3 Partnership Agency Loan...

ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.
PARTNERSHIP
AGENCY
LOAN
DEPOSIT
GUARANTY
www.chanroblesbar.com : www.chanroblesbar.com.ph
By a contract of PARTNERSHIP
- 2 or more persons bind themselves
to contribute money, property or
industry to a common fund, with the
intention of dividing the profits
among themselves.
- 2 or more persons may also

form a partnership for the exercise
of a profession.
ESSENTIAL REQUISITES/
FEATURES OF PARTNERSHIP
1. A VALID contract;
2. Parties must have LEGAL CAPACITY
to enter into the contract;
3. Mutual contribution of MONEY,
PROPERTY or INDUSTRY to a
common fund;
4. Object must be LAWFUL;
5. Primary purpose must be to obtain
profits to be divided among the
parties.
Art.1768 NCC.
The Partnership has
a juridical personality
separate and distinct
from that of each of the
partners.
RULES TO DETERMINE
WHETHER A PARTNERSHIP
EXISTS: (Art. 1769 NCC)
1. Except as provided by Ar t. 1825
(partnership by ESTOPPEL), persons
who are NOT partners as to each other
are NOT partners as to 3rd persons;
2. Co-ownership or co-possession does

NOT of itself establish a partnership,
whether such co-owners or co-
possessors do or do not share any
profits made by the use of the
property;
3. SHARING OF GROSS RETURNS does

NOT of itself establish a par tnership
whether or not the persons sharing
them have a joint or common right or
interest in any proper ty from which
the retur ns are derived;
4. The receipt by a person of a share of
the profits of a business is PRIMA
FACIE evidence that he is a partner in
the business, but no such inference
shall be drawn if such profits were
received in payment:
a. as a debt by installments or
otherwise;
b. as wages of an employee or rent

to a landlord;
c. as an annuity to a widow or
representative of a deceased
partner;
d. as interest on a loan, though the
amount of payment vary with the
profits of the business;
e. as the consideration for the sale
of a goodwill of a business or
other property by installments or
otherwise.
KINDS OF PARTNERS:
1. AS TO LIABILITY
1.1. General – can be held liable for
partnership obligations even to
the extent of their private prop.
1.2. Limited – cannot be held liable for
partnership obligations.
2. AS TO CONTRIBUTION
2.1. Capitalist – contributes money or
property to common fund.
2.2. Industrial – contributes only their
skill or industry to the common
fund.
3. AS TO MANAGEMENT
3.1. Managing – manage or administer
partnership affairs.
3.2. Silent – have no voice in the mgt. of
partnership affairs.
4. AS TO 3RD PERSONS
4.1. Ostensible – publicly known as such.
4.2. Secret – connection with the
partnership is not known.
4.3. By estoppel – represent themselves
or consent to another or others
representing them to anyone as
PARTNERS, either in an existing
partnership or in one that is
fictitious or apparent; also known
as DE- FACTO PARTNERS.
GENERAL PARTNER LIMITED PARTNER

1. can be held LIABLE for 1. cannot be held liable;
partnership obligations
after all partnership
assets are exhausted;
2. MAY par ticipate in the 2. does NOT par ticipate in

mgt. of the par tnership; the management;
3. may contribute money, 3. can contribute money or

property or industry to property ONLY;
the common fund;
4. name may appear in the 4. name does not appear in
firm name; firm name unless same
name of general partner;
5. there is limitation on 5. no such limitation.
right to engage in
another business or in
same kind of business.
Heirs of JOSE LIM vs. LIM, GR 172690,

March 3, 2010
Trucking Business
(+) (+)
Jimmy Yu Jose Lim Norberto Uy
(+)
Juliet ----- Elfledo; other heirs
Ran the affairs of the partnership wielding absolute

control, power & authority w/o opposition from any of
the petitioners; did not receive regular wages but
received shares of the profits of the business
Q: Between Jose & Elfledo, who is the

partner in this trucking business?
The following circumstances tend to prove that

Elfledo was himself the partner of Jimmy and
Norberto: 1) Cresencia testified that Elfledo gave
P50,000.00 as share in the partnership; (2)
Elfledo ran the affairs of the partnership,
wielding absolute control, power and
authority; (3) all of the properties, particularly
the nine trucks of the partnership, were
registered in the name of Elfledo; (4) Elfledo
did not receive wages or salaries from the
partnership, indicating that what he actually
received were shares of the profits of the
business; and (5) none of the petitioners, as
heirs of Jose, the alleged partner, demanded
periodic accounting from Elfledo during his
lifetime.
FORMALITIES REQUIRED IN
PARTNERSHIP
1. A partnership may be constituted in
ANY FORM, except where IMMOVABLE
PROPERTY or real rights are
contributed thereto, in which case a
public instrument shall be necessary
(Art. 1771 NCC).
2. Contract of partnership having a

CAPITAL of P3K or more in money or
property, shall appear in a public
instrument which must be recorded in
the office of the SEC (Art. 1772 NCC).
Failure to comply with #2 shall

NOT affect the liability of the
partnership and the members thereof
to 3rd persons.
3. Contract of partnership is VOID,

whenever IMMOVABLE PROPERTY is
contributed thereto, if an INVENTORY
of said property is NOT made, SIGNED
by the parties, and ATTACHED to the
PUBLIC INSTRUMENT. (ART. 1773 NCC).
PRINCIPLE OF DELECTUS
PERSONARUM:
- NO ONE can beco ome a
member of the parr tnership
WITHOUT the CONSENT of
ALL the partners.
CONTRACT OF
SUB-PARTNERSHIP
- one formed between a
member of a partnership and a
3rd person for a division of profits
coming to him from the
partnership enterprise.
¾ it is a partnership within
a partnership distinct and
separate from the main
or principal partnership.
RIGHTS OF A PARTNERS
SHIP
1. It ha
as a perso
onality separate and
distinct from the partners;
(Art. 1768 NCC).
2. It can acquire or possess property;;
(Art. 1774 NCC).
3. It can incur obligations;
(Art.1816 NCC).
4. It can bring actions.

