1

PARTNERSHIP LAW REVIEWER

University of the Philippines
PARTNERSHIP
it is a CONTRACT whereby two
more persons (1) bind themselves
CONTRIBUTE money, property, or industry
a COMMON FUND (2) with the intention
dividing the PROFITS among themselves or
order to EXERCISE a PROFESSION

or
to
to
of
in

a STATUS and a FIDUCIARY

RELATION
subsisting
between
persons
carrying on a business in common with a view
on profit
CHARACTERISTICS OF THE CONTRACT OF
PARTNERSHIP
[C, C, L, I, AS, NP]
1. CONSENSUAL
perfected by mere consent
2. CONTRIBUTION of money, property or
industry to a COMMON FUND
3. object must be a LAWFUL one
4. INTENTION of
DIVIDING the PROFIT
among the PARTNERS
5. AFFECTIO SOCIETATIS
the desire to formulate an ACTIVE
UNION, with people among whom there
exist a mutual CONFIDENCE and
TRUSTS
6. NEW PERSONALITY
the object must be for profit and not
merely for the common enjoyment
otherwise only a co-ownership has been
formed. HOWEVER, pecuniary profit
need not be the only aim, it is enough
that it is the principal purpose
BUSINESS TRUSTS
when certain persons entrust their
property or money to others who will manage
the same for the former

RULES ON CAPACITY TO BECOME A

PARTNER
1. a person capacitated to enter into
contractual relations may become a
partner
2. an UNEMANCIPATED MINOR CANNOT
become a partner UNLESS his parent
or guardian consents
3. a MARRIED WOMAN, cannot contribute
conjugal funds as her contribution to
the partnership UNLESS she is
permitted to do so by her husband OR
UNLESS she is the administrator of the
conjugal partnership, in which the
COURT must give its consent authority
4. a PARTNERSHIP being a juridical
person by itself can form another
partnership
5. a CORPORATION cannot become a
partner on grounds of public policy
a partner shares not only in profits
but also in the losses of the firm
RULE:

the partnership has a PERSONALITY

SEPARATE and DISTINCT from that of each
partner
CONSEQUENCES OF THE PARTNERSHIP
BEING A JURIDICAL ENTITY
1. its juridical personality is SEPARATE
and DISTINCT from that of each
partner
2. the partnership CAN in GENERAL:
A) acquire and possess property of
all kinds
B) incur obligations
C) bring civil and criminal actions

PARTNERSHIP LAW- SUMMARY

D) can be adjudged insolvent even if

the individual members be each
financially solvent
3. unless he is generally sued, a partner
has no right to make a separate
appearance in court, if the partnership
being sued is already represented
LIMITATIONS ON ALIEN PARTNERSHIP
1) if 60% capital is not owned by Filipinos
the firm cannot acquire by purchase
or otherwise AGRICULTURAL Philippine
lands
2) foreign partnership may lease lands
provided the period does not exceed 99 years
3)
foreign
partnership
may
be
MORTGAGEES of land
period of 5 years, renewable for
another 5 years
they cannot purchase it in a
foreclosure sale
RULES IN CASE OF ASSOCIATIONS NOT
LAWFULLY ORGANIZED AS PARTNERSHIP
1. it possesses NO LEGAL PERSONALITY
it cannot sue as such HOWEVER, the
partners in their individual capacity
CAN
2. one who enters into a contract with a
partnership as such cannot when sued
later on for recovery of the debt, allege
the lack of legal personality on the part
of the firm, even if indeed it had no
personality
ESTOPPEL
whether a partnership has a juridical
personality or not depends on its PERSONAL
LAW of the partnership or the law of the place
where the partnership was organized
REQUISITES
FOR
EXISTENCE
PARTNERSHIP [I, CF, JI]
1. INTENTION to create a partnership

OF

2
2. COMMON
FUND
obtained
from
contributions
3. JOINT INTERESTS in the PROFITS
WHAT
DO
NOT
ESTABLISH
A
PARTNERSHIP
1. mere co-ownership or co-possession
even with profit sharing
2. mere sharing of GROSS returns
even with joint ownership of the
properties involved
RULES TO DETERMINE THE EXISTENCE
OF A PARTNERSHIP
1. persons who are not partners to each
other are not partners as to third
persons
EXCEPTION:
PARTNERSHIP BY ESTOPPEL
2. CO-OWNERSHIP of a property does not
itself establish a partnership, even
though the co-owners share in the
profits derived from the incident of joint
ownership
3. SHARING OF GROSS RETURNS
ALONE does not indicate a partnership
whether or not the persons sharing
them have a joint or common right or
interest in any property from which the
returns are derived
4. the receipt of the share in the profits is
a strong presumptive evidence of
partnership HOWEVER, no such
inference will be drawn if such profits
were received in payment
A) as a DEBT by installments or
otherwise
B) as WAGES of an employee
C) as RENT to a landlord

PARTNERSHIP LAW- SUMMARY

D) as an ANNUITY to a widow or
representative of a deceased
partner
E) as INTEREST on a LOAN, though
the amount of payment vary with
the profits of the business
F) as the CONSIDERATION for the
sale of a GOOD WILL of a
business or other property or
otherwise
creditors are not partners, for their
only interest in the sharing of profits
is the receipt or payment of their
credits
in a partnership, the partners are
supposed to trust and have
confidence in all the partners
PARTNERSHIP BY ESTOPPEL
IF 2 persons not partners represent
themselves as partners to strangers, a
partnership by estoppel results
WHEN 2 persons, who are partners,
in connivance with a friend who is not a
partner inform a stranger that said friend is
their partner, a partnership by estoppel also
result to the end that the stranger should not
be prejudiced
RULE: LAWFUL OBJECT or PURPOSE

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NO need for JUDICIAL DECREE to
dissolve an unlawful partnership
VOID AB INITIO
one of the causes for the dissolution
of a partnership is any event which makes it
unlawful for the business of the partnership to
be carried on
RULE:
when an UNLAWFUL PARTNERSHIP is
dissolved by a judicial decree, the PROFITS
shall be CONFISCATED in FAVOR of the
STATE
G. R.
a partnership may be constituted in any
form
EXCEPTION: PUBLIC INSTRUMENT
1. IMMOVABLE PROPERTY is contributed
2. REAL RIGHTS are contributed
*
need for INVENTORY
IMMOVABLES

of

**
for
EFFECTIVITY
of
the
partnership contract insofar as
innocent
third
persons
are
concerned the same must be
REGISTERED if REAL PROPERTIES
are INVOLVED

a partnership must have LAWFUL

OBJECT or PURPOSE, and must be
established for the common benefit or interest
of the partners

a partnership contract is NOT

CONVERED by the STATUTE of FRAUDS

it must be within the commence of

man, possible and not contrary to law, morals,
good customs, public order or public policy

an AGREEMENT TO
partnership does not itself
partnership

IF a partnership has SEVERAL

PURPOSES, one of which is UNLAWFUL, the
partnership can still validly exist so long as
the illegal purpose can be separated from the
legal purposes

when there are conditions to be

fulfilled or when a certain period is to lapse,
the partnership is not created till after the
fulfillment of the conditions or the arrival of
the term and this is true even if one of the

