang e no.
For example, one of the immovables
property-building of Kathniel partnership,
medyo luma na kaya may tumutulo everytime
na umuulan. Since kinakailangan i-repair ang
building, nag hire si Kathryn ng laborers at
nag order ng materials to repair the Building.
Since necessary naman ang act ni Kathryn-
alteration of the building, kaya kahit
walang consent ang ibang partners, she can
do such acts and binding and kanyang act.
Pero what if wala namang tumutulo sa
Building pero ang interior design niya is too
old for the latest generation, is the consent of
the other partners necessary kung maisipan
ni Kathryn ipa-renovate ang building to
attract more customers? Since ang generation
ngayon, mas gusto nila ‘yung tinatawag na
‘instagrammable’ na place.
Article 1804. Every partner may associate
another person with him in his share, but the
associate shall not be admitted into the
partnership without the consent of all the
other partners, even if the partner having an
associate should be a manager. (1696)
For example, Kathryn, a managing partner,
associated Mamay with his share in the
partnership. Kailangan pa ba ng consent ng
ibang partners sa para accepted si Maymay
as
Kathryn’s associate? The answer is NO.
Why do you think hindi kailangan ng consent
ng ibang partners sa pag associate ng another
partner for his/her share sa partnership? The
reason is, magiging subpartner lang siya. Ang
sub partner doesn’t have rights of the
partner.
Kaya kahit managing partner si Kathryn,
Maymay doesn’t have right to manage the
partnership. Para maging admitted si
Maymay sa partnership, kailangan ng
consent
of ALL the partners.
If that’s the case, ano lang ang magiging role
ni Maymay sa partnership? Parang ang
mangyayari na lang is a partnership within a
partnership pero separate and distinct.
Ang responsible pa rin sa utang is si Kathryn.
Ang hahati sa partnership profits is si
Kathryn.
Article 1805. The partnership books shall be
kept, subject to any agreement between the
partners, at the principal place of business of
the partnership, and every partner shall at
any reasonable hour have access to and may
inspect and copy any of them.(n)
Laging tatandaan na ang partnership is
under the principle of MUTUAL TRUST and
confidence among the partners. Kaya ang
libro ng partnership is hindi dapat tinatago
within the partners. Ano ba ‘yung libro na
tinutukoy dit? Ito ‘yung financial
transactions ng business. Kung ang tindahan
may listahan, ang Partnership may
Partnership books.
Basta books ng isang Company. Confidential
‘yan. Hindi mo pwede i-disclose sa labas.
Pero if ever na naghihinala ‘yung isa sa mga
partner, pwede sila mag ask ng copy ng libro
at i-inspect nila ‘yun.
Another thing, ano ang ibig sabihin kapag
sinabing reasonable hour? We may also say
na within the business hours ‘yan. Kung
maisipan mo tignan ang libro ng madaling
araw, tulog na lahat ng tao, ‘yun ‘yung time
na mag demand ka sa mga kasama mo ng
copy ng libro.
Reasonable hour ba ‘yun?
Based on comment section:
No, if that’s the case , the one who is doubtful
is his actions not the book, it should be within
the business hour operation of the
partnership, at the right time and right place.
Article 1806. Partners shall render on
demand true and full information of all
things affecting the partnership to any
partner or the legal representative of any
deceased partner or of any partner under
legal disability. (n)
Every partner is bound to disclose the status
of the Partnership to the partner. Hindi
porket
sinabi sa article na ‘on demand’, tsaka ka
lang mag disclose ng information about sa
status ng business. Dapat volunteer ang act
na ‘yan. ‘Yung tipong hindi ka pa tinatanong,
sinasabi mo na agad kung ano nangyayari sa
business. Parang nangyayari, as a team lagi
ang galaw niyo.
Hindi pwedeng ayaw mo mag-alala ang
partner mo kaya hindi mo dinisclose. Tsaka
mo lang sasabihin kapag okay na ang lahat.