5. It can be adjudged as insolvent.
OBLIGATIONS OF PARTNERS
AMONG THEMSELVES
1. Contribute EQUAL shares to the capital
of the partnership, unless stipulated to
the contrary. (Art. 1790 NCC).
1.1. debtor of partnership
1.2. warranty for eviction
2. Industrial partner CANNOT engage in

business for himself, UNLESS the
partnership EXPRESSLY
permits him to do so.
(Art. 1789 NCC).
3. Capitalist partners CANNOT engage in

the SAME BUSINESS of the part-
nership UNLESS stipulated to the
contrary (Art. 1808 NCC).
4. In case of imminent loss of the

business of the P, any partner who
REFUSES to contribute ADDITIONAL
SHARE to the capital, EXCEPT an
industrial partner, to SAVE THE
VENTURE, shall be obliged to SELL
his interest to the other partners
(Art. 1791 NCC).
SHARING OF PROFITS AND

LOSSES
1. Losses & profits shall be distributed in
conformity with the agreement;
¾ If share only in the PROFITS has
been agreed upon share in
the LOSSES shall be in the SAME
PROPORTION;
¾ absence of stipulation share
in the profits/losses shall be in
PROPORTION to the
CONTRIBUTION of the partners.
• INDUSTRIAL PARTNER
a) is not liable for the losses;
b) shall receive just and equitable share
as to the profits;
c) if he contributed capital, he shall
receive a share in the profits
proportionate to his capital.
(Art. 1797 NCC).
2. IF designation of shares in
profits/losses entrusted to a 3rd person
designation may be
impugned only if it is manifestly
INEQUITABLE. (Art. 1798 NCC).
¾ IF P has begun to execute the de

ecision
of the 3rd person and the DECISION is
NOT IMPUGNED w/n 3 mos. from
knowledge thereof a partner
cannot COMPLAIN of such h dec
cision.
** DESIGNATION OF LOSSES AND

PROFITS
S CANNOT BE
ENTRUSTED TO ONE OF THE
PARTNERS. (Art. 1798 NCC)
3. Stipulation w/c EXCLUDES one or

more PARTNERS from ANY SHARE IN
THE PROFITS OR LOSSES IS VOID.
(Art. 1799 NCC).
OBLIGATIONS TO THIRD
PERSON OF THE PARTNERSHIP
1. Every P shall operate under a FIRM
NAME may or may not include
the name of 1 or more partners.
¾ not member of P but name is
included in the firm name
LIABLE as a partner (Art. 1815 NCC)
2. ALL partners, including INDUSTRIAL
ONES, shall be liable PRO RATA with
all their property & AFTER ALL the
partnership assets have been
exhausted for contracts entered into
by the partnership. (Art. 1816 NCC).
3. Any stipulation against the liability laid

down in Art. 1816 shall be VOID, except
as among partners. (Art.1817 NCC)
4. Every partner is an AGENT of the P for
the purpose of its business; the act of
every partner including the execution
in the P name of any instrument
BINDS the P, UNLESS the partner so
acting has:
a) in fact NO AUTHORITY to act for the
P in the particular matter AND
b) the person with whom he is dealing has
knowledge of the fact that he has NO
AUTHORITY. (Art. 1818 NCC).
GUY vs. ATTY. MICHAEL GACOTT,

GR 206147, Jan. 13, 2016
Atty. Gacott Quantech Systems Corp. Guy
(QSC)
5/3/97 – bought 2 Gen. Mgr. of the
transreceivers for P18K; QSC’s employee Partnership
5/10/97- for being defective, promised to send
personally returned the replacement. one of Guy’s
items for replacement; motor vehicles
Despite oral & written demands, no was attached by
refund or replacement was made; the Sheriff
Filed a case for damages; RTC decided
in his favor; Writ of Execution was
issued.
Q: Is Guy solidarily liable with the

partnership for damages arising from breach
of the Contract of Sale with Atty. Gacott?
Article 1816 NCC provides :
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.
.
The partners’ obligation with respect to the

partnership liabilities is subsidiary in nature. It provides
that the partners shall only be liable with their property after
all the partnership assets have been exhausted. To say that
one’s liability is subsidiary means that it merely becomes
secondary and only arises if the one primarily liable fails to
sufficiently satisfy the obligation. Resort to the properties of
a partner may be made only after efforts in exhausting
partnership assets have failed or that such partnership assets
are insufficient to cover the entire obligation. The subsidiary
nature of the partners’ liability with the partnership is
one of the valid defenses against a premature execution of
judgment directed to a partner.
5. IF Partner authorized to manage the

P collects a demandable sum owed
to him in his own name and owed to
the partnership such
amount collected shall be APPLIED
PROPORTIONATELY to the TWO
CREDITS even if he gave a receipt
for his own credit only;
¾ IF receipt was given for the P

credit only amount shall
be FULLY APPLIED TO THE P
CREDIT ALONE (Art. 1792 NCC).
6. Partnership books shall be

kept at the PRINCIPAL PLACE
of business of the
partnership; every partner
shall at any REASONABLE
HOUR have access to and may
inspect and copy any of them.
(Art. 1805 NCC).
EFFECTS OF CONVEYANCE BY A
PARTNER OF HIS INTEREST IN
THE PARTNERSHIP (Art. 1813)
1. Conveyance of his whole interest
Partnership may either
REMAIN or be DISSOLVED;
2. Assignee DOES NOT necessarily
become a partner;
3. Assignee CANNOT interfere in the
mgt. or adm. of the P business;
4. Assignee CANNOT demand
information, accounting
and inspection of P books.
RIGHTS OF AN ASSIGNEE (Art.1813)

1. Receive whatever assignor – par tner
would have obtained in terms of
profits;
2. Avail of the usual remedies in

case of fraud in the mgt./adm. of P;
3. Ask for the annulment of contract of
assignment if he was induced to join,
through any of the vices of consent;
4. Demand for an accounting.
(ONLY in case of dissolution).
DISSOLUTION: the change in the

relation of the partners caused by
any partner ceasing to be
associated in the carrying of the
business (Art. 1828).
WINDING-UP: the process of settling
the partnership affairs after
dissolution.
TERMINATION: the point in time

when ALL partnership affairs are
wound-up or completed and it is
the END of the partnership.
ORDER OF PAYMENT IN THE