FORM
create

a
a

PARTNERSHIP LAW- SUMMARY

parties has already advanced his agreed share

of the capital
RULE: if CAPITAL is P3,000 or more
REQUIRED:
1. PUBLIC INSTRUMENT
2. RECORDED S.E.C.
* FAILURE TO COMPLY shall not effect the
liability of the partnership and its members to
third persons
** IF REAL PROPERTIES have been
contributed, REGARDLESS of the VALUE, a
public instrument is needed for the
attainment of legal personality

REQUIREMENTS WHERE IMMOVABLE /

REAL PROPERTY IS CONTRIBUTED
1. PUBLIC INSTRUMENT
2. INVENTORY signed and attached to
the P.I.
* applies regardless of the value of the
real property
* applies even if only real rights over
the real property are
contributed
* applies if aside from real property,
cash or personal property is
contributed
TRANSFER of land to the partnership must
be duly recorded in the ROD to make the
transfer effective insofar as third persons are
concerned
RULE:
any immovable property or an interest
therein maybe acquired in the partnership
name
title so acquired can be conveyed only in the
partnership name
IF the partnership has ALIENS, it CANNOT
OWN LANDS, whether public or private or

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whether agricultural or commercial EXCEPT
through HEREDITARY SUCCESSION

LIMITATIONS ON ACQUISITION
1. AGRICULTURAL
LANDS

1024
HECTARES
2. lease of public lands (GRAZING) 2000
HAS.
RULES
IF
A) articles are kept secret
among the members
B) any one of the members may
contract in his own name
with third persons
1. NOT a partnership NOT a LEGAL
PERSON
2. it may be sued by third person under
the common name it uses
3. it cannot sue as such and cannot be
ordinarily be a party to a civil action
4. insofar as innocent third parties are
concerned
the parities can be considered as
members of a partnership
5. as between themselves or insofar as
third persons are prejudiced
only the rules of co-ownership must
apply
EFFECT OF CERTAIN TRANSACTIONS
1. contracts entered into by a partner in
his own name may be sued upon still
by him in his individual capacity, not
withstanding
the
absence
of
a
partnership
2. when two or more individuals, having a
common interests in a business bring
a court action, it should be presumed
that they prosecute the same in their
individual capacity as co-owners and
not in behalf of a partnership which
does not exist in legal contemplation

PARTNERSHIP LAW- SUMMARY

CLASSIFICATION OF PARTNERSHIPS
A) ACCORDING TO MANNER OF CREATION
1. ORALLY constituted
2. constituted
in
a
PRIVATE
INSTRUMENT
3. constituted
in
a
PUBLIC
INSTRUMENT
4. REGISTERED S.E.C.
B) ACCORDING TO OBJECT
1. UNIVERSAL
2. PARTICULAR
C) ACCORDING TO LIABILITY
1. LIMITED PARTNERSHIP
2. GENERAL PARTNERSHIP
D) ACCORDING TO LEGALITY
1. LAWFUL OR LEGAL
2. UNLAWFUL OR ILLEGAL
E) ACCORDING TO DURATION
1. for a SPECIFIC PEIOD or FIXED
PERIOD
2. PARTNERSHIP AT WILL
F) ACCORDING TO REPRESENTATION TO
OTHERS
1. ORDINARY PARTNERSHIP
2. PARTNERSHIP BY ETOPPEL
G) AS TO LEGALITY OF EXISTENCE
1. DE JURE PARTNERSHIP
2. DE FACTO PARTNERSHIP
H) AS TO PUBLICITY
1. SECRET PARTNERSHIP
2. NOTORIOUS / OPEN PARTNERSHIP
I) AS TO PURPSE
1. COMMERCIAL / TRADING
2. PROFESSIONAL / NON-TRADING

GENERAL PARTNERSHIP
one where all the partners are general
partners
they are LIABLE even with respect to their
individual properties, after the assets of the
partnership has been exhausted
LIMITED PATNERSHIP
one where at least one partner is a general
partner and the others are limited partners

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one whose liability is limited only up to the
extent of his contribution
a partnership where all the partners are
limited partners cannot exist as a limited
partnership
REFUSED REGISTRATION
IF it continuous as such, it will be
considered as a general partnership and all
the
partners will be general partners
KINDS OF UNIVERSAL PARTNERSHIP
1. PARTNERSHIP OF ALL PRESENT
PROPERTY
2. PARTNERSHIP OF ALL PROFITS

*UNIVERSAL
PARTNERSHIP
OF
ALL
PRESENT PROPERTY
CONTRIBUTION of
1. ALL
the
properties
actually
belonging to the partners
2. the PROFITS acquired with said
property
BECOMES COMMON PROPERTY
EXCEPT all FUTURE PROPERTY
FRUITS of FUTURE PROPERTY
INCLUDED IF STIPULATED UPON

*UNIVERSAL PARTNERSHIP OF PROFITS

comprises all that the partners may acquire
by the INDUSTRY or WORK of the partners
become common property regardless of within
said profits were obtained through the
usufruct contributed
EXCEPT PRIZES and GIFTS
RULE:
articles of universal partnership, entered
without specification of its nature, only
constitute a universal partnership of PROFITS
RULE:

PARTNERSHIP LAW- SUMMARY

 persons who are prohibited from giving each

other any donation or advantage cannot enter
into universal partnership
WHO:
1. HUSBAND and WIFE
2. those
guilty
of
ADULTERY
or
CONCUBINAGE
3. those guilty of the same criminal
offense if the partnership was entered
into in consideration of the same
while spouses cannot enter into a universal
partnership, they can enter into a particular
partnership or be members thereof
a universal partnership is virtually a
donation to each other of the partners
properties or at least their usufruct