Ano pa ang use ng partnership niyo, di ba?
Article 1807. Every partner must account to
the partnership for any benefit, and hold as
trustee for it any profits derived by him
without the consent of the other partners
from any transaction connected with the
formation, conduct, or liquidation of the
partnership or from any use by him of its
property. (n)
For example, si Daniel ginamit ang Kathniel
fund at bumili siya ng Condo unit. Since
hindi pa magamit ni Daniel ang unit,
pinaupahan niya muna ito for 10k per month.
May right ba si Kathryn na makihati sa kita
ni Daniel sa pinapaupahan niyang condo
unit? Who will be the owner of the condo
unit? Si Daniel ba or the partnership?
Remember that Kathniel partnership is
restaurant partnership. In the above case,
since ang paupahan ng residential unit is
walang kinalaman sa Kathniel partnership,
walang right si Kathryn na makihati sa
kikitain ni Daniel. Daniel on the other hand,
magiging debtor ng partnership.
Pero what is Kathniel partnership is engaged
in rental business. May right ba si Kathryn
makihati sa kita ni Daniel sa condo unit?
The answer is YES. may right si Kathryn
makihati sa kita ni Daniel.
Another question, who will be the owner of
the condo unit? What if originally, binili ni
Daniel ang unit para meron siyang titirahan
na malapit sa kanilang business. Pinaupa
niya na lang muna ito until hindi pa siya
nakakalipat. May right pa rin ba si Kathryn
makihati sa kita ni Daniel?
Another example, dalawang branch ng
Kathniel restaurang ang naka-mortgage sa
bank and the bank foreclosed the mortgage
debt. Dahil ang isa sa branch ng Kathniel na
na-foreclose is ayaw i-let go ni Kathryn, she
redeemed the property gamit ang sarili
niyang pera.
Pwede bang ipa-cancel ni Kathryn ang old
title at mag issue ng bagong title under sa
pangalan niya?
If not, allowed ba si Kathryn for
compensation sa nagastos niya sa pag redeem
ng property without Daniel’s consent?
What if with Daniel’s consent?
Based on comment section:
No, the title still belongs sa partnership name.
Ang mangyayari lang is pwede ireinburse ni
Kathryn yung sariling pera niya that
redeemed the property according to
ARTICLE 1796 (The partnership shall be
responsible to every partner for the amounts
he may have disbursed on behalf of the
partnership and for the corresponding
interest, from the time the expense are made;
it shall also answer to each partner for the
obligations he may have contracted in good
faith in the interest of the partnership
business, and for risks in consequence of its
management. (1688a)
. Yes to the next question since with or
without content pwede yun gawin ni Kathryn
dahil may irreparable injury yung
mangyayari sa partnership according to
ARTICLE 1802 . (In case it should have been
stipulated that none of the managing partners
shall act without the consent of the others, the
concurrence of all shall be necessary for the
validity of the acts, and the absence or
disability of any one of them cannot be
alleged, unless there is imminent danger of
grave or irreparable injury to the
partnership. (1694)
Article 1808. The capitalist partners cannot
engage for their own account in any
operation which is of the kind of business in
which the partnership is engaged, unless
there is a stipulation to the contrary. Any
capitalist partner violating this prohibition
shall bring to the common funds any profits
accruing to him from his transactions, and
shall personally bear all the losses. (n)
For example, sa Kathniel partnership. Daniel,
as capitalist partner, nag invest siya sa
Karjon partnership (Karina and Aljon as
existing partners) as capitalist partner.
Karjon
partnership engages in English Tutorial for
kids.
Is Daniel as partner in Kathniel, invested in
Karjon partnership valid?
Yes. Capitalist partner may engage in other
partnership as long as magkaiba ang line of
business ng both invested partnership.
What if Karjon is also a restaurant
partnership. Isa sa malaking rival ng
Kathniel partnership. Para walang ma-incur
na loss si Daniel, nag invest din siya sa
Karjon partnership as capitalist partner.