WINDING-UP OF PARTNERSHIP
LIABILITES (Art. 1839)
I. GENERAL PARTNERSHIP
THOSE OWING TO:
1. creditors other than partners;
2. partners other than for capital
and profit;
3. partners in respect of capital;

4. partners in respect of profits.
II.. LIMITED PARTNERSHIP

THOSE OWING TO:
1. creditors, in the order of
priority provided by law,
EXCEPT those to limited
partners on account of their
contribution & to general
partners;
2. limited partners in respect to

their share of the profits &
other compensation by way of
income on their contributions;
3. limited partn
ners in resp
pect to
the capita
al of their
contributions;;
4. generaal partners other than

for capital & profits;
5. geneeral partners in respect to

profits;
6. general partners in resp

pect to
capital.
WHO MAY WIND UP THE P

AFFAIRS (Ar t. 1836)
Unless otherwise agreed, the
par tners who have NOT WRONGFULLY
DISSOLVED the P or the legal
representative of the last surviving
partner, NOT INSOLVENT, has the right
to wind-up Partnership affairs provided
that any partner, his legal
representative or his assignee, upon
cause shown, may obtain winding up
by the COURT.
AGENCY
By the contract of AGENCY

render
some
service
In
binds
TO representation
himself
OR on behalf
of
do
something
with the
consent/
authority
(Art. 1868)
Relationship Between Principal & Agent FIDUCIARY

REQUISITES:
1. CONSENT
a). express
Art. 1869 NCC
b). implied
(1). from the acts of the principal, from his

silence or lack of action, or his failure to
repudiate the agency, knowing that a
person is acting on his behalf without
authority (Art. 1869 NCC);
(2). from the acts of the agent which

carry out the agency, or from his
silence or inaction according to the
circumstances (Art. 1870 NCC);
2. OBJECT – execution of a juridical act in

relation to a 3rd person;
3. CAUSE/CONSIDERATION – presumed for

compensation, unless proven
to the contrary (Art. 1875 NCC);
4. AGENT – acts as REPRESENTATIVE of

the principal;
– acts within the scope of his
authority.
AGENT MUST ACT:

1. within the scope of his authority
(Art. 1881 NCC);
a). acts conducive to the accomplishment of
the purpose of the agency; (Art. 1881
NCC);
b). Authority is NOT considered EXCEEDED if
performed in a manner MORE
ADVANTAGEOUS to the principal than
that specified by him (Art. 1882 NCC).
2. in behalf of his principal (Art. 1882 NCC);

3. in accordance with instructions of his
principal (Art. 1887 NCC).
Power shall be
Art. 1873 NCC. in full force until
rescinded in the
same manner it
was given.
specially
informs
another
Power of
Attorney
states by
public
advertisement
duly authorized agent
any person
Art. 1874. Sale of land by agent

authority of agent in writing;
otherwise, sale is VOID.
Art. 1877. Agency couched in

general terms comprises
acts of administration
only
EVEN IF principal states that:
1. he withholds NO power, OR
2. agent may EXECUTE acts he may
consider appropriate, OR
3. agency authorizes a GENERAL &
UNLIMITED MANAGEMENT.
Art. 1878 NCC. SPECIAL POWER

OF ATTORNEY
1. To make payments not usually
considered acts of administration;
2. To effect novations w/c put an end to
obligations already existing at the 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 venue of an action or to
abandon prescription already acquired;
4. To waive any obligation gratuitously;

5. To enter into any contract by which

ownership of an immovable is
acquired/transmittted, either gratuito
ously
y
or for valuable considerattion;
6. To make gifts except customary ones

for charity or made to employees in the
busiiness managged
d by the agent;
7. To loan or borrow money, unless the
latter act be urgent and indispensable
for the preserr vation off the things under
administtration;
8. To lease any rea al property to another
person for more than one year;
9. To bind the principal to render some

service w/o
o compensation;;
10. To bin nd the principal in a conttract of
parr tnership;
11. To obligate the prrincipal as a
guarantor or surety;
12. To create or conveyy 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 act of strict do
ominion..
Q: Can an agent appoint a substitute?

A: YES, an agent MAY APPOINT a
substitute/sub-agent.
EXCEPTION: PROHIBITED by the
principal (Art. 1892)
EFFECT AGENT is responsible for the
acts of the substitute WHEN:
1. he was NOT given the power to appoint
one; OR
2. he was given such power but W/O
designating the person, and the person
appointed was NOTORIOUSLY
INCOMPETENT OR INSOLVENT.
All acts of the substitute when prohibited
by the principal VOID.
EFFECTS OF AGENT’S ACTS:

I. WITH AUTHORITY OF THE PRINCIPAL
1. in principal’s behalf VALID; principal
is bound;
2. in agent’s behalf NOT binding on
principal;
a). Agent is directly bound in favor of
the other person with whom he
contracted;
b). principal has no right of action
against the person w/ whom agent
transacted and vice-versa.
EXCEPTION: Contract involves things
belonging to the PRINCIPAL
** W/O prejudice to the ACTIONS between
the PRINCIPAL & the AGENT.
II. W/O authority of the principal

1. in principal’s behalf
unauthorized and
unenforceable.
EXCEPTION: RATIFIED by principal

(Art. 1910 NCC).
2. in agent’s behalf VALID as

between agent and 3rd person.
OBLIGATIONS OF THE AGENT:

1. bound by his acceptance to carry out
the agency; liable for damages w/c thru
his non-perfor mance, the principal may
suffer; (Art. 1884 NCC);
2. in case he declines an agency bound
to observe the DOAGFOAF in the
custody & preser vation of the goods
forwarded to him by the owner;
(Art. 1885 NCC);
3. IF STIPULATED, agent shall advance the

necessary funds; EXCEPTION: principal
is INSOLVENT; (Art. 1886 NCC);
4. act in accordance with instructions of

the principal; in default thereof
do what a GFOAF would do, as
required by the nature of the business;
(Art. 1887 NCC);
5. not to carry out the agency if its
execution would manifestly result in
loss or damage to the principal; (Art.
1888 NCC);
6. liable for damages, if there being a
conflict of interests, agent prefers his
own over that of the principal;
(Art. 1889 NCC);
7. Agent empowered to borrow money

he may be the LENDER; if
authorized to lend money at interest
he CANNOT BORROW it W/O the
CONSENT of the principal. (Art. 1890);
8. render an account of his transactions;
deliver to the principal whatever he
may receive by virtue of the agency,
even though not owing to the principal;
stipulation EXEMPTING the agent from
the obligation to render an ACCOUNT
VOID (Art. 1891 NCC);
9. finish the business already begun on
the death of the principal, should
delay entail any danger. (Art. 1884).
OBLIGATIONS OF THE PRINCIPAL:

1. comply with all the obligations w/c the
agent may have contracted w/in the
scope his authority. (Art. 1910 NCC).
N.B. Principal is NOT BOUND when agent
exceeded his power.
EXCEPTIONS:
1. principal RATIFIES the contract,
expressly or tacitly;
2. principal is SOLIDARILY LIABLE
w/ the agent if he allowed the
latter to act as though he had full
powers. (Art. 1911 NCC).
2. advance to agent amount necessary

for the execution of agency; reimburse
if agent advanced the amount, even if
undertaking was NOT successful;
reimbursement includes interest on
the sums advanced by agent. (Art.1912);
3. Indemnify agent for all damages he
may suffer, W/O fault or negligence on
the part of the agent. (Art. 1913 NCC);
N.B. agent may retain in PLEDGE object of

agency until reimbursement/
indemnification by principal based
on Arts. 1912 & 1913 NCC.
Art. 1916. When 2 persons contract

with regard to the same thing, one
with the agent and the other with
the principal and the 2 contracts
are incompatible with each other
that of the PRIOR DATE shall
be PREFERRED; principal to pay
DAMAGES to 3rd person whose
contract was rejected; if agent
acted in BF he ALONE shall
be liable to the 3rd person. ( W/O
prejudice to Art. 1544 NCC).
Commission Agent: one engaged

in the sale of goods for a
principal “on consignment”, such
goods placed in his possession
and at his disposal.
Guaranty commission or “del
credere” – fee given to an agent for
the risk he has to bear in the
collection of credits for the
principal; agent becomes an
INSURER of the credit and the
principal, the INSURED.
EXTINGUISHMENT OF AGENCY:
E 1. Expiration of the period;
D 2. Death, civil interdiction, insanity or

insolvency of principal OR agent;
W 3. Withdrawal of the agent;
A 4. Accomplishment of the object or

purpose of the agency;
R 5. Revocation of the agency;

D 6. Dissolution of the firm or
corporation which entrusted or
accepted the agency.
AGENCY
OLIVER vs. PS BANK, et.al., GR 214567, 4/4/16
entrusted her passbook to
Castro; discovered erasures &
super-impositions therein;
discovered additional loan of PS Bank
P5,888,149.33 & P7M cash
Oliver Castro
withdrawal from her account,
w/c she did not authorize. (Branch Mgr.)
Agreement wherein Oliver obtained a P10M loan from PS Bank

secured by a REM on her H & L thru Castro’s help; after
acquiring the loan proceeds, Castro lent the amount to
borrowers who were waiting for the actual release of their
loan proceeds; Oliver earned 4% interest/month while Castro
earned 10% commission from the interests.
Q: What is the nature of the transaction

entered into by Oliver and Castro?
PATRIMONIO vs. GUTIERREZ, et.al.,

G.R. 187769, June 4, 2014
Alvin Gutierrez Marasigan

Entrusted pre- Slam-Dunk P200K loan
signed checks to Corp. w/simultaneous
Gutierrez to delivery of Alvin’s
answer for filled-out checks;
expenses of Slam check was
Dunk “NOT to fill- dishonored for
them out W/O “Account Closed”
previous filed BP 22 case
notification to him against Alvin
& approval by him
ISSUE: WON Alvin is liable for the payment of the

P200K loan?
Article 1868 of the Civil Code defines a

contract of agency as a contract whereby
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." Agency may be express, or implied
from the acts of the principal, from his
silence or lack of action, or his failure to
repudiate the agency, knowing that another
person is acting on his behalf without
authority.
True, the petitioner had issued several pre-

signed checks to Gutierrez, one of which fell
into the hands of Marasigan. This act, however,
does not constitute sufficient authority to
borrow money in his behalf and neither should it
be construed as petitioner’s grant of consent to
the parties’ loan agreement. Without any
evidence to prove Gutierrez’ authority, the
petitioner’s signature in the check cannot
be taken, even remotely, as sufficient
authorization, much less, consent to the
contract of loan. Without the consent given by
one party in a purported contract, such contract
could not have been perfected; there simply
was no contract to speak of.
FLORENTINA BAUTISTA-SPILLE vs. NICORP MGT.

& DEV. CORP., et.al., GR 214057, Oct. 19, 2015
Florentina Benjamin NICORP International

reg. owner of a executed CTS paid the
Exchange Bank
33,052 sq.m. lot of lot in favor downpayment (IE) Bank
in Imus, Cavite; of NICORP for & the TCT to
executed a GPA in P15M, with be held in
favor of her downpayment escrow by IE
brother, Benjamin of 20% of Bank until full
“to exercise adm., P15M, balance payment of
gen. control & payable in 8 P15M.
supervision over months.
my business &
properties in the
Phil and to act as
my general rep. &
agent. xxx”. Q: Is the Contract To Sell of the
lot valid, voidable or void?
LOAN
LOAN
I. COMMODATUM one of the
contracting parties delivers to another
a non-consumable thing so the other
may use the same for a certain time
and RETURN it. (Art. 1933 NCC).
A. precarium (Art. 1947 NCC)
1. Bailor can demand return of the
thing when:
a). ne
neither the duration nor the use of
the thing loaned has been stipulated;
th
b). us
use of the thing is merely tolerated
by the owner.
II. MUTUUM one of the contracting

