Professional Documents
Culture Documents
PARTIES
GENERAL PARTNERSHIP
1. General Partner
2. Industrial Partner (Article 1867)
LIMITED PARTNERSHIP
1. General Partner
2. Industrial Partner
3. Limited Partner (Article 1843)
AGENCY
1. Principal
2. Agent
DEFINITION
PRINCIPAL
PURPOSE/NATURE
Same
Representation
Principles:
A spring cannot
rise higher than its
source. All that the
agent can do is what
TRUST
Article 1440 provides for the parties
in a trust, namely:
1. Trustor The person who
establishes a trust.
2. Trustee - The one in whom
confidence is reposed as regards
property for the benefit of
another person. Basically, he
holds the property in trust for
the benefit of the beneficiary.
3. Beneficiary The person for
whose benefit the trust has been
created.
*NB: The trustor may also be the
beneficiary of the trust.
It is the right to the beneficial
enjoyment of property, the legal
title to which is vested in
another. (65 C.J. 212)
It is a fiduciary relationship
concerning property which
obliges the person holding it to
deal with the property for the
benefit of another. (Pacheco v.
Arro, 85 Phil. 505)
The person holding, in view of
his equitable title, is allowed to
exercise certain powers
belonging to the owner of the
legal title. (54 Am. Jur. 21)
The purpose of the establishment of
a trust is to oblige a person to hold
and manage certain property for the
benefit of another person.
The characteristics of a trust include
the following:
1. Fiduciary relationship
ELEMENTS
CONTRIBUTIONS
CONSIDERATION
Same
Consent
Representation
Authorization
Elements:
Parties to the trust
Subject matter of the trust
Compensation is presumed
until proven otherwise, Art.
1875
PERSONALITY
TYPES/KINDS
As to nature:
As to duration:
18761877
1. Partnership at will
2. Partnership with a term or a particular
undertaking
(Article 1785)
Rule on continuation of partnership when term has expired
or the undertaking is finished:
1. If the partnership is continued without any express
agreement, the rights and duties of the parnters remain the
same.
2. If there is an express agreement, the rights and duties of
the parties are in accordance to the agreement.
As to purpose:
Special powers of
attorney necessary
(Art. 1878)
Special power to sell
does not include
power to mortgage
and vice versa. Art.
1879
Special power to
compromise is not
the same as power
to submit for
arbitration. Art.
1880
(Article 1770)
As to legality/existence:
As to object:
Express Trusts:
Express trusts over 5one5able or
any interests therein must be
written to be enforceable. No
effect as to validity of the
contract. (Art. 1443)
An express trust over personal
property through an oral
agreement is enforceable and
valid between the parties.
No particular words are required
for the creation of an express
trust as long as the intention to
create a trust is clear. (Art. 1444)
The trust is still created even
though the trustee refuses to be
such, unless trustees acceptance
is made a requisite in the
instrument creating the trust.
(Art. 1445)
*NB: The rationale for this is
that the Court will just appoint
another trustee, unless otherwise
stipulated in the trust instrument.
4.
5.
6.
7.
8.
PERFECTION
CONSUMMATION
DUTIES/OBLIGATIO
NS OF PARTIES
Implied Trust
Implied trusts are perfected upon the
satisfaction of all the factual
circumstances provided by law when
creating the same.
Express Trust
An express trust is consummated
when the undertaking for which it
was created has already been
completed or when the period fixed
has already lapsed.
OBLIGATIONS OF
PRINCIPAL:
1. Comply with obligations
Implied Trust
An implied trust is consummated
when the party for which the implied
trust favors acquires the property
held in trust.
OBLIGATIONS OF THE
TRUSTEE: Rule 98 of the Rules of
Court
2.
3.
4.
5.
6.
imposed by contracts
entered into by his
authorized agent in his
behalf Art. 1910
Advance to agent sums
necessary for the
execution of agency
upon the latters request,
Art. 1912
Reimburse agent (with
interest if applicable) if
the latter had advance
sums himself even if
transaction was
unsuccessful, Art. 1912
Indemnify agent for
damages the latter may
have suffered in the
execution of the agency
without fault on the
latters part, Art. 1913
Bound to contract first
signed in a situation
where the object is the
same thing but
transacted to two
different people by the
principal and the agent
respectively, Art. 1916
Not revoke agency if:
a. bilateral
contract
depends on it
b. it is the means
of fulfilling a
pre-existing
contractual
obligation
c. partner, as
agent, is
appointed as
manager and his
removal is
(Article 1846)
PROPERTY RIGHTS
Same
RIGHTS OF AGENT:
1. May retain in pledge the
thing put under his
custody by the principal
if the latter fails to pay
damages/for sums the
former had advanced,
Art. 1914
2. May withdraw from
agency but with due
notice to principal. Art.