Para kahit ano sa dalawang partnership ang
manguna,
walang lugi sa part ni Daniel.
According to Article 1808, Capital partner
CANNOT engage for their own account in
any operation which is of the kind of business
in which the partnership is engaged. Pero
may unless pa sa sentence. Since the problem
is silent. Walang stipulation.
Sa second paragraph, any capitalist partner
violating this prohibition shall bring to the
common fund any profits accruing to him
from his transactions, and shall personally
bear the losses.
Ano ang common fund na tinutukoy dito?
For example, may profit siya both sa Kathniel
at Karjon partnership. May right ba
makihati si Kathryn sa kinita niya asa
Karjon partnership?
And may right ba sila Karina at Aljon
makihati sa kinita niya sa Kathniel
partnership?
Based on comment section:
Yes may right si Kathryn makihati sa kita
niya from Karjon restaurant.
No for the second question since initially ang
partner ni Daniel ay si Kathryn kaya
magiging invalid yung partnership ni Daniel
sa Karjon according to ARTICLE 1808( The
capitalist partners cannot engage for their
own account in any operation which is of the
kind of business in which the partnership is
engaged, unless there is a stipulation to the
contrary. Any capitalist partner violating this
prohibition shall bring to the common funds
any profits accruing to him from his
transactions, and shall personally bear all the
losses. (n) which Daniel cannot engage.
Article 1809. Any partner shall have the right
to a formal account as to partnership affairs:
(1) If he is wrongfully excluded from the
partnership business or possession of
its property by his co-partners;
(2) If the right exists under the terms of
any agreement;
(3) As provided by article 1807;
Article 1460. A thing is determinate when it is
particularly designated or physically
segregated from all others of the same class.
What do you mean kapag sinabing interest?
What is the legal rate per annum here in the
PH?
(4) Whenever other circumstances render
it just and reasonable. (n)
Parang summary lang ito sa previous articles.
The relation between the partners is
essentially fiduciary, that is involving trust
and confidence.
Kaya walang dapat ilihim sa partnership
affairs.
If any of the four enumerated occurs, the
partner has the right to a formal account as
to partnership affairs.
Ang sample sa pang apat is, when one of the
partners assigned sa ibang bansa. Since
malayo siya sa partnership head office,
pagdating niya sa bansa, may right siya to a
formal account of partnership affairs.
A formal account is necessary incident to the
dissolution of a partnership.
Article 1810. The property rights of a partner
are:
(1) His rights in specific partnership
property;
(2) His interest in the partnership; and
(3) His right to participate in the management
(n)
What do you mean kapag sinabing specific
and determinate? Ano mga provisions na
related dito?
BASED ON COMMENT SECTION:
Interest is the share of profits and losses of a
partner in the partnership and his right to
receive partnership assets (Article 1812).
If there is no stipulation, 6% is the legal rate
per annum.
Article 1811. A partner is co-owner with his
partners of specific partnership property.
The incidents of this co-ownership are such
that:
(1) A partner, subject to the provisions of this
Title and to any agreement between the
partners, has an equal right with
his partners to possess specific partnership
property for partnership purposes; but he
has no right to possess such
property for any other purpose without the
consent of his partners;
(2) A partner's right in specific partnership
property is not assignable except in
connection with the assignment of rights
of all the partners in the same property;
(3) A partner's right in specific partnership
property is not subject to attachment or
execution, except on a claim against
the partnership. When partnership property
is attached for a partnership debt the
partners, or any of them, or the
representatives of a deceased partner, cannot
claim any right under the homestead or
exemption laws;
(4) A partner's right in specific partnership
property is not subject to legal support under
article 291. (n)
Remember, co-ownership does not
necessarily form a partnership. BUT, in
partnership, partners will become co-owners
of the partnership property. Ibig sabihin ba
nito co-ownership rules will apply?
NO
(1) The partners have equal rights to the
partnership property pero for partnership
purposes lang. Hindi pwedeng pang-sarili.