parties delivers to the other money or
any consumable things subject to the
condition that the same amount of the
same kind and quality be paid and
returned.
(Art. 1934) An accepted promise to

deliver something by way of
commodatum or simple loan
is BINDING upon the parties
but PERFECTED only upon
the DELIVERY of the thing.
COMMODATUM MUTUUM
non-consumable things; if money or other consumable
consumable, purpose is NOT thing;
consumption but exhibition;
essentially gratuitous; may be gratuitous or onerous;
borrower must return SAME borrower need to pay the
thing loaned; same amount of the same
kind and quality;
may involve real or personal personal prop. only;
prop.;
loan for use or temporary loan for consumption;
possession;
bailor may demand return of lender may NOT demand its
the thing loaned BEFORE the return BEFORE the lapse of
expiration of the term in case the term agreed upon;
of urgent need;
COMMODATUM MUTUUM
loss of the thing suffered by bailee suffers the loss even if
bailor; caused by a fortuitous event
and he is NOT absolved from
obligation to pay;
purely personal in character NOT purely personal in
(Art. 1939 NCC) character.
a). death of either parties
extinguishes
commodatum;
b). bailee can neither lend/
lease the object to a 3rd
person.
Exception: members of
bailee’s household may use
the thing loaned.
Exception to the exception:
1. stipulation to the contrary
2. nature of the thing forbids
such use.
OBLIGATIONS OF THE BAILEE:

1. pay for ordinary expenses for the use and
preservation of the thing (Art. 1941);
2. pay 1/2 of extra-ordinary expenses arising
on the occasion of actual use by the
bailee if he acted W/O fault, unless there
is a stipulation to the contrary (Art.1949);
3. liable for the loss of the thing caused by a
fortuitous event if he: (Art. 1942 NCC)
a). devotes the thing to any purpose
different from that for which it has
been loaned;
b). keeps it longer than the period

stipulated or after the accomplishment
of the use;
c). lends or leases the thing to a 3rd person

who is not a member of his household;
d). being able to save either the thing

borrowed or his own thing, he chose to
save the latter;
e). thing loaned has been delivered w/

appraisal of its value.
OBLIGATIONS OF THE BAILOR:

1. refund extra-ordinary expenses for
preservation of the thing loaned,
provided the bailee brings the same to
the knowledge of the bailor before
incurring them.
EXCEPTION: they are so urgent that reply to

the notification cannot be awaited W/O
danger.
2. indemnify bailee for damages caused by

the flaws in the thing, if he knew of the
flaws and did NOT advise the bailee of
the same (Art. 1951 NCC).
Art. 1944. Bailee CANNOT RETAIN the

thing loaned on the ground bailor
owes him something.
EXCEPTION: damages suffered by
bailee based on Article 1951
NCC
Art. 1952. Bailor CANNOT EXEMPT

himself from payment of
damages/expenses by abandoning
the thing to the bailee.
PRINCIPLES IN MUTUUM:
Art. 1956. NO INTEREST shall
be due unless it has been
expressly stipulated in writing.
Art. 1959. W/O prejudice to the

provisions of Art. 2212 NCC,
interest due and unpaid shall NOT
earn interest. However, the
contracting parties may by
stipulation capitalize the interest
due and unpaid, which as added
principal, shall earn new interest.
Art. 2212. Interest due shall earn

LEGAL INTEREST from the time it is
judicially demanded, although the
obligation may be silent upon this
point.
What is the prevailing rate of interest now?
The Monetary Board, in its Resolution No. 796

dated 16 May 2013, approved the following revisions
governing the rate of interest in the absence of
stipulation in loan contracts, thereby amending
Section 2 of Circular No. 905, Series of 1982:
Section 1. The rate of interest for the loan or

forbearance of any money, goods or credits and
the rate allowed in judgments, in the absence of
an express contract as to such rate of interest,
shall be six percent (6%) per annum.
This circular shall take effect on 1 July 2013.

In the absence of an express stipulation as to

the rate of interest that would govern the parties,
the rate of legal interest for loans or forbearance of
any money, goods or credits and the rate allowed in
judgments shall no longer be twelve percent
(12%) per annum - as reflected in the case of
Eastern Shipping Lines XXX - but will now be six
percent (6%) per annum effective July 1,
2013. It should be noted, nonetheless, that the new
rate could only be applied prospectively and not
retroactively. Consequently, the twelve percent
(12%) per annum legal interest shall apply
only until June 30, 2013. Come July 1, 2013
the new rate of six percent (6%) per annum
shall be the prevailing rate of interest when
applicable.
Sun Life of Canada (Phils), Inc. vs. SANDRA

TAN KIT et.al., G.R. 183272, Oct. 15, 2014
Issue: Whether petitioner is liable to pay the 12% interest on
the P13,080.93 premium to be refunded to respondent.
Sandra Norberto Sun Life

(+2/19/2001)
beneficiary of the disseminated policy is null & void
P300K insurance gastric carcinoma; since Norberto did
policy claiming “NO” to the not give correct
full amount of question if he had information; liability
insurance smoked cigarettes is refund of
proceeds; refused or cigars w/in the premium paid.
to accept the last 12 months prior
P13,080.93 check to the application
representing for insurance.
premium refund
In this case, it is undisputed that simultaneous to

its giving of notice to respondents that it was
rescinding the policy due to concealment, petitioner
tendered the refund of premium by attaching to the
said notice a check representing the amount of refund.
However, respondents refused to accept the same since
they were seeking for the release of the proceeds of
the policy. Because of this discord, petitioner filed for
judicial rescission of the contract. Petitioner, after
receiving an adverse judgment from the RTC, appealed
to the CA. The appellate court found Norberto guilty of
concealment and thus upheld the rescission of the
insurance contract and consequently decreed the
obligation of petitioner to return to respondents the
premium paid by Norberto. Moreover, we find that
petitioner did not incur delay or unjustifiably deny the
claim.
Petitioner properly complied with its