1928
3. May withdraw without
notice on the basis of
impossibility of
performance without
grave detriment to
himself, Art. 1928
RIGHTS OF PRINCIPAL:
1. No liability if agent
contravenes his actions
(exception: if avails of
benefits derived from
the contravening actions
of agent), Art. 1918 (1)
2. Not to reimburse agent
if expenses were agents
fault, Art. 1918 (2)
3. Not to reimburse agent
if agent knew of
unfavorable result of his
expense and the
principal was not
informed, Art. 1918 (3)
4. Not to reimburse agent
if agreed that agent
would bear expenses or
if allowed only a certain
sum, Art. 1918 (4)
5. Revoke the agency at
will (expressly or
impliedly), Art. 1920
REIMBURSEMENT
FOR EXPENSES
MULTIPLE
RELATIONS (I.E,
SUBPARTNERS/LIMI
TED
PARTNERS/MULTIPL
E AGENTS, ETC.)
MULTIPLE AGENTS:
1. Bound to the contract
first signed in a situation
where the object is the
same thing but
transacted to two
different people by the
principal and the agent
respectively, Art. 1916
NB: Art. 1916 may also be
applied to a situation where
the object is the same but
transacted to two different
third-parties by two different
agents.
LIABILITY FOR
NEGLIGENCE
LIABILITIES OF
PRINCIPAL:
1. Solidarily liable with
agent if the latter
exceeded his authority
but the former allowed
the agent to act as
though he had authority,
Art.1911
2. Solidarily liable with
other principal for the
same agent undertaking
the same business, Art.
1915
3. Liable to third parties
who suffer damage by
having his contract
rejected in the situation
contemplated in 1916,
Art. 1917
PERSONAL LIABILITY
OF AGENT:
4. Liability for nonperformance, Art. 1884
5. Liable for the acts of
substitute he may
appoint, Art. 1892
6. Liable for fraud or
negligence, to be judged
by courts; rigor depends
on whether
compensation is given
to agent or not, Art.
1909
PRESCRIPTION
RULES (IF
APPLICABLE)
TERMINATION/EXTI
NGUISHMENT
Causes of Dissolution
Causes of dissolution
EXTINGUISHMENT
1. Revocation by principal,
Art. 1919 (1)
2. Withdrawal by agent,
Art. 1919 (2)
3. Death, civil interdiction,
insanity, or insolvency
of either principal or
agent, Art. 1919 (3)
4. Dissolution of firm or
corporation which
entrusted or accepted
agency, Art. 1919 (4)
Express Trusts
- No prescription is applicable
in express trusts as the
trustee does not hold the
subject trust property in the
concept of owner.
- Prescription may set in if he
repudiates the trust
relationship.
Implied Trusts
- For resulting trusts, as there
is intention to create the
trust, generally, such do not
prescribe.
For constructive trusts, they are
subject to prescription.
Express Trusts
Mutual agreement by all the
parties
Expiration of the term
Fulfillment of the resolutory
condition
Rescission or annulment
Loss of subject matter of the
trust (physical loss or legal
impossibility)
Order of the court
Merger
5. Accomplishment of
purpose of agency, Art.
1919 (5)
6. Expiration of period of
contract of agency, Art.
1919 (6)
7. Agency automatically
revoked when directly
manages the business
entrusted to the agent,
dealing directly with
third parties, Art. 1924
8. General power revoked
if special one granted to
another agent if and
only in so far as the
special matter is
involved in the general
matter, Art. 1926
Implied Trusts
Same
Effects of Dissolution
Dissolution terminates the authority of the
partners to bind the partnership, except in the
following matters:
1. Wind up partnership affairs
2. Complete transactions not finished
(Article 1832)
Effects of dissolution
Same
Same
Discharge of Liability
Dissolution does not discharge existing liability of
a partner, except by agreement between:
1. Partner and himself
Discharge of Liability
Same
continued
APPLICABLE LAW
1. Civil Code
2. Special Laws
3. Jurisprudence
4. General Principles of Law that are applicable
5. National Internal Revenue Code
TAXABILITY
1. Civil Code
2. Special Laws
3. Jurisprudence
4. General Principles of Law that are applicable
5. National Internal Revenue Code
1. Civil Code
2. Jurisprudence