PARTICULAR PARTNERSHIP

a particular partnership has for its

OBJECT:
1. DETERNMINATE THINGS their use or
fruits
2. SPECIFIC UNDERTAKING
3. EXERCISE of a PROFESSION or
VOCATION
OBLIGATIONS OF THE PARTNERS
RULE:
a PARTNERSHIP BEGINS from the moment
of the EXECUTION of the CONTRACT
* even if contributions have not yet been
made the firm already exists, for partnership
is a consensual contract
DURATION OF PARTNERSHIP
UNLIMITED
* MAY BE AGREED UPON
1. EXPRESSLY definite period
2. IMPLIEDLY upon achievement of
its purpose

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PARTNERSHIP AT WILL

a partnership wherein its continued

existence really depends upon the will of the
partners or even on the will of any of them
2 KINDS:
1. when there is no term, express or
implied
2. when it is continued by the habitual
managers although the period has
ended or the
purpose has been
accomplished
3
IMPORTANT
DUTIES
OF
EVERY
PARTNER [C, D-F, W]
1. duty to CONTRIBUTE what had been
promised
2. duty to DELIVER the FRUITS of what
should have been delivered
3. duty to WARRANT
RIULES ON THE DUTY TO CONTRIBUTE
1. the contribution must be made at the
time the partnership is entered into
UNLESS a different period is stipulated
2. no demand is needed to put the partner
in default
3. the partner must exercise due diligence
in preserving the property to be
contributed
before
he
actually
contributes the same
4. a partner who promises to contribute to
the partnership becomes a promissory
debtor of the partnership
RULES ON THE DUTY TO DELIVER THE
FRUITS
1. IF property has been promised, the
fruits thereof should also be given
2. the fruits referred to are those arising
from the time they should have been

PARTNERSHIP LAW- SUMMARY

delivered,
demand

without

need

of

any

3. IF the partner is in BAD FAITH, he is

liable not only for the fruits actually
produced, BUT also for those that could
have been produced
4. IF MONEY HAS BEEN PROMISED,
INTEREST and DAMAGES from the
time he should have complied with his
obligation should be given
5. NO DEMAND is needed to put the
partner in default
6. it is DELIVERY, actual or constructive
that TRANSFERS OWNERSHIP
RULES ON THE DUTY TO WARRANT
1. the warranty in case of eviction refers
to specific and determinate things
already contributed
2. there is EVICTION whenever by a final
judgment based on a right prior to the
sale or an act imputable to the partner,
the partnership is deprived of the whole
or a part of the thing purchased
RULE WHEN CONTRIBUTION CONSISTS OF
GOODS
APPRAISAL of VALUE is needed to
determine how much was contributed
HOW APPRAISAL MADE
1. as PRESCRIBED in the CONTRACT
2. in default, by EXPERTS chosen by the
partners, and at CURRENT PRICES
* necessity of the INVENTORY
APPRAISAL
RULE on RISK of LOSS
after goods have been contributed, the
partnership bears the risk of subsequent
changes in the value

7
RULE:
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
CAPITALIST PARTNER
one who FURNISHES CAPITAL
* NOT EXEMPTED from LOSSES
* he can engage in other business
PROVIDED there is no competition
between the partnership and his business
* share in the profits according to
agreements
INDUSTRIAL PARTNER
one who FURNISHES INDUSTRY or
LABOR
* he is EXEMPTED from LOSSES as
between the partner BUT liable to
strangers
without
prejudice
to
reimbursement from the capitalist partner
* he CANNOT engage in any other
BUSINESS
WITHOUT
the
express
CONSENT
of
the
other
partners,
OTHERWISE
1. he can be EXCLUDED from the firm
- plus damages
OR
2. the BENEFITS he obtains from the
other businesses CAN BE AVAILED of
by the other partners
- plus damages

whether
or
not
there
is
COMPETITION
* in computing always look for ----- NET
PROFITS
----- NET
LOSSES
CAPITALIST INDUSTRIALIST PARTNER
one who contributes BOTH CAPITAL and
INDUSTRY
GENERAL PARTNER

PARTNERSHIP LAW- SUMMARY

 one who is liable beyond the extent of his

contribution
LIMITED PARTNER
one who is liable only to the extent of his
contribution
*** an industrial partner can only be a
general partner, never a limited partner
MANAGING PARTNER
one who manages actively the firms affairs
SILENT PARTNER
one who does not participate in
management, though he shares in
PROFITS or LOSSES

the
the

LIQUIDATING PARTNER
one who winds up or liquidates the affairs of
the firm after it has been dissolved
OSTENSIBLE PARTNER
one whose connection with the firm is public
and open
SECRET PARTNER
one whose connection with the firm is
concealed or kept secret
DORMANT PARTNER
one who is both a secret (hidden) and silent
(not managing) partner
NOMINAL PARTNER
one who is not really a partner BUT who
may become liable as such insofar as third
persons are concerned
RULE:
partners shall CONTRIBUTE EQUAL
SHARES to the capital of the partnership
* it is permissible to contribute UNEQUAL
SHARES IF there is a stipulation to this effect

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* in the absence of proof, the shares are
presumed to be equal
CONDITIONS before a capitalist partner is
obliged to sell his shares / interest to the
other partners [IL, RC, NA]
1. if there is IMMINENT LOSS of the
BUSINESS of the partnership
2. he REFUSES to
CONTRIBUTE an
ADDITIONAL SHARE to the CAPITAL
3. there is no agreement to the contrary
* INDUSTRIAL PARTNER IS EXEMPTED

*RULE if MANAGING PARTNER COLLECTS

A CREDIT
REQUISITES:
1. existence of at least 2 debts ----
PARTNERSHIP
----
PARTNER
2. both sums are demandable
3. the collecting partner is the managing
partner
* the sum thus collected shall be applied
to the two credits in
proportion to their amounts
RULE:
* where a partner receives his share in the
partnership credit
CONDITIONS:
1. a partner has received his share in the
partnership credit in whole or in part
2. the other partners have not collected
their part of the credit

PARTNERSHIP LAW- SUMMARY

3. the debtor
INSOLVENT

subsequently

becomes

9
FIRM bears the loss because this has
the effect of an implied sale

RULE: - the partner shall be obliged to

bring to the partnership
capital what he received even though he
may have given receipt for
his share only
* DOES NOT APPLY when debt was collected
after dissolution of the partnership
RULE:
* every partner is responsible to the
partnership for damages suffered by it
through his fault
* he cannot compensate them with the
profits and benefits, which he may have
earned for the partnership by his industry
* the courts may equitably lessen his
responsibility

RES PERIT DOMINO

*RULES ON WHO BEARS THE RISK OF
LOSS
1. if
SPECIFIC
and
DETERMINATE
THINGS
NOT
FUNGIBLE
whose
USUFRUCT is enjoyed by a firm
the PARTNER who OWNS it bears
the loss for ownership was never
transferred to the firm
2. FUNGIBLE or DETERIORABLE
FIRM bears the loss for it is evident
ownership was transferred
3. THINGS CONTRIBUTED to be SOLD
FIRM bears the loss for evidently the
firm was intended to be the owner
4. CONTRIBUTED under APPRAISAL

RULE on RESPONSIBILITY of the FIRM

1. to REFUND amounts disbursed on
behalf of the firm plus legal interest
from the time expenses where made
2. to ANSWER to each partner for
OBLIGATIONS he may have entered
into in good faith in the interest of the
partnership, as well as the risks in
consequence of its management
* REFUND must be made even in case of
failure of the enterprise entered into, provided
the partner is not at fault
* AMOUNT DISBURSED does not refer to
the ORIGINAL CAPITAL
*HOW PROFITS ARE DISTRIBUTED
1. according to AGREEMENT
2. IF NONE, according to amount
CONTRIBUTION

of

*HOW LOSSES are DISTRIBUTED

1. according to AGREEMENT as to losses
2. IF NONE, according to agreement as to
PROFITS
3. IF NONE, according to amount of
CONTRIBUTION
* an INDUSTRIAL PARTNER shall receive a
JUST and EQUITABLE share in the profits
*RULE
on
INDUSTRIAL
PARTNERS
LIABILITIES
- may be held liable by third persons BUT he
may recover what he has paid from the other
capitalist partners

PARTNERSHIP LAW- SUMMARY

10
*RULE on DESIGNATION by THIRD PERSON
of SHARES in PROFITS and LOSSES
* third person is NOT a PARTNER --
appointed to only distribute shares

MAJORITY RULE
IN CASE OF A TIE
- persons owning controlling interest
prevail provided they are also managers

* the designation of shares by third persons

may be IMPUGNED, IF it is MANIFESTLY
INEQUITABLE
* the designation of shares by third persons
CANNOT
be
IMPUGNED
EVEN
IF
MANIFESTLY INEQUITABLE IF:
1. the aggrieved partner has already
BEGUN to EXECUTE the decision
2. the
aggrieved
partner
has
not
IMPUGNED the distribution within 3
months he had knowledge

* right to oppose is not given to NONMANAGERS

* OPPOSITION should be done BEFORE the
acts produce legal effects insofar as third
persons are concerned

*RULE IF APPOINTMENT OTHER THAN in

the ARTICLES of PARTNERSHIP
1. power to act may be REVOKED at ANY
TIME with or without just cause
REMOVAL should be done by the
controlling interest
2. EXTENT of POWER
as long as he remains manager, he can
perform all acts of administration
BUT if others oppose and he persists, he
can be removed
*RULE WHEN there are 2 or MORE
MANAGERS
CONDITIONS:
1. 2 or more partners are managers
2. there is no specification of respective
duties
3. there is no stipulation requiring
UNANIMITY
SPECIFIC RULES:
1. each may separately execute all acts of
administration
UNLIMITED POWER to ADMINISTER
2. IF any of the managers OPPOSE

RULE WHEN UNANIMITY is REQUIRED

1. the CONCURRENCE of all shall be
necessary for the validity of the acts
2. the ABSENCE or DISABILITY of
ANYONE
of
them
CANNOT
BE
ALLEGED UNLESS there is imminent
danger of grave or irreparable injury to
the partnership
RULE ON DUTY of THIRD PERSONS
third persons are not required to inquire as
to whether or not a partner with whom he
transacts has the consent of all the managers
*RULES to be observed when the manner of
management has not been agreed upon:
1. all the partners are considered AGENTS
whatever any one of them may do
alone shall not bind the partnership
2. IF the acts of one are opposed by the
rest, the majority shall prevail
3. when a partner acts in his OWN NAME,
he does not bind the partnership
4. authority to bind the firm does not
apply if somebody else has been given
authority to manage in the articles of
organization or through some other
means
5. ALTERATIONS REQUIRE UNANIMITY

PARTNERSHIP LAW- SUMMARY

- IMMOVABLE partnership property

- BUT if the refusal to consent by the
others is prejudicial to the interest of
the partnership
- COURTS INTERVENTION may be
sought
RULES on ASSOCIATE of PARTNER
1. every partner may associate another
person with him in his share
2. for a partner to have an associate in his
share
consent of all the other partners is
NOT REQUIRED
3. for the associate to become a partner
ALL MUST CONSENT

RULES on PARTNERSHIP BOOKS

1. kept at the principal place of business
of the partnership
2. at any reasonable hour, every partner
shall have access to and may inspect
and copy any of them
DUTY
of
PARTNERS
TO
GIVE
INFORMATION
good faith not only requires that a partner
should not make any FALSE CONCEALMENT,
BUT he should abstain from all concealment
DUTY to ACCOUNT [B, P, U-P]
every partner must account to the partnership
1. any benefit acquired
2. any profits received
3. any use of partnership property
RIGHT TO DEMAND a FORMAL ACCOUNT
any partner shall have the right to a formal
account as to partnership affairs
1. if wrongfully excluded from partnership
BUSINESS

11
2. if wrongfully excluded from partnership
PROPERTY by his co-partners
3. if the right exists under the terms of
agreement
4. if the other partner receives other
benefits, profits or uses partnership
property
5. whenever other circumstances render it
just and reasonable
* the right to demand an accounting exists as
long as the partnership exists
* prescription begins to run only upon the
dissolution of the partnership when the final
accounting is done
PROPERTY RIGHTS OF PARTNERS [P, I, M]
1. rights
in
specific
PARTNERSHIP
PROPERTIES
2. INTERESTS in the PARTNERSHIP
3. right
to
PARTICIPATE
in
the
MANAGEMENT
RULE:
* a partner is CO-OWNER with his partners
of SPECIFIC PARTNERSHIP PROPERTY
* RIGHTS of a PARTNER in SPECIFIC
PARTNERSHIP PROPERTY
1. he has equal rights with his partners to
POSSESS the property BUT only for
PARTNERSHIP PURPOSES
he may possess such property for
other purposes PROVIDED the other
partners expressly or impliedly gives
their CONSENT
2. he CANNOT ASSIGN his right to the
property
EXCEPT if all the other
partners assign their rights in the same
property
3. his right
SUBJECT

to the property is NOT

to
ATTACHMENT
or

PARTNERSHIP LAW- SUMMARY

EXECUTION, EXCEPT
against partnership

on

claim

12

NOT

RIGHTS of the ASSIGNEE

1. to get whatever profits the assignorpartner would have obtained

* if there is PARTNERSHIP DEBT, the specific

property can be attached

2. to avail himself of the usual remedies in

case of fraud in the management

4. his right to the property is

SUBJECT to LEGAL SUPPORT

RULE:
* a PARTNERS INTEREST in the partnership
is his SHARE of the PROFITS and SURPLUS
IT CAN BE: [A, A, LS]
1. ASSIGNED
2. ATTACHED
3. be subject to LEGAL SUPPORT
*EFFECTS of CONVEYANCE by PARTNER of
his INTEREST in the PARTNERSHIP
1. IF he conveys his WHOLE INTEREST
A) partnership may still remain
B) partnership may be dissolved
* mere conveyance does not
dissolve the partnership
2. the ASSIGNEE does not necessarily
become a partner
the ASSIGNOR is still the partner,
with a right to demand accounting and
settlement
3. the ASSIGNEE CANNOT interfere in the
MANAGEMENT or ADMINISTRATION of
the firm
the ASSIGNEE CANNOT also DEMAND
[I, A, I]
A) INFORMATION
B) ACCOUNTING
C) INSPECTION
of
partnership
books
*** while a partners INTEREST in the firm
may be CHARGED or LEVIED upon, his
INTEREST in a specific firm PROPERTY
CANNOT be attached.

3. to ask for ANNULMENT of the contract

of assignment IF:
A) he was induced to enter into it
through any of the vices of consent
OR
B) he himself was incapacitated to give
consent
4. to demand an accounting BUT only if
the partnership is dissolved

PREFERENTIAL RIGHTS of PARTNERSHIP

CREDITORS
* partnership creditors are entitled to
PRIORITY over partnership assets, including
the partners interest in the profits
** SEPARATE or INDIVIDUAL creditors have
PREFERENCE in separate or individual
properties
* when the CHARGING ORDER is applied for
and granted, the court may appoint a receiver
of the partners share in the profits
the receiver appointed is entitled to any
relief necessary to conserve the partnership
assets for partnership purposes
* interest charged may be redeemed at any
time before foreclosure
* AFTER FORECLOSURE the interest may still
be redeemed by (without causing dissolution)
1. with separate property, by any one or more
of the partners
OR

PARTNERSHIP LAW- SUMMARY

2. with partnership property, by any one or

more partners with the consent of all the
partners whose interests are not so charged or
sold
* consent of the delinquent partner not
needed
RULE:
every partnership shall operate under a
FIRM NAME
* the firm name may or may not include
the name of one or more of the partners
** STRANGERS who include their names in
the firm are liable as partners because of
ESTOPPEL, BUT do NOT have the RIGHTS of
partners

13
*RULE on LIABILITY of a PARTNER who has
WITHDRAWN
1. a partner who withdraws is not liable
for liabilities contracted after he has
withdrawn
2. if his interest has not yet been paid him
his right to the same is that of a mere
creditor
** a stipulation exempting liability to third
persons is VOID
* any partner may enter into a separate
obligation to perform a partnership contract

** IF a LIMITED PARTNER includes his name

in the firm name, he has obligations BUT not
the rights of a general partner

RULE:
* every partner is an agent of the
partnership for the purpose of its business

RULE on LIABILITY for CONTRACTUAL

OBLIGATIONS
* all partners, including industrial ones, shall
be liable pro-rata with all their property and
after all the partnership assets have been
exhausted

G.R.- the act of every partner for apparently

carrying on in the USUAL WAY the business of
the partnership of which he is member binds
the partnership
EXCEPT:
1. if he has NO AUTHORITY
and
2. the person with whom he was dealing with
HAS KNOWLEDGE of the fact that he has no
such authority

* NOT APPLICABLE for TORTS or CRIMES

----- LOSS
---- INJURY
---- MISAPPROPRIATION
** while an INDUSTRIAL PARTNER is
exempted by law from LOSSES as between the
partners, he is NOT EXEMPTED from liability
insofar as third persons are concerned
he may recover what he has paid from
the CAPITALIST partners
* under the law the liability of the partners is
subsidiary and joint NOT principal and
solidary

RULE:
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
* a partnership is a CONTARCT of MUTUAL
AGENCY, each partner acting as a principal
on his own behalf and as an agent for his copartners or the firm
REQUISITES on WHEN can a partner BIND
the partnership

PARTNERSHIP LAW- SUMMARY

1. expressly or impliedly AUTHORIZED

2. when he acts in BEHALF AND IN THE
NAME of the partnership
INSTANCES of IMPLIED AUTHORIZATION
1. when the other partners DO NOT
OBJECT,
although
they
have
knowledge of the act
2. when the act is for apparently carrying
on in the usual way the business of the
partnership
* this is binding on the firm even if
the partner was not really authorized
PROVIDED that the third party is in
GOOD FAITH
RULE on UNUSUAL ACTS
one or more but less than all the partners
HAVE NO AUTHORITY TO:
[AP, DG, AI, CJ, EC, SA, RC]
1. ASSIGN the PARTNERS PROPERTY
2. DISPOSE of GOODWILL
3. do any other act which would make it
impossible to carry on the ordinary
business of the partnership
4. CONFESS a judgment
5. ENTER into a COMPROMISE
6. SUBMIT to ARBITRATION
7. RENOUNCE to CLAIM
*RULES
on
PROPERTY

CONVEYANCE

of

14
2. if property was conveyed to a
HOLDER for VALUE and who
had NO KNOWLEDGE of the
partners LACK of AUTHORITY
2.
where title is in the name of the
partnership and partner sold in his OWN
NAME
IF DONE IN USUAL BUSINESS
buyer does not become owner BUT
ACQUIRES EQUITABLE INTEREST
IF NOT DONE IN USUAL BUSINESS
buyer does not become owner and
is not even entitled to equitable interest

3. where title is in the name of one or more

BUT not all the partners
partners in whose name the title is
named
MAY
CONVEY
BUT
the
PARTNERSHIP
may
RECOVER
such
property IF done not in its USUAL
BUSINESS EXCEPT if he had transferred
it to a Holder for value
4. when property held in trust by partner

REAL

1. 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
* PARTNERSHIP MAY RECOVER SUCH
PROPERTY
EXCEPT:
1. if the firm is engaged in the
buying and selling of land
(USUAL BUSINESS)

a sale only conveys EQUITABLE

INTEREST
5. when title is in the name of all partners
conveyance executed by all partners
possess all rights of such property
EQUITABLE INTEREST
-BENEFICIAL INTEREST, BUT NOT
NAKED OWNERSHIP
*RULE
on
ADMISSION
or
REPRESENTATION MADE by a PARTNER

PARTNERSHIP LAW- SUMMARY

 an admission by a partner is an admission

against the partnersip,under the following
conditions:
1. the
admissions
must
concern
partnership affairs
2. must be within the scope of his
authority
RESTRICTIONS ON THE RULE:
1. admissions
made
BEFORE
DISSOLUTION are binding only when
the partner has authority to act on the
particular matter
2. admissions
made
AFTER
DISSOLUTION are binding only if the
admissions were necessary to WIND UP
the business
3. an admission made by a former partner
made after he has RETIRED from the
partnership is not evidence against the
firm
EFFECT of NOTICE to a PARTNER
notice to a partner is notice to the
partnership
*notice to a partner, given while already a
partner is a notice to the partnership
PROVIDED it relates to partnership affairs
EFFECT of KNOWLEDGE ALTHOUGH NO
NOTICE WAS GIVEN:
* knowledge of the partner is also knowledge
of the firm PROVIDED THAT:
1. the knowledge was acquired by a
partner who is acting in the particular
matter involved;and
2. the partner having knowledge, had
reason to believe that the fact related to
a matter which had some possibility of
being the subject of the partnership
business AND he was so situated that

15
he could communicate it to the partner
acting on that particular matter
* SERVICE of PLEADINGS on the partner in
a law firm is also service on the whole firm
and the other partners

LOSS OR INJURY
RULE on WRONGFUL ACT or OMISSION of a
PARTNER (SOLIDARY LIABILITY)
* the partnership is solidarily liable with the
partner if the wrongful act or omission
1. the partner is acting in the ordinary
course of business of the partnership
OR
2. with authority of his co-partners
* innocent partners have right to recover
from the guilty partner
* When the firm and other partners not
liable:
1. if the wrongful act or omission was NOT
DONE
A) within scope of partnership
business
B) with authority of the other copartners
2. if the act
WRONGFUL

or

omission

is

NOT

3. if the act or omission, although

wrongful did not make the partner
concern liable
- DAMNUN ABSQUE INSURIA
4. if the wrongful act or omission was
committed after the firm had been
dissolved and the same was not in

PARTNERSHIP LAW- SUMMARY

connection with the process of winding

up.
LIABILITY
of
PARTNERSHIP
for
MISAPPROPRIATION

(SOLIDARY
LIABILITY)
1. RECEIVING PARTY MISAPPROPRIATES
2. ANY PARTNER MISAPPPROPRIATES
- money or property in custody of
partnership
PARTNER BY ESTOPPEL
a person who represents himself or
consents to another / others representing him
to anyone as a partner either in an existing
partnership or in one that is fictitious or
apparent
PARTNERSHIP BY ESTOPPEL
when all the members of the existing
partnership consent to such representation of
a partner by estoppel
RULES AND SITUATIONS:
1. if a third person is misled and acts
because of such misrepresentation
the deceiver is a partner by estoppel
2. if the partnership consented to such
misrepresentation
partnership liability results
3. if the firm had not consented
no partnership liability results BUT
the deceiver is considered still as a
partner by estoppel with all the
obligations but not the rights of a
partner
4. when a person represents himself as a
partner of a NON-EXISTENT partnership
NO partnership liability results BUT
the deceiver and all persons who may
have
aided
him
in
the
misrepresentation are still liable

16
liability would be JOINT or PRORATA
* when although there is misrepresentation,
if the third party is not deceived, the doctrine
of estoppel does not apply
BURDEN of PROOF
the creditor or whoever alleges the existence
of a partner or partnership by estoppel has
the burden of proving the existence of the
MISREPRESENTATION
AND
INNOCENT
RELIANCE on it
ENTRY OF A NEW PARTNER into an
EXISTING PARTNERSHIP
RULE:
* he shall be liable for all the obligations of
the partnership BUT his liability will extend
only to his share in the partnership property
* his own individual property shall be
excluded
* same liability of a limited partner
PREFERENCE
of
PARTNERSHIP
CREDITORS
RULE:
* the creditors of the partnership shall be
preferred to those of such 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
**IF a partner sells his share to a third
party, BUT the firm itself still remains
SOLVENT, partnership creditors CANNOT
assail the validity of the sale by alleging that it
is made in fraud of them, since they have not
really been prejudiced

PARTNERSHIP LAW- SUMMARY

DISSOLUTION AND WINDING UP

the change in the relation of the partners
caused by any partner causing to be
associated in the carrying on of the business
it is the point of time the partners cease to
carry on the business together
WINDING UP
the process settling business affairs after
dissolution
TERMINATION
the point in time after all the partnership
affairs have been wound up
RULE ON DISSOLUTION
* on dissolution the partnership is not
terminated BUT continues until the winding
up of partnership affairs is completed
*EFFECT on OBLIGATIONS
1. just because a partnership is dissolved
this does not necessarily mean that a
partner can evade previous obligations
entered into by the partnership
2. dissolution saves the former partners
from new obligations to which they have
not expressly or impliedly consented
UNLESS the same be essential for
winding up
*CAUSES OF DISSOLUTION
1. without
VIOLATION
of
the
AGREEMENT between the partners
A) TERMINATION of the DEFINITE
TERM
or
PARTICULAR
UNDERTAKING
B) EXPRESS WILL or ANY PARTY in
GOOD FAITH (PARTNERSHIP by
WILL)
C) EXPRESS WILL of ALL of the
PARTNERS except those who
have (interests) ASSIGNED or
whose
interests
have
been
(separate debts) CHARGED

17

2.

3.
4.

5.
6.
7.
8.

D) EXPULSION in good faith of a

member
in CONTRAVENTION of the agreement
between the partners
by the EXPRESS WILL of ANY
PARTNER at any time
UNLAWFULNESS of the BUSINESS
LOSS thing promised
A) SPECIFIC THING PERISHES
before delivery
B) USUFRUCT is lost EXCEPT if
ownership had been transferred
to the partnership
DEATH of ANY partner
INSOLVENCY of any partner or of the
partnership
CIVIL INTERDICTION of any partner
DECREE of COURT

*** if the cause is not justified or no cause

was given, the withdrawing partner is liable
for DAMAGES BUT in no case can he be
compelled to remain in the firm
* the insolvency need not be judicially
declared, it is enough that the assets be less
than the liabilities
DISSOLUTION by JUDICIAL DECREE WHEN
ALOWED:
(I, UM, I-PP, C, PB, BL, OC)
1. partner declared insane in any
judicial proceeding or is shown to be of
UNSOUND MIND
2. partner
becomes
INCAPABLE
of
performing his part of the partnership
contract
3. partner has been guilty of such
CONDUCT
as
tends
to
affect
prejudicially the business
4. partners PERSISTENT BREACH of
agreement
5. the business of the partnership can
only be denied on at a loss

PARTNERSHIP LAW- SUMMARY

6. other circumstances
dissolution equitable

which

render

IN CASE OF PURCHASER of PARTNERS

INTEREST
1. after the termination of the specified
term or particular undertaking
2. AT ANY TIME, if the partnership was a
partnership at will when the interest
was assigned or when the charging
ordered was issued
* proof as to the existence of the firm must
first be given

18
EXCEPTION: - individual liabilities
1. if dissolution by ACT
the partner acting for the partnership
HAD KNOWLEDGE of the dissolution
OR
2. if
dissolution
by
DEATH
or
INSOLVENCY
the partner acting for the partnership
HAD knowledge or notice of the death or
insolvency
* only the partner acting assumes liability

* even if a partner has not yet been

previously declared insane by the court,
dissolution may be asked, as long as the
insanity is duly proved in court

*AFTER DISSOLUTION, a partner can still

bind the PARTNERSHIP
(WU, UT, TB)
1. By any ACT appropriate for WINDING
UP partnership affairs

* in a suit for dissolution, the court may

appoint a RECEIVER at its discretion

2. By
COMPLETING
transactions
UNFINISHED at dissolution

EFFECTS OF DISSOLUTION
RULE:
* when the firm is dissolved, a partner can
no longer bind the partnership
* a dissolved partnership still has the
personality for the winding up of its affairs
the firm is still allowed to collect
previously acquired credits
the firm is still bound to pay of its
debts
DISSOLUTION CAUSED by A-I-D
RULE: (STILL BOUND) as to each partners
G.R. where the dissolution is caused by the
ACT, INSOLVENCY or DEATH of a partner,
each partner is liable to his co-partners for his
share of any liability created by any partner
acting for the partnership

3. By any TRANSACTION which could

bind the partnership IF dissolution had
not taken place PROVIDED the other
party is:
A) PREVIOUS CREDITOR and had
NO KNOWLEDGE or NOTICE of
the dissolution
OR
B) NOT a PREVIOUS CREDITOR,
had
NO
KNOWLEDGE
or
NOTICE and dissolution was
NOT PUBLISHED
* if there was publication of the
dissolution it is presumed he already
knows, regardless of actual knowledge on
non knowledge
WHEN is the PARTNERSHIP NOT BOUND
1. new business with third parties who
are in bad faith
2. firm dissolved because UNLAWFUL
except for acts of winding up
3. partner who acted became INSOLVENT

PARTNERSHIP LAW- SUMMARY

4. partner not authorized to wind up

EXCEPT if customer in good faith
* if after dissolution, if a stranger will
represent himself as a partner although he is
not one he will be a partner by estoppel
RULE:
* the dissolution of the partnership does not
itself discharge the existing liability of any
partner
NEED for an AGREEMENT BETWEEN
1. partner concerned
2. other partners
3. creditors

RULE:
* the INDIVIDUAL PROPERTY of a
DECEASED PARTNER shall be liable for all
obligations of the partnership incurred while
he was a partner BUT subject to prior
payments of his separate debts
* IF there be a NOVATION of the OLD
PARTNERSHIP DEBTS and such novation is
done after one of the partners has retired
and without the consent of such partner
said partner cannot be held liable by
creditors who made the novation with
knowledge of the firms dissolution
EXTRAJUDUCIAL AND JUDICIAL WINDINGUP
EXTRAJUDICIAL:
1. by the partners who have not
wrongfully dissolved the partnership
2. by the legal representative of the last
surviving partners
JUDICIAL:
under the control and direction of the
court, upon proper cause that is shown to the
court

19
* profits that will actually enter the firm
after dissolution as a consequence of
transactions already made before dissolution
are included because they are considered as
profits existing at the time of dissolution
* any other income earned after the time,
like interest or dividends on stock owned by
the partners or partnership at the time of
dissolution should not be distributed as
profits BUT as merely additional income to the
capital
BETTER RIGHTS of INNOCENT PARTNERS
innocent partners have better rights than
guilty partners and that the guilty partners
are required to indemnify for the damages
caused

* RIGHT of INOCENT PARTNERS TO

CONTINUE the BUSINESS
in essence this is a new partnership
can use the same firm name
can ask new members to join
BUT shall: for protection of guilty partners
1. give a BOND approved by the court
2. to PAY guilty partners his interests at
the
time
of
dissolution
MINUS
DAMAGES
* a guilty partner who is EXCLUDED will be
indemnified against all present or future
partnership liabilities
RIGHT TO GET CASH
in case on non-continuance of the
business, the interest of the partner should if
he desires be given in cash
assets may be sold
a guilty partner, in ascertaining the value of
his interest is not entitled to a proportional
share of the value of GOOD WIL

PARTNERSHIP LAW- SUMMARY

20
RIGHTS OF INNOCENT PARTNERS IN CASE
of RESCISSION based on FRAUD AND
MISREPRESENTATION
1. Right to LIEN or RETENTION SURPLUS
CAPITAL
ADVANCES
2. Right of SUBROGATION as creditor
3. Right of INDEMNIFICATION
*ORDER of PAYMENT in WINDING-UP of
PARTNERSHIP LIABILITIES
GENERAL PARTNERSHIP: [C, R, C, P]
1. those owing to creditors other than
partners
2. those owing to partners other than for
capital or profits REIMBURSEMENTS
3. those owing to partners in respect to
CAPITAL
4. those owing to partners in respect to
PROFITS
* IF the partnership assets are insufficient,
the other partners must contribute more
money or property
PREFERENCE with RESPECT to the
ASSETS
1. regarding partnership property
partnership creditors have preference
2. regarding
individual
properties
partners
individual creditors are preferred

RULE if PARTNER is INSOLVENT

How
INDIVIDUAL
PROPERTY
DISTRIBUTED

*When
creditors
of
the
dissolved
partnership are also creditors of the
partnership continuing business:
1. new partner is admitted without
liquidation
2. a partner retires and assigns his rights
IF the business is continued without
liquidation of the partnership affairs
3. all but one partner retire without
liquidation
4. when all partner assign their right to a
person who will assume their debt
5. after wrongful dissolution, remaining
partners continue the business without
liquidation
6. when partner expelled and remaining
partners continue the business without
liquidation
* liability of third person becoming a partner
in the partnership continuing the business to
the creditors of the dissolved partnership shall
be satisfied out of the partnership property
ONLY
G.R. when a partner retires, he is entitled
what is due him after liquidation BUT no
liquidation is needed if there is already a
settlement at the date of dissolution

of
JURISPRUDENCE

is

ORDER OF PREFERENCE:
1. INDIVIDUAL or SEPARATE CREDITORS
2. PARTNERSHIP CREDITORS
3. those owing to other partners by way of
contribution

BASTIDA vs. MENZI

* articles of association by which 2 or more
persons obligate themselves to place in a
common fund any property, industry, or any of
these things, in order to obtain profit, shall be
COMMERCIAL
BORJA vs. ADDISON
* a surviving husband may form a
partnership with the heirs of the deceased

PARTNERSHIP LAW- SUMMARY

wife for the management and control of the

community property
BUT in the absence of the formalities
prescribed by the Civil Code, knowledge of the
existence of the new partnership or
community of property must at least be
brought home to third persons dealing with
the surviving husband in regard to the
community real property in order to bind
them by the community agreement
KIEL vs. SABERT
* the declarations of one partner, not made
in the presence of his co-partner, are not
competent to prove the existence of a
partnership between them as against such
partner
* the existence of a partnership cannot be
established by general reputation, rumor or
hearsay
EVENGELISTA vs. C.I.R.
* By the 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
ESSENTIAL ELEMENTS of a PARTNERSHIP
1. an agreement to CONTRIBUTE money,
property, or industry to a COMMON
FUND
2. intent to divide the profits among the
contracting parties
* when our internal Revenue Code includes
partnerships among the entities subject to
the tax on corporations, said code which are
not necessarily partnerships in the technical
sense of the term
* PARTNERSHIPS includes a SYNDICATE,
GROUP, POOL, JOINT VENTURE, or other
unincorporated organization, through or by

21
the means of which any business, financial
operation, or venture is carried on
* a joint venture need not be undertaken in
any of the standard forms,
or in conformity with the usual requirements
of the law on partnerships, in order that one
could be deemed constituted for purposes of
the TAX on corporations
PASCUAL vs. C.I.R.
* co-ownership or co-possession does not
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
* the sharing of gross returns does not itself
establish a partnership, within the persons
sharing them have a joint or common right or
interest in any property from which the
returns are derived
* aside from the circumstances of profit, the
presence of other elements constituting
partnership is necessary, such as:
1. the clear intent to form a partnership
2. the existence of a juridical personality
different from that of the individual
partners
AND
3. the freedom to transfer or assign any
interest in the property by one with the
consent of the others
* an isolated transaction whereby 2 or more
persons contribute funds to buy certain real
estate for profit in the absence of other
circumstances showing a contrary intention
cannot be considered a partnership
* persons who contribute property or funds
for a common enterprise and agree to share
the gross returns of that enterprise in
proportion to their contribution, BUT who
severally retain the title to their respective

PARTNERSHIP LAW- SUMMARY

contribution, are not thereby rendered

partners
they have no common stock or capital
and no community of interest as principal
proprietors in the business itself which the
proceeds derived
* a joint purchase of land, by two does not
constitute a co-partnership in respect thereto,
NOR does an agreement to share the profits
and losses on the sale of land create a
partnership
* in order to constitute a PARTNERSHIP
INTER SESE there must be:
A) an intent to form the same
B) generally participating in both
profits and losses
AND
C) such a community of interest, as
far
as
third
persons
are
concerned as enables each party
to make a contract, manage the
business, and dispose of the
whole property
* the common ownership of property does
not itself create a partnership between the
owners, though they may use it for the
purpose of making gains AND they may
without becoming partners, agree among
themselves as to the management and use of
such property and the application of the
proceeds therefrom
* the sharing of returns does not in itself
establish a partnership within the persons
sharing therein have a joint or common right
or interest in the property
there must be:
1. clear intent to form a partnership
2. the existence of a juridical personality
different from the individual partners
AND
3. the freedom of each party to transfer or
assign the whole property

22

DUTERTE vs. RALLOS

* an agreement between 2 persons to
operate a cockpit, by which one is to
contribute his services and the other to
provide the capital, the profits to be divided
between them, constitutes a partnership
DELUAO vs. CASTEEL
* a contract of partnership to exploit a
fishpond pending its award to any qualified
party or applicant is VALID BUT a contract of
partnership to divide the fishpond after such
award is ILLEGAL
* one of the causes of dissolution is any
event which make it unlawful for the business
of the partnership to be carried on or for the
members to carry it on in partnership
C.I.R. vs. SUTER
* a UNIVERSAL PARTNERSHIP requires
either that the object of the association be:
1. all the present property of the partners
as contributed by them to the common
fund
OR
2. all that the partners may acquire by
their industry or work during the
existence of the partnership
* the subsequent marriage of the partners
could not operate to dissolve the partnership
because it is not one of the causes provided
for dissolution by law with regards to limited
partnerships
* partnership has distinct and separate
personality from that of its partners
* a husband and wife may not enter into a
contract
of
general
co-partnership/
UNIVERSAL partnership
ACOAD vs. MABATO

PARTNERSHIP LAW- SUMMARY

* 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

23

* A CONTRACT of PARTNERSHIP is VOID

whenever immovable property is
contributed thereto, if inventory of said
property is not made, signed by the parties
and attached to the public instrument
EVANGELISTA vs. ABAD SANTOS
* an INDUSTRIAL PARTNER cannot engage
in BUSINESS FOR HIMSELF, UNLESS the
partnership expressly permits him to do so
IF HE SHOULD DO SO, the capitalist
partners may either:
1. EXCLUDE
him
from
the
firm
OR
2. AVAIL themselves of the benefits which
he may have obtained in violation of
this provision
with a right to DAMAGES in either case
* the prohibition against an industrial
partner engaging in business for himself seeks
to prevent any conflict of interest between the
industrial partner and the partnership and to
ensure faithful compliance by said partner
with his prostation

PARTNERSHIP LAW- SUMMARY