obligation under the law and contract. Hence,
it should not be made liable to pay
compensatory interest.
Considering the prevailing circumstances of

the case, we hereby direct petitioner to
reimburse the premium paid within 15 days
from date of finality of this Decision. If
petitioner fails to pay within the said period,
then the amount shall be deemed equivalent to
a forbearance of credit.In such a case, the
rate of interest shall be 6% per annum.
DEPOSIT
¾ is constituted from the moment a

person receives a thing belonging to
another w/the obl. of safely keeping it
and returning the same. (Art.1962 NCC)
• perfected only upon delivery of the thing
(Art. 1963 NCC);
• may be constituted judicially or extra-
judicially (Art. 1964 NCC);
• gratuitous contract, except: (Art. 1965 );
1). agreement to the contrary;
2). depositary is engaged in the
business of storing goods;
• only movable things may be the object;
• may be entered into orally or in writing
(Art. 1969 NCC).
A. JUDICIAL (sequestration) attachment

or seizure of property in litigation is
ordered by the court. (Art. 2005 NCC);
B. EXTRA-JUDICIAL made by
agreement of the parties.
1. voluntary – made by the will of the

depositor; made by 2 or more persons each
of whom believes himself entitled to the
thing deposited w/a 3rd person, who shall
deliver it in a proper case to the one to
whom it belongs (Art. 1968 NCC)
2. necessary – made
a). in compliance with a legal obl.;
b). on the occasion of any calamity;
c). by travellers in hotels or inns
(Art. 1998 NCC);
d). by travellers w/ common carriers
(Art. 1736 NCC).
DEPOSIT COMMODATUM
for safekeeping use of the thing

nature or class of the non-consumable thing
object is immaterial
may or may not be always gratuitous
gratuitous
may be constituted constituted extra-
judicially or extra- judicially only
judicially
EXTRA-JUDICIAL
DEPOSIT JUDICIAL DEPOSIT
constituted by the will of constituted by court

the contracting parties order (Art. 2005 NCC)
must be movable may be movable or
property only immovable property
(Art. 2006 NCC)
for safekeeping protection of owner’s
right
as a gen. rule: gratuitous always onerous
depositary obliged to delivered to depositor

return the thing upon only upon order of the
demand by depositor court
OBLIGATIONS OF THE DEPOSITARY:

1. To keep the thing safely.
2. Not to use it except when preservation

of the thing requires its use.
3. To keep the secret of the deposit.
4. To return the thing with all its products,

accessories and accessions upon
depositor’s demand.
OBLIGATIONS OF THE DEPOSITOR:

1. If gratuitous to reimburse the
depositary for necessary expenses for
preservation. (Art. 1992 NCC)
2. If onerous pay the price agreed upon.
3. Reimburse depositary for loss arising
from the character of the thing deposited.
EXCEPTION: if at the time of the deposit,
he was NOT aware of OR was not
expected to know the dangerous
character of the thing deposited OR
unless he notified the depositary of the
same OR the latter was aware of it w/o
advice from the depositor (Art. 1993).
ART. 1973 NCC.

GENERAL RULE: Depositary CANNOT
deposit the thing with a 3rd person.
EXCEPTION: Stipulation ALLOWING deposit
with a 3rd person.
EFFECTS:
1. Depositary is LIABLE for the loss if he
deposited the thing with a person who is
a). MANIFESTLY CARELESS OR
b). UNFIT
2. Depositary is RESPONSIBLE for the
negligence of his employees.
ART. 1979. Depositary is LIABLE for the

LOSS of the thing deposited through
a FORTUITOUS EVENT if:
1. it is so stipulated;
2. he uses the thing without depositor’s
permission;
3. he delays its return;
4. he allows others to use it even though

he himself may have been authorized to
use the same.
ART. 1984. Depositary CANNOT demand that

depositor prove his ownership of the thing
deposited.
¾ should he discover the thing has been
stolen & who the true owner is he
must advise the owner of the deposit.
does not claim the thing w/in

the period of one (1) month
1. shall be relieved of all responsibility by

returning the thing deposited to the
depositor.
2. has reasonable grounds to believe the
thing has not been lawfully acquired by
the depositor return the same.
ART. 1988. Thing deposited must be

RETURNED to the depositor upon
demand, even if a specified period
for such return has been fixed.
EXCEPTIONS:
1. thing is judicially attached while in the
possession of the depositary.
2. Depositary is notified of the opposition
of a 3rd person to the return/removal of
the thing deposited.
RESPONSIBILITY OF INNKEEPERS:
1. Innkeepers are LIABLE as depositaries
for effects brought by guests, provided:
a). notice was given to
them/their employees.
b). the guests/travellers took the
precautions they were advised
to take as to the care and
vigilance of their effects.
(Art. 1998 NCC)
2. Hotel-keeper is LIABLE for the vehicles,
animals and articles placed in annexes
of the hotel. (Art. 1999 NCC)
3. Liability for loss/injury to personal

property of guests applies whether
caused by:
a). servants or employees of the hotel
b). strangers (Art. 2000 NCC)
EXCEPTION: Force majeure

(Ar t. 2001 NCC)
(a). use of arms;
(b). through an irresistible force.
Depositary must IMMEDIATELY inform the

depositor of the attachment or opposition
to the return to depositor.
ART. 1989. If depositary has justifiable
reasons for not keeping the thing
deposited return the thing to the
depositor
refuses to accept
consignate the
thing in court.
ART. 1974. Depositary may change the way

of deposit Notify the owner and await
his decision.
Exception: delay would cause danger
to the thing deposited.
ART. 1994. Depositary may RETAIN the thing

in pledge until the full payment of what
may be due him by reason of the deposit.
DEPOSIT IS EXTINGUISHED: (Art. 1995)
1. Loss/destruction of the thing deposited.
2. In case of a gratuitous deposit, upon
the death of either the depositor or the
depositary.
Art. 2002. Hotel-keeper is NOT LIABLE for
compensation if the loss is due to:
1. Acts of the guests, his family, servants
or visitors.
2. The character of the things brought into
the hotel.
Art. 2003. Hotel-keeper CANNOT FREE

himself from responsibility by
posting notices to the effect that he
is NOT liable for the articles brought
by the guests; stipulation between
hotel-keeper and guest VOID.
Art. 2004. Hotel-keeper may RETAIN

things brought in the hotel by
guests as a SECURITY for
credits on account of lodging and
supplies usually furnished to hotel
guests.
YHT REALTY CORPORATION, et. al., vs.

