RULES OF MANAGEMENT

Art. 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.
 RULES OF MANAGEMENT

Two modes of appointing a manager in a partnership:

1. Appointment made in the Articles of Partnership; and

2. Appointment made in an instrument other than the articles of
partnership or made orally.
 RULES OF MANAGEMENT

Appointment in the Articles of Partnership:

(a) Power is irrevocable without just or lawful cause.

THEREFORE:
1) to remove him for JUST cause, the controlling partners
(controlling financial interest) should vote
to OUST HIM. (See Art. 1800, par. 1)

2) to remove him WITHOUT CAUSE, or FOR AN

UNJUST CAUSE, there must be UNANIMITY
(including his own vote).
Appointment in the Articles of Partnership:

Example:

A, B, C and D are partners. The capital contribution of the partners

are as follows:

A- P10,000.00
B– P20,000.00
C– P45,000.00
D- P25,000.00
Total P100,000.00

A was appointed as manager in the Articles of Partnership.

To remove A as manager:

1. For just and lawful causes: The vote of the partners having more
than P50,000.00 of financial interest is needed, i.e., the vote of C
and D or B and C.
Appointment in the Articles of Partnership:

To remove A as manager:

2. WITHOUT CAUSE OR FOR AN UNJUST CAUSE: The vote of

all the partners, A, B, C, and D, is required.
Appointment Other Than in the Articles of Partnership

(a) Power to act may be revoked at any time, with or without

just cause.

(b) Extent of power: As long as he remains manager, he can

perform all acts of ADMINISTRATION
Art. 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.
Example:

A, B, C, D, E, and F are partners. A, B C, and D, were

appointed as managers.

Rule:

1. Each manager may separately execute all acts of

administration;

2. If any of the managers should oppose, the decision of

the majority of the managers shall prevail;

3. In case of tie, the controlling interest shall prevail.

Art. 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.
Art. 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.