REVIEWER FOR THE FINAL EXAM

PARTNERSHIP

ART.1782 (1994)
WHO CANNOT ENTER INTO UNIVERSAL
PARTNERSHIP

Persons who are prohibited from giving each other

donation cannot enter into universal partnership.

While spouses cannot enter into universal partnership, they

can enter into a limited partnership or be members thereof.
(CIR vs. Suter, et al., 27 SCRA 152)

ART.1789 (2001)
INDUSTRIAL PARTNERSHIP

An industrial partner can not engage in business for

himself, unless the partnership expressly permits him to
do so; xxxxx
ART.1801 (1992)
OBLIGATION OF THE PARTNERS AMONG
THEMSELVES
If two more partners have been entrusted 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 it 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 owing the
controlling interest.

ART.1808 (2001)
CAPITALIST PARTNER

The capitalist partner can not engage for their own

account in any operation which is the kind of business in
which the partnership is engaged, unless there is a
stipulation to the contrary. xxxxxxx

ART.1813 (1995 & 1998)

EFFECT OF CONVEYANCE BY A PARTNER
OF HIS WHOLE INTEREST IN THE
PARTNERSHIP

1. It does not dissolve the partnership;

2. It does not entitle the assignee to interfere in the

management of the business, or to require any information
or account of partnership transaction, or to inspect the
partnership book. In short, it doesn’t make the assignee a
partner. However, in case of fraud in the management of the
partnership, he may avail himself of the usual remedies;

3. It entitles the assignee to receive in accordance with his

contract the profits to which the assignor would
otherwise be entitled; and

4. Upon dissolution of the partnership, the assignee is

entitled to receive his assignor’s interest and may then
demand an accounting.

ART.1816 (1993)
OBLIGATIONS PARTNERS WITH
REGARD TO THIRD PERSONS

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 the name and
for the account of the partnership , under its
signature and by a person authorized to act for the
partnership.

ART.1818 (1994)
PARTNERSHIP IS A CONTRACT OF
“MUTUAL AGENCY”
 A corporation is no power to enter into a partnership it
may nevertheless enter into a joint venture with another
where the nature of that venture is in line with the
business authorized by its charter.
This doctrine is a based on the following considerations:
(1) that the mutual agency between the partners,
 whereby the corporation would be bound by the acts of
persons who are not duly appointed and authorized
agents and officers, would be inconsistent with the policy
of the law that the corporation shall manage its own
affairs separately and exclusively; and,

(2) that such an arrangement would improperly allow

corporate property to become subject to risks not
contemplated by the stockholders when they originally
invested in the corporation.

 Each partner acts as a principal on his own behalf, and as

an agent for his co-partners or the firm.

(Tuason & Co., vs. Bolanos, 95 Phil 106(1954))

(Mendiola v. C.A., G.R.NO.1599333, July 31,2006)

ART.1829 (1993)
DISSOLUTION

On dissolution the partnership is not terminated, but

continues until the winding up of partnership affairs
is completed.

ART.1830 (1993,1995&1997)
CAUSES OF DISSOLUTION OF
PARTNERSHIP

(1) Without violation of the agreement between

partners:

(a) By the termination of the definite term or particular

undertaking specified in the agreement;

(b) xxxxxxxxxx
 (c) By the express will of all the partners who have not
assigned their interest or suffered them to be charged for
their separate debts, either before or after the termination
of any specified term or particular undertaking;
……xxxxxxx……

(5) By the death of any partner;

……xxxxxxxxx……..

ART.1868 (2000 &2003)

CONTRACT OF AGENCY

By the contract of agency a person binds himself to render

some service or to do something in representation or on
behalf of another, with the consent or authority of the
latter.

ELEMENTS :

1. There is consent, express or implied, of the parties to

establish the relationship of agency.

2. The object is the execution of a juridical act in relation to a

third person

3. The agent acts a representative and not for himself

4. The agent acts within the scope of his authority

(Rallos v Felix Go Chan & Sons, 81 SCRA 251)

 CONTRACT OF SELL CONTRACT OF SALE
AGENCY TO SELL
The agent receives the goods The buyer receives the goods
as the goods of the principal as owner

He delivers the proceeds of He pays the price

the sale

He can return the object in Being the buyer, as a rule, he

case he is unable to sell the cannot return the object
same unsold

He is bound to act according to He can deal with the thing as

the instructions of his he pleases being the owner
principal

ART.1877 (1992)
AGENCY COUCHED IN GENERAL TERMS

An agency couched in general term comprises only acts of

administration, even if the principal should state that he
withholds no power or that the agent may execute such as
he may consider appropriate, or even though the agency
should authorize a general and unlimited management.

ART.1878 (1992 & 2004)

INSTANCES WHERE SPECIAL POWER OF
ATTORNET IS NECESSARY
1. To make such payments as are not usually considered as
acts of administrations;

2. To effect novation w/c put an end to obligations already in

existence at time the agency was constituted;

3. To compromise, to submit questions to arbitration, to

renounce the right to appeal from a judgment, to waive
objections to the venue of an action or to abandon a
prescription already acquired;

4. To waive any obligation gratuitously;

5. To enter into any contract by w/c the ownership of an

immovable is transmitted or acquired either gratuitously or for
a valuable. To sell

6. To make gifts, except customary ones for charity or those

made to employees in the business managed by the agents;

7. To loan or borrow money, unless the latter’s act be urgent

and indispensable for the preservation of the things which are
under administration;

8. To lease any real property to another person for more than

one year;

9. To bind the principal to render some service w/o

compensation;

10. To bind the principal in a contract of partnership;

11. To obligate the principal as guarantor or surety;

12. To create or any convey real rights over immovable

property;
13. To accept or repudiate an inheritance;

14. To ratify or recognize obligations contracted before the

agency;
15. Any other acts of strict dominion.

ART.1892 (1999)
SUB-AGENCY
The agent may appoint a substitute if the principal has not
prohibited him from doing so; but he shall responsible for
the acts of his substitute:

1. When he was not given the power to appoint one;

2.When he was given such power, but without designating

the person, and the person appointed was notoriously
incompetent or insolvent.

ART.1900 (1994)
CONTRACT OF AGENCY AS TO 3RD PERSONS
So far as third persons are concerned, an act is deemed to
have been performed within the scope of the agent ‘s
authority, if such act is within the terms of the power of
attorney, as written, even if the agent has in fact exceeded
the limits of his authority according to an understanding
between the principal and the agent.

ART.1907 (2004)
GUARANTEE COMMISSION
 It is merely additional compensation for risks of
collection.
> Should an commission agent receive on sale, in addition to
ordinary commissions, a guarantee commissions,

1. He shall bear the risk of collection, and

2. Shall pay the principal the proceeds of the sale on the same
terms agreed upon with the purchaser

ART.1910 (2004)
OBLIGATIONS OF THE PRINCIPAL
The principal must comply with all the obligations, which the
agent may have contracted within the scope of his authority.

As for any obligation wherein the agent has exceeded his

power, the principal is not bound except when he ratifies it
expressly or tacitly.

ART.1919 (1997)
MODES OF EXTINGUISHMENT OF AGENCY

1. By the expiration of the period

2. By the death, civil interdiction, insanity or insolvency of
the principal or the agent;
3. By the withdrawal of the agent;
4. By the accomplishment of the subject or purpose of the
agency;
5. By its revocation;
6. By dissolution of the firm or corporation which entrusted
or accepted the agency.

ART.1927 (2001)
WHEN AGENCY CANNOT BE REVOKED

1. When a bilateral contract depends upon it.

2. if its means fulfilling an obligation already contracted ; or
3.if a partner is appointed manger of a partnership in the
contract of partnership and his removal from the management
is unjustifiable.