CA, et.al., G.R. NO. 126780, 2/17/05
The primary question of interest before this

Court is the only legal issue in the case: It is
whether a hotel may evade liability for the
loss of items left with it for safekeeping
by its guests, by having these guests
execute written waivers holding the
establishment or its employees free from
blame for such loss in light of Article 2003
of the Civil Code which voids such
waivers.
On 30 October 1987, McLoughlin arrived from

Australia and registered with Tropicana. He rented a
safety deposit box as it was his practice to rent a
safety deposit box every time he registered at
Tropicana in previous trips. As a tourist, McLoughlin
was aware of the procedure observed by Tropicana
relative to its safety deposit boxes. The safety
deposit box could only be opened through the use
of two keys, one of which is given to the
registered guest, and the other remaining in the
possession of the management of the hotel. When
a registered guest wished to open his safety deposit
box, he alone could personally request the
management who then would assign one of its
employees to accompany the guest and assist him in
opening the safety deposit
box with the two keys.
There were conditions for renting the safety deposit

box entitled “Undertaking For the Use Of Safety
Deposit Box,” specifically paragraphs (2) and (4) thereof,
to wit:
2. To release and hold free and blameless

TROPICANA APARTMENT HOTEL from any liability
arising from any loss in the contents and/or use of
the said deposit box for any cause whatsoever,
including but not limited to the presentation or use
thereof by any other person should the key be lost;
4. To return the key and execute the RELEASE in

favor of TROPICANA APARTMENT HOTEL upon
giving up the use of the box.
Notably, both the trial court and the appellate court

found the said “Undertaking” to be null and void.
The SC finds no reason to reverse their common
conclusion. Article 2003 is controlling. thus:
Art. 2003. The hotel-keeper cannot free himself

from responsibility by posting notices to the effect
that he is not liable for the articles brought by the
guest. Any stipulation between the hotel-keeper
and the guest whereby the responsibility of the
former as set forth in Articles 1998 to 2001 is
suppressed or diminished shall be void.
Article 2003 was incorporated in the New

Civil Code as an expression of public policy
precisely to apply to situations such as that
presented in this case. The hotel business like
the common carrier’s business is imbued with
public interest. Catering to the public,
hotelkeepers are bound to provide not only
lodging for hotel guests AND security to their
persons and belongings. The twin duty
constitutes the essence of the business. The law in
turn does not allow such duty to the public to be
negated or diluted by any contrary stipulation in
so-called “undertakings” that ordinarily appear in
prepared forms imposed by hotel keepers on
guests for their signature.
Paragraphs (2) and (4) of the “undertaking” manifestly

contravene Article 2003 of the New Civil Code for they
allow Tropicana to be released from liability arising from
any loss in the contents and/or use of the safety deposit
box for any cause whatsoever. Evidently, the undertaking
was intended to bar any claim against Tropicana for any
loss of the contents of the safety deposit box whether or
not negligence was incurred by Tropicana or its employees.
The New Civil Code is explicit that the responsibility
of the hotel-keeper shall extend to loss of, or injury
to, the personal property of the guests even if caused
by servants or employees of the keepers of hotels or
inns as well as by strangers, except as it may
proceed from any force majeure. It is the loss through
force majeure that may spare the hotel-keeper from
liability. In the case at bar, there is no showing that
the act of the thief or robber was done with the use
of arms or through an irresistible force to qualify the
same as force majeure.
GUARANTY
Y
GUARANTY SURETY
an accessory contract
whereby a person
called the guarantor
binds himself to the a contract whereby a
creditor to fulfill the obl. person called the
of the principal debtor surety binds himself
in case the la
atter should SOLIDARILY with th he
fail to do so. principal debtorr.
(Art. 2047 (1) NCC)
GUARANTOR SURETY
1. subsidiarily liable 1. primarily and

absolutely liable
2. pays if debtor 2. pays if debtor DOES
CANNOT pay NOT pay
3. insurer of debtor’s 3. insurer of the DEBT
SOLVENCY
ALLIED BANKING CORP. vs. YUJUICO,

GR 163116, June 29, 2015
The two continuing guaranty agreements contained

identical principal provisions: Xxx (d) should YLTC incur in
default in the payment of the loans, Genbank could
“proceed directly against Jesus Yujuico w/o exhausting
the property of YLTC”; and (e) the “liability of the
signatory to the continuing guaranty would be joint and
several”.
The parties interchangeably used the terms guaranty and
surety in characterizing the undertaking of Jesus under the
guaranty agreements.
Q: Based on the continuing guaranty agreements,

was Jesus Yujuico a guarantor or a surety?
TRADE INVESTMENT DEV. CORP. OF THE

PHILS., et.al. vs ASIA PACES CORP., et.al.,
GR 187403, FEBRUARY 12, 2014
Q: What is the nature of the liability of a

surety?
A: A surety is considered in law as the same

party as the debtor in relation to whatever is
adjudged touching the obligation of the debtor &
their liabilities are interwoven as to be inseparable.
Since the surety is a solidary debtor, it is not required
that the original debtor 1st failed to pay before the
surety could be made liable; it is enough that a demand
for payment be made by the creditor for the surety’s
liability to attach.
PRINCIPLES IN
N GUARA
ANTY:
Art. 2048. A guaranty is GRATUITOUS S, unless
therre is a stipulation to the contrary.
Art. 2052. A guaranty CANNOT EXIST WITHOUT