(2) Assignment of property rights. Partners
cannot assign their rights of their partnership
property. Bakit?
The partners have equal rights to the
partnership property
Kunwari, Kathniel Partnership is composed
of three partners: Kath, Daniel, Liza.
Kathniel Partnership owns a Frozen truck.
Ibig sabihin ba nito divided by three and
rights nila sa property? Si Kath sa gulong,
Daniel sa manibela, Liza sa windshield?
NO
That’s the reason kung bakit hindi pwedeng
i-assign ng mga partners ang right sa
partnership.
EXCEPTION
“Except in connection with the assignment of
rights of ALL the partners in the SAME
property”.
Example, sina Kath, Daniel, and Liza is nag-
assign ng partnership property rights kay
Enrique. Pwede ba ‘yon?
YES
Article 1812. A partner's interest in the
partnership is his share of the profits and
surplus. (n)
Profits is the excess of revenue over its
expenses (Revenue-Expenses = Profit).
Surplus is the excess of partnership assets
after partnership liabilities and debts are
paid and settled (Assets-Liabilities = Surplus)
Article 1813. A conveyance by a partner of
his whole interest in the partnership does not
of itself dissolve the partnership, or, as
against the other partners in the absence of
agreement, entitle the assignee, during the
continuance of the partnership, to interfere
in the management or administration of the
partnership business or affairs, or to require
any information or account of partnership
transactions, or to inspect the partnership
books; but it merely entitles the assignee to
receive in accordance with his contract the
profits to which the assigning partner would
otherwise be entitled. However, in case of
fraud in the management of the partnership,
the assignee may avail himself of the usual
remedies.
In case of a dissolution of the partnership, the
assignee is entitled to receive his assignor's
interest and may require an account
from the date only of the last account agreed
to by all the partners. (n)
Partners may assign the rights of partnership
INTEREST to third persons kahit hindi idi-
dissolve ang partnership. Even without the
consent of the other partners, pwede i-assign
his/her rights of partnership interest. Bakit
pwede i-assign and partnership INTEREST
rights while hindi pwede sa partnership
PROPERTIES?
Because the assignee (yung third person) will
NOT automatically become a partner.
Limited lang din ang rights ni assignee to the
partnership. Even if the partner who assigned
his/her partnership interest is a managing
partner, the assignee DOESN’T have the
right to interfere with the partnership
management.
The assignee also DOESN’T have the right to
require any information or account and to
inspect any of the partnership books.
Article 1814. Without prejudice to the
preferred rights of partnership creditors
under article 1827, on due application to a
competent court by any judgment creditor of
a partner, the court which entered the
judgment, or any other court, may charge the
interest of the
debtor partner with payment of the
unsatisfied amount of such judgment debt
with interest thereon; and may then or later
appoint a
receiver of his share of the profits, and of any
other money due or to fall due to him in
respect of the partnership, and make all other
orders, directions, accounts and inquiries
which the debtor partner might have made,
or which the circumstances of the case may
require.
The interest charged may be redeemed at any
time before foreclosure, or in case of a sale
being directed by the court, may be
purchased without thereby causing a
dissolution:
(1) With separate property, by any one or
more of the partners; or
(2) With partnership property, by any one or
more of the partners with the consent of all
the partners whose interests are not so
charged or sold.
Nothing in this Title shall be held to deprive a
partner of his right, if any, under the
exemption laws, as regards his interest in the
partnership. (n)

The partnership and the partners are
separate and distinct with each other. Kung
ano ang utang ng partnership, hindi
personally utang din ng partners yon. Vice
Versa.
For example, si Kathryn as partner ng
Kathniel Partnership, may personal na utang
siya kay Joshua, partner ng Joshlia
Partnership.
On the other hand, ang Joshlia may utang sa
Kathniel. Pwede ba sabihin ni Kathryn kay
Joshua na, “Uy, kwits na tayo ha. Same
amount din naman utang ng Joshlia sa utang
ko sayo.”?
NO
Another example, si Kathryn, partner ng
Kathniel, is PERSONALLY liable kay
Joshua. Since hindi makasingil si Joshua,
tinaas niya ‘to sa court and obtained a final
judgment in favor of him.
If that time kaya pala hindi makasingil si
Joshua, insolvent pala si Kathryn. Joshua can
ask the court for Kathryn’s interest to be
attached or levied upon his debt.
Joshua now will become a debtor-partner.
Pero before foreclosure, si Daniel and Liza,
partners also of Kathniel, pwedeng-ipurchase
or i-redeem and interest ni Kathryn without
dissolving the partnership. In this instance, si
Joshua magiging judgment creditor.
Article 1815. Every partnership shall operate
under a firm name, which may or may not
include the name of one or more of the
partners.
Those who, not being members of the
partnership, include their names in the firm
name, shall be subject to the liability of a
partner.
(n)
Example:
Yung name ng partnership is Calisay and Lising
Partnership and the partners are Mr. Lising and
Ms. Calisay, Is the partnership valid?
YES. Di naman ni-rerequire ng law na ilagay
ang bawat pangalan ng partners in the firm
name.
However, if yung name ng partnership is
Calisay, Lising, Delibios and Banting
Partnership pero yung partners are Ms. Calisay,
Mr. Lising, and Mr. Delibios only. Ano
mangyayari?
Dito papasok yung 2nd paragraph. If nasama
yung name ng tao na hindi naman partner,
magiging liable siya sa 3rd persons dahil it is
presumed as if partner siya sa partnership.
Article 1816. All partners, including
industrial ones, shall be liable pro rata with
all their property and after all the
partnership assets
have been exhausted, for the contracts which
may be entered into in the name and for the
account of the partnership, under its
signature and by a person authorized to act
for the partnership.
However, any partner may enter into a
separate obligation to
perform a partnership contract. (n)
Example:
Mr. Lising, Ms. Calisay, and Mr. Delibios are
partners. Si Delibios is an industrial partner.
Generally, si Delibios is not liable for losses.
However, it’s different sa article na to.
The difference is pagdating sa 3rd persons.
Kunwari, si Mrs. Elise is a creditor (3rd person)
ng partnership. Na-exhaust (naubos) na yung
properties ng partnership. If si Mrs. Elise is may
credit ng P150k, pwede niya bang habulin si
Delibios para maningil?
According to this provision, YES. Pwede niyang
habulin kahit sino sa kanila for their share sa
utang or the whole amount, EVEN THE
INDUSTRIAL PARTNER. If siningil ni Mrs.
Elise si Delibios yung buong P150k or just the
P50k, pwede yun.
However, pwedeng singilin/reimburse ni
Delibios yung P150k from Mr. Lising and Ms.
Calisay (P75k each) or yung P50k (P25k each)
na binayad niya para ma-settle yung credit ni
Mrs. Elise. This is because excluded talaga siya
sa loss na yun pero nagbayad pa rin siya.
Article 1817. Any stipulation against the
liability laid down in the preceding article
shall be void, except as among the partners.
(n)
Example:
Mr. Lisng, Ms. Calisay, and Mr. Delibios are
ALL CAPITALIST partners. May creditor (3rd
person) sila na si Mrs. Elise. Nag-agree sila na
exempted/excluded si Ms. Calisay sa payment of
obligations.
Ngayon, sinisingil niyan ni Mrs. Elise si Ms.
Calisay for the credit pero sabi ni Mrs. Calisay
exempted daw siya. Sabi ni Mrs. Elise, hindi
naman siya kasama sa napag-usapan na
exemption ng partners so magbayad parin si Ms.
Calisay. Nagbayad naman siya.
Humihingi niyan ng reimbursement si Calisay
from Lising and Delibios sa pinambayad niya
kay Elise. Pwede ba yun?
According to this provision, YES. Dito
pumapasok yung exception. Void yung
agreement nila sa 3rd persons pero VALID siya
among sa kanilang tatlo. As a result, need parin
nila magbayad kay Calisay. (Halos same lang to
sa Art. 1816 pero ito agreement yung sa 1816 is
excluded talaga si industrial partner)
Article 1818. Every partner is an agent of the
partnership for the purpose of its business,
and the act of every partner, including the
execution in the partnership name of any
instrument, for apparently carrying on in the
usual way the business of the partnership of
which he is a member binds the partnership,
unless the partner so acting has in fact no
authority to act for the partnership in the
particular matter, and the person with whom
he is dealing has knowledge of the fact that he
has no such authority.
An act of a partner which is not apparently
for the carrying on of business of the
partnership in the usual way does not bind
the
partnership unless authorized by the other
partners.
Except when authorized by the other
partners or unless they have abandoned the
business, one or more but less than all the
partners have no authority to:
(1) Assign the partnership property in trust
for creditors or on the assignee's promise to
pay the debts of the partnership;
(2) Dispose of the good-will of the business;
(3) Do any other act which would make it
impossible to carry on the ordinary business
of a partnership;
(4) Confess a judgment;
(5) Enter into a compromise concerning a
partnership claim or liability;
(6) Submit a partnership claim or liability to
arbitration;
(7) Renounce a claim of the partnership.
No act of a partner in contravention of a
restriction on authority shall bind the
partnership to persons having knowledge of
the
restriction. (n)
Example:
Mr. Lising and Mr. Delibios are partners in a
real estate partnership. Si Lising nagkaroon ng
transaction sa isang buyer ng land. Is the
transaction valid?
YES. Part siya ng normal/usual business
operations, meaning yun talaga yung ginagawa
nila sa business nila.
If bumili ng oven si Lising tapos sabi niya for
the partnership yon, valid parin ba?
NO. Hindi naman nagbebenta ng oven yung
partnership nila, it’s a real estate partnership.
Yung 7 na naka-enumerate is yung mga hindi
pwedeng gawin ng isang partner WITHOUT
THE CONSENT of ALL the partners. This is
applicable even for managing partners.
Article 1819. Where title to real property is in
the partnership name, any partner may
convey title to such property by a conveyance
executed in the partnership name; but the
partnership may recover such property
unless the partner's act binds the partnership
under the provisions of the first paragraph of
article 1818, or unless such property has been
conveyed by the grantee or a person
claiming through such grantee to a holder for
value without knowledge that the partner, in
making the conveyance, has exceeded
his authority.
Where title to real property is in the name of
the partnership, a conveyance executed by a
partner, in his own name, passes the
equitable interest of the partnership,
provided the act is one within the authority of
the partner under the provisions of the first
paragraph of article 1818.
Where title to real property is in the name of
one or more but not all the partners, and the
record does not disclose the right of the
partnership, the partners in whose name the
title stands may convey title to such property,
but the partnership may recover such
property if the partners' act does not bind the
partnership under the provisions of the first
paragraph of article 1818, unless the
purchaser or his assignee, is a holder for
value, without knowledge.
Where the title to real property is in the name
of one or more or all the partners, or in a
third person in trust for the partnership, a
conveyance executed by a partner in the
partnership name, or in his own name, passes
the equitable interest of the partnership,
provided the act is one within the authority of
the partner under the provisions of the first
paragraph of article 1818.
Where the title to real property is in the name
of all the partners a conveyance executed by
all the partners passes all their rights in
such property. (n)
Example:
Nag-contribute si Ms. Calisay ng land sa
partnership. Tinransfer na yung ownership sa
partnership, nakalagay sa titulo na yung owner is
yung partnership. Ngayon, binenta ni Calisay sa
3rd person yung land and siya yung pumirma ng
contract. Valid ba yung sale and transfer of
ownership sa 3rd person?
YES, IF nakalagay sa contract na pinirmahan ni
Calisay is the sale is on behalf of the
partnership.
- As a GENERAL RULE, if magbebenta
si partner ng property ng partnership
tapos siya pumirma ng kontrata, dapat
nakalagay na it’s really on behalf/for the
partnership.
- 2 EXCEPTIONS/INSTANCES na
pwedeng i-annull or gawing void ng
partnership yung sale and i-recover yung
property:
o If the sale is not part of the
normal business operations/not
in the usual way of business of
the partnership
o If the 3rd person is aware that a
partner making the sale is not
authorized to do so but the
transaction pushed through.
Article 1820. An admission or representation
made by any partner concerning partnership
affairs within the scope of his authority in
accordance with this Title is evidence against
the partnership. (n)
Article 1821. Notice to any partner of any
matter relating to partnership affairs, and the
knowledge of the partner acting in the
particular matter, acquired while a partner
or then present to his mind, and the
knowledge of any other partner who
reasonably
could and should have communicated it to the
acting partner, operate as notice to or
knowledge of the partnership, except in the
case of fraud on the partnership, committed
by or with the consent of that partner. (n)
Example:
Mr. Lising, Delibios, and Ms. Calisay are
partners engaged in a real estate business. Si
Mrs. Elise is a seller of land na nakausap ni
Delibios for inquiry. Before pa magkaroon ng
transaction, si Ms. Banting sinabi niya kay
Delibios na hindi naman si Elise ang may-ari ng
land and may nakaattach pang kaso against Mr.
Bernardo, yung totoong owner. Pero, inignore
lang ni Delibios yung notice ni Banting.
Nag-push through yung transaction between
Delibios and Elise. Tapos, si Bernardo nanalo sa
kaso against kay Elise. Ngayon, dinedemand ni
Bernardo yung recovery ng property. Sabi ni
Lising, hindi naman daw sila aware na siya yung
totoong owner. Hindi nila alam na nabigyan ng
notice si Delibios. Will that notice bind the
partnership/make them liable?
Accdng. to this provision, YES. Any notice na
makukuha ng isang partner relating sa
partnership affairs/business, kailangan i-relay sa
ibang partners because mabi-bind yung
partnership.
Article 1822. Where, by any wrongful act or
omission of any partner acting in the
ordinary course of the business of the
partnership
or with the authority of his co-partners, loss
or injury is caused to any person, not being a
partner in the partnership, or any penalty
is incurred, the partnership is liable therefor
to the same extent as the partner so acting or
omitting to act. (n)
Article 1823. The partnership is bound to
make good the loss:
(1) Where one partner acting within the scope
of his apparent authority receives money or
property of a third person and
misapplies it; and
(2) Where the partnership in the course of its
business receives money or property of a
third person and the money or
property so received is misapplied by any
partner while it is in the custody of the
partnership. (n)
Example:
Mr. Lising, Delibios and Ms. Calisay are
partners engaged in the pawnshop
business/sanglaan. Si Mrs. Elise, nag-sangla ng
singsing niya for P10k. Yung partner na nasa
shop is si Calisay, so siya yung nakausap and
nakakuha nung ring. Si Calisay, nagka-interest
dun sa singsing so inuwi niya tapos nawala.
The next day, bumalik si Elise para magbayad
na ng P10k in exchange for her ring pero sabi ni
Delibios, nawala na ni Calisay. Turns out, yung
worth ng singsing is P1M. Is the partnership
liable?
YES. As long as may transaction sa 3rd person in
the normal business operations, liable ang
partnership sa any damage or omissions.
Sisingilin ng partnership yung partner na may
kasalanan.
Article 1824. All partners are liable solidarily
with the partnership for everything
chargeable to the partnership under articles
1822
and 1823. (n)
Article 1825. When a person, by words
spoken or written or by conduct, represents
himself, or consents to another representing
him to anyone, as a partner in an existing
partnership or with one or more persons not
actual partners, he is liable to any such
persons to whom such representation has
been made, who has, on the faith of such
representation, given credit to the actual or
apparent partnership, and if he has made
such representation or consented to its being
made in a public manner, he is liable to such
person, whether the representation has or has
not been made or communicated to such
person so giving credit by or with the
knowledge of the apparent partner making
the representation or consenting to its being
made:
(1) When a partnership liability results, he is
liable as though he were an actual member of
the partnership;
(2) When no partnership liability results, he is
liable pro rata with the other persons, if any,
so consenting to the contract
or representation as to incur liability,
otherwise separately.
When a person has been thus represented to
be a partner in an existing partnership, or
with one or more persons not actual
partners, he is an agent of the persons
consenting to such representation to bind
them to the same extent and in the same
manner
as though he were a partner in fact, with
respect to persons who rely upon the
representation. When all the members of the
existing
partnership consent to the representation, a
partnership act or obligation results; but in
all other cases it is the joint act or obligation
of the person acting and the persons
consenting to the representation. (n)
This provision talks about PARTNER BY
ESTOPPEL.
Article 1826. A person admitted as a partner
into an existing partnership is liable for all
the obligations of the partnership arising
before his admission as though he had been a
partner when such obligations were incurred,
except that this liability shall be
satisfied only out of partnership property,
unless there is a stipulation to the contrary.
(n)
Example:
The partnership of Mr. Lising, Delibios and Ms.
Calisay has been existing for 10 years already.
In 2022, si Mr. Bernardo interested maging part
ng partnership and later on he was admitted into
the partnership during the same year. Nag-
contribute si Bernardo ng P500k sa partnership.
Ngayon, may utang pa pala ang partnership ng
P500k last year, 2021. Si 3rd person, naniningil
na. Since may contribution naman si Bernardo
tapos same amount pa, pwede bang ipambayad
yun?
YES. Yung contribution ni Bernardo CAN be
used as payment sa utang sa 3rd persons EVEN
BEFORE his admission. The time na nag-
contribute si Bernardo sa partnership, pwede na
gawing pambayad yun kahit na matagal na yung
utang nila.
What if, may isa pa silang creditor dati na hindi
pa nabayaran at all tapos wala ng pera yung
partnership kasi napambayad na contribution ni
Bernardo, then hinahabol na yung bawat partner
yung personal properties nila para sa utang na
yon, pwede bang habulin si Bernardo for his
personal properties?
NO. Pwedeng habulin yung personal properties
ng mga dati pang partners pero hindi pwede sa
bagong partner dahil yung utang na yun is nag-
eexist bago pa na-admit si Bernardo. At the time
na nag-arise yung obligation ni creditor 2, sina
Calisay, Lising, and Delibios palang yung
partners na alam niya.
Article 1827. The creditors of the partnership
shall be preferred to those of each partner as
regards the partnership property.
Without prejudice to this right, the private
creditors of each partner may ask the
attachment and public sale of the share of the
latter in the partnership assets. (n)
This provision pertains to Dissolution.
Example:
Ms. Calisay is a partner of a partnership. Mrs.
Elise is a CREDITOR OF THE PARTNERSHIP
with a credit of P10k while Mr. Lising is a
CREDITOR OF CALISAY for P1M. Ngayon,
magkakaron na ng dissolution yung partnership
and may surplus ng P50k.
Sino yung mas prefer or unahin na babayaran?
Si MRS. ELISE. Kahit na maliit lang yung utang
niya, CREDITOR parin siya ng
PARTNERSHIP. Yung P50k na surplus,
paghahatian yun ng partners sa partnership.
What if sinabi ni Mr. Lising na ang unfair
naman kasi hindi siya nabayaran?
WALA pa rin siya magagawa and the
partnership is not obligated to pay him first dahil
ang priority is yung CREDITOR ng
PARTNERSHIP.
EXTRA INFO:

https://www.slideshare.net/cedricyabyabin/
partcor-reviewer