A VALID OB
BLIGATION;
Art. 2053. A guaranty may also be given as s

security for FUTUREE debts, the amount of
w/c is NOT yet KNOWN but there can be
no claiim against the
e guarantor until the
debt is LIQUIDATED.
5.
Art. 2055 A guaranty is NOT PRESUME ED; it
must be EXPRESS and CANNOT EXTEND
to more than what is stipulated therein.
Art. 2054. A guarantor may bind d himself

for LESS but NOT for MORE than the e
al debtor, BOTH as regards the
principa
AMOUNT and the ONEROUS NATURE
of the condittions.
Should he have bound him mself forr

MORE his obliigation shall be
REDUCED to that of the debtorr.
Art. 2056. QUALIFICATIONS OF GUARANTOR

1. possesses integrity;
2. has the capacity to bind himself;
3. has sufficient property to answer for the
obligation which he guarantees;
4. is subject to the jurisdiction of the
court of the place where the obligation
is to be complied with.
EXCUSSION right of the G to have the

properties of the debtor exhausted
first before the G can be made liable to
the creditor (Art. 2058 NCC).
For the benefit of EXCUSSION, G MUST:

(Art. 2060 NCC)
1. set it up against the CREDITOR upon
the latter’s demand for payment from
him; AND
2. point out to the CREDITOR
available prop. of the DEBTOR
in the Philippines sufficient to
cover the amount of the debt.
NEGLIGENT in exhausting the prop.

pointed out SUFFER THE LOSS
to the extent of said property for the
insolvency of the debtor resulting
from such negligence. (Art. 2061).
“G” NOT ENTITLED TO

EXCUSSION WHEN: (Art. 2059)
1. R - G has expressly renounced the benefit of
excussion;
2. U - it would be useless if it may be presumed
that an execution on the principal debtor’s
property would not result in the
satisfaction of the obligation;
3. S - G has bound himself solidarily with the
principal debtor;
4. I - principal debtor has become insolvent;
5. A - principal debtor has absconded or cannot
be sued w/n the Phil., unless he has left a
manager or representative.
CONTINUING GUARANTY:
¾ NOT limited to a single transaction;

¾ contemplates a future course of
dealing covering a series of
transactions, generally for an indefinite
time or until revoked;
¾ prospective in application; generally
intended to provide security with
respect to future transactions w/n
certain limits; contemplates a
succession of liabilities for w/c as they
accrue, the guarantor becomes liable.
G WHO PAYS FOR DEBTOR MUST BE

INDEMNIFIED by the latter: (Art. 2066)
T 1. Total amount of the debt;
I 2. Interests (legal) from the time payment
was made known to the DEBTOR, even
though it did not earn interest for the
creditor;
E 3. Expenses incurred by the guarantor
after having notified the debtor that
payment had been demanded from him;
D 4. Damages s, if they are due.
EXTINGUISHMENT OF GUARANTY:
1. Same grounds as extinguishment of
ordinary obligations
s (PaLoConMerComNo)
(Art. 2076 NCC);
2. Principal debt is extinguiished;
3. Creditor voluntarily acc

cepts im
mmovable or
other propertyy in payment of the debt,,
even if the creditor sho ould afterwards
lose the same through eviction (Art. 2077
NCC);
4. If the creditor grants an EXTENSION to

the debtor WITHOUT the consent of the
G the guaranty is EXTINGUISHED.
N.B. mere FAILURE OF THE CREDITOR TO

DEMAND PAYMENT from the debtor
after the debt became due DOES NOT
OF ITSELF CONSTITUTE ANY
EXTENSION OF TIME REFERRED TO
HEREIN. (Art. 2079 NCC).
Art. 2084
4 NCC.. A judicia
al
bondsman CANNOT T
DEMA AND the exhaustion of
the property of the
principal debttor..

3 Partnership Agency Loan...

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

3 Partnership Agency Loan...

Uploaded by

Copyright:

Available Formats

ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.

- 2 or more persons may also

2. Co-ownership or co-possession does

3. SHARING OF GROSS RETURNS does

b. as wages of an employee or rent

GENERAL PARTNER LIMITED PARTNER

2. MAY par ticipate in the 2. does NOT par ticipate in

3. may contribute money, 3. can contribute money or

Heirs of JOSE LIM vs. LIM, GR 172690,

Ran the affairs of the partnership wielding absolute

Q: Between Jose & Elfledo, who is the

The following circumstances tend to prove that

2. Contract of partnership having a

Failure to comply with #2 shall

3. Contract of partnership is VOID,

4. It can bring actions.

2. Industrial partner CANNOT engage in

3. Capitalist partners CANNOT engage in

4. In case of imminent loss of the

SHARING OF PROFITS AND

¾ IF P has begun to execute the de

** DESIGNATION OF LOSSES AND

3. Stipulation w/c EXCLUDES one or

3. Any stipulation against the liability laid

GUY vs. ATTY. MICHAEL GACOTT,

Q: Is Guy solidarily liable with the

Article 1816 NCC provides :

All partners, including industrial ones, shall

The partners’ obligation with respect to the

5. IF Partner authorized to manage the

¾ IF receipt was given for the P

6. Partnership books shall be

RIGHTS OF AN ASSIGNEE (Art.1813)

2. Avail of the usual remedies in

DISSOLUTION: the change in the

TERMINATION: the point in time

ORDER OF PAYMENT IN THE

3. partners in respect of capital;

II.. LIMITED PARTNERSHIP

2. limited partners in respect to

4. generaal partners other than

5. geneeral partners in respect to

6. general partners in resp

WHO MAY WIND UP THE P

By the contract of AGENCY

Relationship Between Principal & Agent FIDUCIARY

(1). from the acts of the principal, from his

(2). from the acts of the agent which

2. OBJECT – execution of a juridical act in

3. CAUSE/CONSIDERATION – presumed for

4. AGENT – acts as REPRESENTATIVE of

AGENT MUST ACT:

2. in behalf of his principal (Art. 1882 NCC);

duly authorized agent

Art. 1874. Sale of land by agent

Art. 1877. Agency couched in

Art. 1878 NCC. SPECIAL POWER

4. To waive any obligation gratuitously;

5. To enter into any contract by which

6. To make gifts except customary ones

9. To bind the principal to render some

14. To ratify or recognize obligations

Q: Can an agent appoint a substitute?

EFFECTS OF AGENT’S ACTS: