PARTNERSHIP, AGENCY AND TRUST
LAWSNOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
PART ONE: PARTNERSHIP LAW
I. HISTORICAL CONSIDERATIONS
A. The Evolution of Partnership
1. Development of Partnership Earliest form of conducting
business: single entrepreneur. To permit combinations of capital,
or capital and experience, and to secure economy by eliminating
some of the overhead costs of individual enterprises, the
partnership plan of business association was develop. Can be traced
back to ancient history
2. Ancient origin of partnership as business organizationa.
Romans: capitals, good, talents, and credit of two or more
individuals might best be combined to carry on trade or business.b.
Babylonian period: Hammurabi (King of Babylon) 2300 B.C., provided
for the regulation of the relation called partnership (single
transactions or undertakings).c. Jewish Law: partnership as bus.
org. concerned with the holding of title to land by two or more
persons. hutolin joint ownership of land
3. The relative newness of the law of partnership Partnership
had been well and generally established in British commerce.
Disputes between merchants were considered and disposed of by
special courts (Courts Staple, Admiralty Courts and Courts of
Piepoudre).a. The law of merchants: Special courts established- the
merchants moved more rapidly than the law and they required that
justice be more speedy and that it be in accord with their
custom,b. English law of partnership Special courts was
discontinued and their function were taken over by the law courts
(Chief Justice Lord Mansfield) Establish common law for commercial
matters.c. Beginning of law of partnership: the increased use of
the partnership as bus. org., together with the increase in the
complexity of business, generally has brought forth a rapid
succession of decisions involving partnership.
4. America Uniform ActPurpose: to achieve uniformity of
decisions in this field of law (partnership).
a. Uniform Partnership Act (enacted: 1914)
b. Uniform Limited Partnership Act
B. Sources of Philippine Partnership Law
1. Code of Commerce (Arts. 116-238) Commercial and mercantile
partnerships deal with mercantile transactions.
2. Old Spanish Civil Code (Arts. 1665-1708) non-commercial or
civil partnerships engaged in civil purposes; difference was in the
desired purpose not the manner of organization.
3. New Civil Code (Title IX, Arts. 1767-1867) no more
distinction between commercial and civil partnerships; govern all
transactions of all partnership whether the object be civil or
mercantileNOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
a. Uniform Partnership Act (Sources of Arts. 1769, 1774, 1785,
1805 to 1907, 1809, 1810 to 1814, 1819 to 1826)
b. Uniform Limited Partnership Act
II. NATURE AND ATTRIBUTES
A. Concept
Art. 1767, 1st par, CC established by a contract but the law
fixes the conditions under which it shall operate once
established.
Art. 1767. By the contract of partnership two or more persons
bind themselves to contribute money, property, or industry to a
common fund, with the intention of dividing the profits among
themselves
Two or more persons may also form a partnership for the exercise
of a profession.
B. Partnership as a Contractual Relation
Art. 1769 In determining whether a partnership exists, these
rules shall apply:
1. Except as otherwise provided by Art. 1825, persons who are
not partners as to each other are not partners as to third 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. The sharing of
gross returns does not of itself establish a partnership, WON the
persons sharing them have a joint or common right or interest in
any property from which the returns 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 installment of 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;
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
d. As interest on a loan, though the amount of payment vary with
the profits of the business;
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
e. As the consideration for the sale of a goodwill of a business
or other property by instalments or otherwise.
1. Essential Elements Art.1767 Valid contract Parties (two or
more persons) Mutual contribution (money, property or industry)
Profit Lawful
a. Necessity of Contract Art. 1318 There is no contract unless
the following requisites concur:
1. Consent of the contracting parties; 2. Object certain which
is the subject matter of the contract; 3. Cause of the obligation
which is established.
b. Parties who may become a partner
UNEMANCIPATED AND INSANEArt. 1327 The following cannot give
consent to a contract:
1. Unemancipated minors;
2. Insane or demented persons, and deaf-mutes who do not know
how to read or write;
Art. 1329 The incapacity declared in Art. 1327 is subject to the
modifications determined by law, and is understood to be without
prejudice to special disqualifications established in the laws.
Art. 234 FC Emancipation takes place by the attainment of
majority. Unless otherwise provided, majority commences at the age
of 18 y/o.
Art. 34 RPC Civil Interdiction Civil interdiction shall deprive
the offender during the time of his sentence of the right of
parental authority, or guardianship, either as to the person or
property of any ward, or marital authority, of the right to manage
his property, and of the right to dispose of such property by any
act or any conveyance inter vivos.
Rule 93 - Appointment of Guardians Rule 94 Bonds of
Guardians
DONATION
Art. 1782 Persons who are prohibited from giving each other any
donation or advantage cannot enter into universal partnership.
ARTICLE 739. The following donations shall be void:
(1) Those made between persons who were guilty of adultery or
concubinage at the time of the donation;
(2) Those made between persons found guilty of the same criminal
offense, in consideration
thereof;NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
(3) Those made to a public officer or his wife, descendants and
ascendants, by reason of his office.
In the case referred to in No. 1, the action for declaration of
nullity may be brought by the spouse of the donor or donee; and the
guilt of the donor and donee may be proved by preponderance of
evidence in the same action. (n)
c. Consent or Intention to become a partner 1769 (1) 1804
Art. 1769 In determining whether a partnership exists, these
rules shall apply:
1. Except as otherwise provided by Art. 1825, persons who are
not partners as to each other are not partners as to third persons;
x x x x
ARTICLE 1825. When a person, by words spoken or written or by
conduct, represents himself, or consents to another representing
him to anyone, as a partner in an existing partnership or with one
or more persons not actual partners, he is liable to any such
persons to whom such representation has been made, who has, on the
faith of such representation, given credit to the actual or
apparent partnership, and if he has made such representation or
consented to its being made in a public manner he is liable to such
person, whether the representation has or has not been made or
communicated to such person so giving credit by or with the
knowledge of the apparent partner making the representation or
consenting to its being made:
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
(1) When a partnership liability results, he is liable as though
he were an actual member of the partnership;(2) When no partnership
liability results, he is liable pro rata with the other persons, if
any, so consenting to the contract or representation as to incur
liability, otherwise separately.
When a person has been thus represented to be a partner in an
existing partnership, or with one or more persons not actual
partners, he is an agent of the persons consenting to such
representation to bind them to the same extent and in the same
manner as though he were a partner in fact, with respect to persons
who rely upon the representation. When all the members of the
existing partnership consent to the representation, a partnership
act or obligation results; but in all other cases it is the joint
act or obligation of the person acting and the persons consenting
to the representation. (n)
ARTICLE 1804. Every partner may associate another person with
him in his share, but the associate shall not be admitted into the
partnership without the consent of all the other partners, even if
the partner having an associate should be a manager. (1696)
d. Lawful subject matter and Cause 1347, 1348, 1770
Art. 1306 The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.
Art. 1347 All things which are not outside the commerce of men,
including future things, may be the object of a contract. All
rights which are not intransmissible may also be the object of
contracts.
No contract may be entered into upon future inheritance except
in case expressly authorized by law.
Art. 1348 Impossible things or services cannot be the object of
contracts.
Art. 1349 The object of every contract must be determinate as to
its kind. The fact that the quantity is not determinate shall not
be an obstacle to the existence of the contract, provided it is
possible to determine the same, without the need of a new contract
between the
parties.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Art. 1409 The following contracts are inexistent and void from
the beginning:
1. Those whose cause, object of purpose is contrary to law,
morals, good customs, public order or public policy; 2. Those which
are absolutely simulated or fictitious;3. Those whose cause or
object did not exist at the time of the transaction; 4. Those whose
object is outside the commerce of men; 5. Those which contemplate
an impossible service; 6. Those where the intention of the parties
relative to the principal object of the contract cannot be
ascertained 7. Those expressly prohibited or declared void by
law;These contracts cannot be ratified. Neither can the right to
set up the defense of illegality be waived.
Art. 1770 A partnership must have a lawful object of purpose,
and must established for the common benefit or interest of the
partners.
When an unlawful partnership is dissolved by a judicial decree,
the profits shall be confiscated in favor of the State, without
prejudice to the provisions of the Penal Code governing the
confiscation of the instruments and effects of a crime.
The pursuit of a particular business for profit; except where
the law requires a specific form of business organization such as
banking or insurance which only corporations can undertake.
e. Contribution to a common fund 1767
(1) Existence of proprietary interest must contribute MPIa.
Money currency which is legal tender in the PH. Nego. Ints.: no
contribution until encashed.b. Property real or personal, corporeal
or incorporeal. Promissory note, evidence of obligation or goodwill
may be contributed.c. Industry means active cooperation, the work
of the party associated, which may be either personal ir manual
efforts or intellectual, and for which he receives a share in the
profits.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
(2) Proof of contribution necessary in partnership.
f. Purpose: Business or profession - 1767
Cause of obligation Art. 1350 for each contracting party, the
prestation or promise of a thing or service by the other; the
undertaking of the other to contribute money, property or
industry.
Art. 1350 In onerous contracts the cause is understood to be,
for each contracting party, the prestation or promise of a thing or
service by the other, in remuneratory ones, the service of benefit
which is remunerated; and in contracts of pure beneficence, the
mere liberality of the benefactor
PURPOSE:(1) The very reason for existence of partnership A
partnership is formed to carry on a business. The idea of obtaining
pecuniary profit or gain directly through or as a result of the
business to be carrid on is the very reason for the existence of a
partnership.(2) Need only be principal, not exclusive aim. It is
sufficient that the principal purpose of the partnership is sharing
of profits in certain proportions even if there are incidentally,
moral, social or spiritual ends. Sharing of profits: Not
necessarily in equal shares Not conclusive evidence of partnership
Sharing of losses: Necessary corollary of sharing in profits
Agreement not necessary-sharing of profit shall be in the same
proportion as the sharing of losses.
g. Community of Interest 1767, 1770, 1769 (3),
(4)NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
i. co-ownership of capital or propertyii. Joint management and
controliii. Co-ownership of profits and participation in profits
and losses
Art. 1770 A partnership must have a lawful object of purpose,
and must established for the common benefit or interest of the
partners.
When an unlawful partnership is dissolved by a judicial decree,
the profits shall be confiscated in favor of the State, without
prejudice to the provisions of the Penal Code governing the
confiscation of the instruments and effects of a crime.
Art. 1769. xxx3. The sharing of gross returns does not of itself
establish a partnership, WON the persons sharing them have a joint
or common right or interest in any property from which the returns
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 installment of 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 instalments or otherwise.
2. Principles Governing
PartnershipNOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
a. Contractual in nature 1767, 1784
Art. 1784 A partnership begins from the moment of execution of
the contract, unless it is otherwise stipulated.
b. Separate Juridical Personality 1768, 46, 51, 1775
Article 1768. The partnership has a juridical personality
separate and distinct from that of each of the partners, even in
case of failure to comply with the requirements of article 1772,
first paragraph.
Article 1772. Every contract of partnership having a capital of
three thousand pesos or more, in money or property, shall appear in
a public instrument, which must be recorded in the Office of the
Securities and Exchange Commission.Failure to comply with the
requirements of the preceding paragraph shall not affect the
liability of the partnership and the members thereof to third
persons.
ARTICLE 46.Juridical persons may acquire and possess property of
all kinds, as well as incur obligations and bring civil or criminal
actions, in conformity with the laws and regulations of their
organization. (38a)
ARTICLE 51.When the law creating or recognizing them, or any
other provision does not fix the domicile of juridical persons, the
same shall be understood to be the place where their legal
representation is established or where they exercise their
principal functions. (41a)
ARTICLE 1775.Associations and societies, whose articles are kept
secret among the members, and wherein any one of the members may
contract in his own name with third persons, shall have no
juridical personality, and shall be governed by the provisions
relating to co-ownership. (1669)
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
c. Delectus Personae 1804, 1813
Means choice of the person or choice of the persons. Partnership
relation fiduciary in nature. Partnership is a form of voluntary
association entered into by the associates. It is a personal
relation in which the element of delectus personae exists,
involving as it does trust and confidence between the partners.
ARTICLE 1804. Every partner may associate another person with
him in his share, but the associate shall not be admitted into the
partnership without the consent of all the other partners, even if
the partner having an associate should be a manager. (1696)
ARTICLE 1813.A conveyance by a partner of his whole interest in
the partnership does not of itself dissolve the partnership, or, as
against the other partners in the absence of agreement, entitle the
assignee, during the continuance of the partnership, to interfere
in the management or administration of the partnership business or
affairs, or to require any information or account of partnership
transactions, or to inspect the partnership books; but it merely
entitles the assignee to receive in accordance with his contract
the profits to which the assigning partner would otherwise be
entitled. However, in case of fraud in the management of the
partnership, the assignee may avail himself of the usual remedies.
In case of a dissolution of the partnership, the assignee is
entitled to receive his assignor's interest and may require an
account from the date only of the last account agreed to by all the
partners. (n)
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
CASE:
ORTEGA vs. CAG.R. No. 109248, July 3, 1995, Vitug, J;p
FACTS: Ortega, then a senior partner in the law firm Bito, Misa,
and Lozada withdrew in said firm. He filed with SEC a petition for
dissolution and liquidation of partnership. SEC en banc ruled that
withdrawal of Misa from the firm had dissolved the partnership.
Reason: since it is partnership at will, the law firm could be
dissolved by any partner at anytime, such as by withdrawal there
from, regardless of good faith or bad faith, since no partner can
be forced to continue in the partnership against his will.
ISSUE: 1. WON the partnership of Bito, Misa & Lozada (now
Bito, Lozada, Ortega & Castillo) is a partnership at will;
2. WON the withdrawal of Misa dissolved the partnership
regardless of his good or bad faith;
HELD: 1. Yes. The partnership agreement of the firm provides
that [t]he partnership shall continue so long as mutually
satisfactory and upon the death or legal incapacity of one of the
partners, shall be continued by the surviving partners.
2. Yes. Any one of the partners may, at his sole pleasure,
dictate a dissolution of the partnership at will (e.g. by way of
withdrawal of a partner). He must, however, act in good faith, not
that the attendance of bad faith can prevent the dissolution of the
partnership but that it can result in a liability for damages.
d. Mutual Agency 1803, 1818,
1822NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
ARTICLE 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. (1695a)
ARTICLE 1818.Every partner is an agent of the partnership for
the purpose of its business, and the act of every partner,
including the execution in the partnership name of any instrument,
for apparently carrying on in the usual way the business of the
partnership of which he is a member binds the partnership, unless
the partner so acting has in fact no authority to act for the
partnership in the particular matter, and the person with whom he
is dealing has knowledge of the fact that he has no such authority.
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. Except when
authorized by the other partners or unless they have abandoned the
business, one or more but less than all the partners have no
authority to:(1)Assign the partnership property in trust for
creditors or on the assignee's promise to pay the debts of the
partnership;(2)Dispose of the good-will of the business;(3)Do any
other act which would make it impossible to carry on the ordinary
business of a partnership;(4)Confess a judgment;(5)Enter into a
compromise concerning a partnership claim or liability;
meiriw(6)Submit a partnership claim or liability to
arbitration;NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
(7)Renounce a claim of the partnership.No act of a partner in
contravention of a restriction on authority shall bind the
partnership to persons having knowledge of the restriction. (n)
ARTICLE 1822.Where, by any wrongful act or omission of any
partner acting in the ordinary course of the business of the
partnership or with the authority of his co-partners, loss or
injury is caused to any person, not being a partner in the
partnership, or any penalty is incurred, the partnership is liable
therefor to the same extent as the partner so acting or omitting to
act. (n)
e. Unlimited Liability 1816, 1817, 1824, 1826, 1827, 1839 (4),
(7)
ARTICLE 1816.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. (n) ARTICLE 1817.Any
stipulation against the liability laid down in the preceding
article shall be void, except as among the partners. (n)ARTICLE
1824.All partners are liable solidarily with the partnership for
everything chargeable to the partnership under articles 1822 and
1823. (n)
ARTICLE 1826.A person admitted as a partner into an existing
partnership is liable for all the obligations of the partnership
arising before his admission as though he had been a partner when
such obligations were incurred, except that this liability shall be
satisfied only out of partnership property, unless there is a
stipulation to the contrary. (n)ARTICLE 1827.The creditors of the
partnership shall be preferred to those of each 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. (n)
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
ARTICLE 1839.In settling accounts between the partners after
dissolution, the following rules shall be observed, subject to any
agreement to the contrary: wItwsi(1)The assets of the partnership
are:(a)The partnership property,(b) The contributions of the
partners necessary for the payment of all the liabilities specified
in No. 2.(2)The liabilities of the partnership shall rank in order
of payment, as follows:(a)Those owing to creditors other than
partners,(b)Those owing to partners other than for capital and
profits,(c)Those owing to partners in respect of capital, (d)Those
owing to partners in respect of profits.(3)The assets shall be
applied in the order of their declaration in No. 1 of this article
to the satisfaction of the liabilities.(4)The partners shall
contribute, as provided by article 1797, the amount necessary to
satisfy the liabilities.(5)An assignee for the benefit of creditors
or any person appointed by the court shall have the right to
enforce the contributions specified in the preceding number. (6)Any
partner or his legal representative shall have the right to enforce
the contributions specified in No. 4, to the extent of the amount
which he has paid in excess of his share of the liability.(7)The
individual property of a deceased partner shall be liable for the
contributions specified in No. 4.(8)When partnership property and
the individual properties of the partners are in possession of a
court for distribution, partnership creditors shall have priority
on partnership property and separate creditors on individual
property, saving the rights of lien or secured
creditors.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
(9)Where a partner has become insolvent or his estate is
insolvent, the claims against his separate property shall rank in
the following order:(a)Those owing to separate creditors;(b)Those
owing to partnership creditors; (c)Those owing to partners by way
of contribution. (n)
3. Distinguished from other combinations and relations
a. Joint Venture A commercial undertaking by two or more
persons, differing from a partnership in that it relates to the
disposition of a single lot of goods or the completion of a single
project. Its duration is limited to a period in which the goods are
sold or the project is carried on. A corporation may enter into
joint venture partnership with another where the nature of the
venture is in line with the business authorized by its charter.
CASE(S):
Aurbach vs. Sanitary Wares180 scra 130 (1989)
Facts:This consolidated petition assailed the decision of the CA
directing a certain MANNER OF ELECTION OFOFFICERS IN THE BOARD OF
DIRECTORS. (Noted: There was a disagreement about the election of
Board of Members, wherein the no. of nominees exceeded to the
prescribe no. that should have been nominated. For foreigner,3
nominees only, while the Filipino group shall have a 6 nominees.
During the election, there are 3 nominees from the foreign group
while the Filipino group have 8 nominees. The Chairman ruled that
the first 9 nominees will be the winner in the said election *There
are two groups in this case, theLagdameo group composed of Filipino
investors and the American Standard Inc. (ASI) composed of foreign
investors.The ASI Group and petitioner Salazar (G.R. Nos. 75975-76)
contend that the actual intention of theparties should be viewed
strictly on the "Agreement" dated August 15,1962 wherein it is
clearly statedthat the parties' intention was to form a corporation
and not a joint venture.Issue:The main issue hinges on who were the
duly elected directors of Saniwares for the year 1983 during
itsannual stockholders' meeting held on March 8, 1983.
Ruling:NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
While certain provisions of the Agreement would make it appear
that the parties theretodisclaim being partners or joint venturers
such disclaimer is directed at third parties and is notinconsistent
with, and does not preclude, the existence of two distinct groups
of stockholders inSaniwares one of which (the Philippine Investors)
shall constitute the majority, and the other ASIshall constitute
the minority stockholder. In any event, the evident intention of
the PhilippineInvestors and ASI in entering into the Agreement is
to enter into a joint venture enterpriseAn examination of the
Agreement shows that certain provisions were included to protect
theinterests of ASI as the minority. For example, the vote of 7 out
of 9 directors is required incertain enumerated corporate acts. ASI
is contractually entitled to designate a member of theExecutive
Committee and the vote of this member is required for certain
transactionsThe Agreement also requires a 75% super-majority vote
for the amendment of the articles andby-laws of Saniwares. ASI is
also given the right to designate the president and plant
manager.The Agreement further provides that the sales policy of
Saniwares shall be that which isnormally followed by ASI and that
Saniwares should not export "Standard" products otherwisethan
through ASI's Export Marketing Services. Under the Agreement, ASI
agreed to providetechnology and know-how to Saniwares and the
latter paid royalties for the same.The legal concept of a joint
venture is of common law origin. It has no precise legal
definitionbut it has been generally understood to mean an
organization formed for some temporary purpose. It is in fact
hardly distinguishable from the partnership, since their elements
are similar community of interest in the business, sharing of
profits and losses, and a mutual right of control.The main
distinction cited by most opinions in common law jurisdictions is
that the partnershipcontemplates a general business with some
degree of continuity , while the joint venture is formedfor the
execution of a single transaction, and is thus of a temporary
nature
HEIRS OF TAN ENG KEE
vs.CANOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
341 SCRA 740, G.R. No. 126881, October 3, 2000, De Leon, Jr.:p
FACTS: The complaint alleged that after the second World War, Tan
EngKee and Tan Eng Lay, pooling their resources and industry
together, entered into a partnership engaged in the business of
selling lumber and hardware and construction supplies. They named
their enterprise "Benguet Lumber" which they jointly managed until
Tan EngKee's death. Petitioners claimed that Tan Eng Lay and his
children caused the conversion of the partnership "Benguet Lumber"
into a corporation called "Benguet Lumber Company" allegedly to
deprive Tan Eng Kee and his heirs of their rightful participation
in the profits of the business. After Tang Eng Kees death
petitioners prayed for accounting of the partnership assets, and
the dissolution, winding up and liquidation thereof, and the equal
division of the net assets of Benguet Lumber. The RTC ruled in
favor of petitioners, declaring that Benguet Lumber is a joint
venture which is akin to a particular partnership. The Court of
Appeals rendered the assailed decision reversing the judgment of
the trial court.
ISSUE: Whether or not Tan Eng Kee and Tan Eng Lay were partners
in Benguet Lumber.
HELD:NO. The trial court determined that Tan EngKee and Tan Eng
Lay had entered into a joint venture, which it said is akin to a
particular partnership. A particular partnership is distinguished
from a joint adventure, to wit:(a) A joint adventure (an American
concept similar to our joint accounts) is a sort of informal
partnership, with no firm name and no legal personality. In a joint
account, the participating merchants can transact business under
their own name, and can be individually liable therefor.(b)
Usually, but not necessarily a joint adventure is limited to a
SINGLE TRANSACTION, although the business of pursuing to a
successful termination may continue for a number of years; a
partnership generally relates to a continuing business of various
transactions of a certain kind. A joint venture "presupposes
generally a parity of standing between the joint co-ventures or
partners, in which each party has an equal proprietary interest in
the capital or property contributed, and where each party exercises
equal rights in the conduct of the business. The evidence presented
by petitioners falls short of the quantum of proof required to
establish a partnership. In the absence of evidence, we cannot
accept as an established fact that Tan Eng Kee allegedly
contributed his resources to a common fund for the purpose of
establishing a partnership. Besides, it is indeed odd, if not
unnatural, that despite the forty years the partnership was
allegedly in existence, Tan Eng Kee never asked for an accounting.
The essence of a partnership is that the partners share in the
profits and losses. Each has the right to demand an accounting as
long as the partnership exists. A demand for periodic accounting is
evidence of a partnership. During his lifetime, Tan Eng Kee
appeared never to have made any such demand for accounting from
hisbrother, Tang Eng Lay. We conclude that Tan Eng Kee was only an
employee, not a partner since they did not present and offer
evidence that would show that Tan Eng Kee received amounts of money
allegedly representing his share in the profits of the
enterprise.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
There being no partnership, it follows that there is no
dissolution, winding up or liquidation to speak of. Hence, the
petition must fail.
b. AgencyARTICLE 1868.By the contract of agency a person binds
himself to render some service or to do something in representation
or on behalf of another, with the consent or authority of the
latter. (1709a)
c.
EmploymentNOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
CASE(S):
RUGA VS. NLRCG.R. No. 72654-81 January 22, 1990
FACTS:Private respondent's regular business of "trawl" fishing,
petitioners were paid on percentage commission basis in cash by one
Mrs. Pilar de Guzman, cashier of private respondent. As agreed
upon, they received thirteen percent (13%) of the proceeds of the
sale of the fish-catch if the total proceeds exceeded the cost of
crude oil consumed during the fishing trip, otherwise, they
received ten percent (10%) of the total proceeds of the sale. The
patron/pilot, chief engineer and master fisherman received a
minimum income of P350.00 per week while the assistant engineer,
second fisherman, and fisherman-winchman received a minimum income
of P260.00 per week.
ISSUE:Whether or not the fishermen-crew members of the trawl
fishing vessel are employees of its owner-operator, De Guzman
Fishing Enterprises.
HELD:The hiring of petitioners to perform work which is
necessary or desirable in the usual business or trade of private
respondent for a period of 8-15 years since 1968 qualify them as
regular employees within the meaning of Article 281 of the Labor
Code as they were indeed engaged to perform activities usually
necessary or desirable in the usual fishing business or occupation
of private respondent.
1. LABOR LAW; EMPLOYER-EMPLOYEE RELATIONSHIP; ELEMENTS IN
DETERMINING EXISTENCE THEREOF. We have consistently ruled that in
determining the existence of an employer-employee relationship, the
elements that are generally considered are the following (a) the
selection and engagement of the employee; (b) the payment of wages;
(c) the power of dismissal; and (d) the employer's power to control
the employee with respect to the means and methods by which the
work is to be accomplished. The employment relation arises from
contract of hire, express or implied. In the absence of hiring, no
actual employer-employee relation could
exist.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
2. ID.; ID.; PRESENT IN THE CASE AT BAR. To stress that there is
an employer-employee relationship between them and private
respondent, petitioners invite attention to the following: that
they were directly hired by private respondent through its general
manager, Arsenio de Guzman, and its operations manager, Conrado de
Guzman; that, except for Laurente Bautu, they had been employed by
private respondent from 8 to 15 years in various capacities; that
private respondent, through its operations manager, supervised and
controlled the conduct of their fishing operations as to the fixing
of the schedule of the fishing trips, the direction of the fishing
vessel, the volume or number of tubes of the fish-catch, the time
to return to the fishing port, which were communicated to the
patron/pilot by radio (single side band) that they were not allowed
to join other outfits even the other vessels owned by private
respondent without the permission of the operations manager; that
they were compensated on percentage commission basis of the gross
sales of the fish-catch which were delivered to them in cash by
private respondent's cashier, Mrs. Pilar de Guzman; and that they
have to follow company policies, rules and regulations imposed on
them by private respondent. Furthermore, the fact that on mere
suspicion based on the reports that petitioners allegedly sold
their fish-catch at midsea without the knowledge and consent of
private respondent, petitioners were unjustifiably not allowed to
board the fishing vessel on September 11, 1983 to resume their
activities without giving them the opportunity to air their side on
the accusation against them unmistakably reveals the disciplinary
power exercised by private respondent over them and the
corresponding sanction imposed in case of violation of any of its
rules and regulations.
3. ID.; ID.; REGULAR EMPLOYEE, CONSTRUED. While tenure or length
of employment is not considered as the test of employment,
nevertheless the hiring of petitioners to perform work which is
necessary or desirable in the usual business or trade of private
respondent for a period of 8-15 years since 1968 qualify them as
regular employees within the meaning of Article 281 of the Labor
Code as they were indeed engaged to perform activities usually
necessary or desirable in the usual fishing business or occupation
of private respondent.
4. ID.; WAGE, DEFINED; COMPENSATION ON A PERCENTAGE COMMISSION
BASED ON THE GROSS SALE OF THE FISH-CATCH TANTAMOUNT TO WAGE. Aside
from performing activities usually necessary and desirable in the
business of private respondent, it must be noted that petitioners
received compensation on a percentage commission based on the gross
sale of the fish-catch, i.e. 13% of the proceeds of the sale if the
total proceeds exceeded the cost of the crude oil consumed during
the fishing trip, otherwise only 10% of the proceeds of the sale.
Such compensation falls within the scope and meaning of the term
"wage" as defined under Article 97(f) of the Labor Code, thus: "(f)
'Wage' paid to any employee shall mean the remuneration or
earnings, however designated, capable of being expressed in terms
of money, whether fixed or ascertained on a time, task, piece or
commission basis, or other method of calculating the same, which is
payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services
rendered or to be rendered, and included the fair and reasonable
value, as determined by the Secretary of Labor, of board, lodging,
or other facilities customarily furnished by the employer to the
employee. . . .
"NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
ARSENIO T. MENDIOLA, petitioner, vs.COURT OF APPEALS, NATIONAL
LABOR RELATIONS COMMISSION, PACIFIC FOREST RESOURCES, PHILS., INC.
and/or CELLMARK AB, respondents
Facts:Private respondent Pacific Forest Resources, Phils., Inc.
(Pacfor) is a corporation organized and existing under the laws of
California, USA. Private respondent Pacfor entered into a "Side
Agreement on Representative Office known as Pacific Forest
Resources (Phils.), Inc."5 with petitioner Arsenio T. Mendiola
(ATM), effective May 1, 1995, "assuming that Pacfor-Phils. is
already approved by the Securities and Exchange Commission [SEC] on
the said date. etitioner is not a part-owner of Pacfor Phils.
because the latter is merely Pacfor-USA's representative office and
not an entity separate and distinct from Pacfor-USA. "It's simply a
'theoretical company' with the purpose of dividing the income
50-50."11 Petitioner presumably knew of this arrangement from the
start, having been the one to propose to private respondent Pacfor
the setting up of a representative office, and "not a branch
office" in the Philippines to save on taxes.12On November 27, 2000,
private respondent Pacfor, through counsel, ordered petitioner to
turn over to it all papers, documents, files, records, and other
materials in his or ATM Marketing Corporation's possession that
belong to Pacfor or Pacfor Phils. Petitioner construed these
directives as a severance of the "unregistered partnership" between
him and Pacfor, and the termination of his employment as resident
manager of Pacfor Phils private respondent Pacfor placed petitioner
on preventive suspension and ordered him to show cause why no
disciplinary action should be taken against him. Petioner was
dismissed.
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
ISSUEWON there is partnership or employer-employee
relationship?
Held:We hold that petitioner is an employee of private
respondent Pacfor and that no partnership or co-ownership exists
between the parties.In a partnership, the members become co-owners
of what is contributed to the firm capital and of all property that
may be acquired thereby and through the efforts of the members.36
The property or stock of the partnership forms a community of
goods, a common fund, in which each party has a proprietary
interest.37 In fact, the New Civil Code regards a partner as a
co-owner of specific partnership property.38 Each partner possesses
a joint interest in the whole of partnership property. If the
relation does not have this feature, it is not one of
partnership.39 This essential element, the community of interest,
or co-ownership of, or joint interest in partnership property is
absent in the relations between petitioner and private respondent
Pacfor. Petitioner is not a part-owner of Pacfor Phils. William
Gleason, private respondent Pacfor's President established this
fact when he said that Pacfor Phils. is simply a "theoretical
company" for the purpose of dividing the income 50-50. He stressed
that petitioner knew of this arrangement from the very start,
having been the one to propose to private respondent Pacfor the
setting up of a representative office, and "not a branch office" in
the Philippines to save on taxes. Thus, the parties in this case,
merely shared profits. This alone does not make a
partnership.40Besides, a corporation cannot become a member of a
partnership in the absence of express authorization by statute or
charter.41 This doctrine is based on the following considerations:
(1) that the mutual agency between the partners, whereby the
corporation would be bound by the acts of persons who are not its
duly appointed and authorized agents and officers, would be
inconsistent with the policy of the law that the corporation shall
manage its own affairs separately and exclusively; and, (2) that
such an arrangement would improperly allow corporate property to
become subject to risks not contemplated by the stockholders when
they originally invested in the corporation.42 No such
authorization has been proved in the case at bar.
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
d. Co-ownership
There is a co-ownership whenever the ownership of an undivided
thing or right belongs to different persons. (Art. 484.) It is the
right of common dominion which two or more persons have in a
spiritual part of a thing which is not physically divided.
The following are the distinctions between a partnership and a
co-ownership:
(1) Creation. Co-ownership is generally created by law.It may
exist even without a contract, but partnership is always created by
a contract (Art. 1767.), either express or implied;
(2) Juridical personality. A partnership has a juridical
personality separate and distinct from that of each partner
(Art.1768.), while a co-ownership has none;
(3) Purpose. The purpose of a partnership is the realization of
profits (Art. 1767.), while in co-ownership, it is the common
enjoyment of a thing or right (see Art. 486.) which does not
necessarily involve the sharing of profits;
(4) Duration. Under the law, there is no limitation upon the
duration of a partnership (see Arts. 1767, 1785.) while in
co-ownership, an agreement to keep the thing undivided for more
than ten years is not allowed (see Art. 494.);
(5) Disposal of interests. A partner may not dispose of his
individual interest in the partnership (Art. 1812.) so as to make
the assignee a partner unless agreed upon by all of the
partners;
(6) Power to act with third persons. In the absence of any
stipulation to the contrary (Art. 1803.), a partner may bind the
partnership, while a co-owner cannot represent the co-ownership;
and
(7) Effect of death. The death of a partner results in
thedissolution of the partnership (Art. 1830[5].), but the death of
a co-owner does not necessarily dissolve the
co-ownership.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
e. Corporation
i.Manner of Creation Art. 1787 vs. Sec. 2 Corporation Code
Art. 1787 When the capital or a part thereof which a partner is
bound to contribute consists of goods, their appraisal must be made
in the manner prescribed in the contract of partnership, and in the
absence if stipulation, it shall be made by experts chosen by the
partners, and according to current prices, the subsequent changes
thereof being for the account of partnership.
Sec. 2 Corp. Code - Corporation defined. - A corporation is an
artificial being created by operation of law, having the right of
succession and the powers, attributes and properties expressly
authorized by law or incident to its existence.
ii.Number of Incorporators Art. 1767 vs. Sec 10 Corp Code
Art. 1767 By the contract of partnership two or more persons
bind themselves to contribute money, property, or industry to a
common fund, with the intention of dividing the profits among
themselves.
Two or more persons may also form a partnership for the exercise
of a profession.
Sec. 10 Corp. Code
iii.Start of Existence Art. 1784 vs. Sec. 19 Corp Code
Art. 1784 A partnership begins from the moment of execution of
the contract, unless it is otherwise stipulated.
Sec. 19 Corp Code Commencement of corporate existence. - A
private corporation formed or organized under this Code commences
to have corporate existence and juridical personality and is deemed
incorporated from the date the Securities and Exchange Commission
issues a certificate of incorporation under its official seal; and
thereupon the incorporators, stockholders/members and their
successors shall constitute a body politic and corporate under the
name stated in the articles of incorporation for the period of time
mentioned therein, unless said period is extended or the
corporation is sooner dissolved in accordance with
law.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
iv.Powers Art. 1306 vs. Sec 2, 36 Corp. Code
Art. 1306 The contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.
Sec 2 Corp Code - Corporation defined. - A corporation is an
artificial being created by operation of law, having the right of
succession and the powers, attributes and properties expressly
authorized by law or incident to its existence.
Sec. 36 Corp. Code - Corporate powers and capacity. - Every
corporation incorporated under this Code has the power and
capacity:1.To sue and be sued in its corporate name;
2.Of succession by its corporate name for the period of time
stated in the articles of incorporation and the certificate of
incorporation;
3.To adopt and use a corporate seal;
4.To amend its articles of incorporation in accordance with the
provisions of this Code;
5.To adopt by-laws, not contrary to law, morals, or public
policy, and to amend or repeal the same in accordance with this
Code;
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
6.In case of stock corporations, to issue or sell stocks to
subscribers and to sell stocks to subscribers and to sell treasury
stocks in accordance with the provisions of this Code; and to admit
members to the corporation if it be a non-stock corporation;
7.To purchase, receive, take or grant, hold, convey, sell,
lease, pledge, mortgage and otherwise deal with such real and
personal property, including securities and bonds of other
corporations, as the transaction of the lawful business of the
corporation may reasonably and necessarily require, subject to the
limitations prescribed by law and the Constitution;
8.To enter into merger or consolidation with other corporations
as provided in this Code;
9.To make reasonable donations, including those for the public
welfare or for hospital, charitable, cultural, scientific, civic,
or similar purposes: Provided, That no corporation, domestic or
foreign, shall give donations in aid of any political party or
candidate or for purposes of partisan political activity;
10.To establish pension, retirement, and other plans for the
benefit of its directors, trustees, officers and employees; and 11.
To exercise such other powers as may be essential or necessary to
carry out its purpose or purposes as stated in the articles of
incorporation.
v.Name Art. 1844 (l,a) vs. Sec. 11 Corp Code
(Limited Partnerships)Art. 1844 Two or more persons desiring to
form a limited partnership shall:
I.Sign and swear to a certificate, which shall state a.The name
of the partnership, adding thereto the word Limited;
NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Sec. 11 Corp Code - Corporate term. - A corporation shall exist
for a period not exceeding fifty (50) years from the date of
incorporation unless sooner dissolved or unless said period is
extended. The corporate term as originally stated in the articles
of incorporation may be extended for periods not exceeding fifty
(50) years in any single instance by an amendment of the articles
of incorporation, in accordance with this Code; Provided, That no
extension can be made earlier than five (5) years prior to the
original or subsequent expiry date(s) unless there are justifiable
reasons for an earlier extension as may be determined by the
Securities and Exchange Commission
vi.Term of existence Art. 1767 vs. Sec. 11 Corp Code
Art. 1767 - By the contract of partnership two or more persons
bind themselves to contribute money, property, or industry to a
common fund, with the intention of dividing the profits among
themselves.Two or more persons may also form a partnership for the
exercise of a profession.
Sec. 11 Corp Code- A corporation shall exist for a period not
exceeding fifty (50) years from the date of incorporation unless
sooner dissolved or unless said period is extended. The corporate
term as originally stated in the articles of incorporation may be
extended for periods not exceeding fifty (50) years in any single
instance by an amendment of the articles of incorporation, in
accordance with this Code; Provided, That no extension can be made
earlier than five (5) years prior to the original or subsequent
expiry date(s) unless there are justifiable reasons for an earlier
extension as may be determined by the Securities and Exchange
Commission.
vii.Liability to third parties Art. 1816, 1822-1824 vs. Sec. 64.
37 Corp
Art. 1816 All partners, including industrial ones, shall be
liable pro rata with all their property and after all partnership
assets have been exhausted, for the contracts which may be entered
into the name and for the partnership. However, any partner may
enter into a separate obligation to perform a partnership
contract.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Art. 1822 Where, by any wrongful act or omission of any partner
acting in the ordinary course of the business of the partnership or
with the authority of his co-partners, loss or injury is caused to
any person, bot being a partner in the partnership , or any penalty
incurred, the partnership is liable therefor to the same extent as
the partner so acting or omitting to act.Art. 1823 The partnership
is bound to make good the loss:
1.Where one partner acting within the scope of his apparent
authority receives money or property of a third person and
misapplies it; and
2.Where the partnership in the course of its business receives
money or property of a third person and the money or property so
received is misapplied by any partner where it is in the custody of
the partnership.
Art. 1824 All partners are liable solidarily with the
partnership for everything chargeable to the partnership under
Articles 1822 and 1823.
Sec. 64. Corp Code - Issuance of stock certificates. - No
certificate of stock shall be issued to a subscriber until the full
amount of his subscription together with interest and expenses (in
case of delinquent shares), if any is due, has been paid.
Sec. 37 Corp Code- Power to extend or shorten corporate term. -
A private corporation may extend or shorten its term as stated in
the articles of incorporation when approved by a majority vote of
the board of directors or trustees and ratified at a meeting by the
stockholders representing at least two-thirds (2/3) of the
outstanding capital stock or by at least two-thirds (2/3) of the
members in case of non-stock corporations. Written notice of the
proposed action and of the time and place of the meeting shall be
addressed to each stockholder or member at his place of residence
as shown on the books of the corporation and deposited to the
addressee in the post office with postage prepaid, or served
personally: Provided, That in case of extension of corporate term,
any dissenting stockholder may exercise his appraisal right under
the conditions provided in this
code.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
viii.Transferability of Interest Art. 1767, 1804 vs. Sec. 63
Corp Code
Art. 1767 (supra)
Art. 1804 Every partner may associate another person with him in
his share, but the associate shall not be admitted into the
partnership without the consent of all the other partners, even if
the partner having an associate should be a manager.
Sec. 63 Corp Code - Certificate of stock and transfer of shares.
- The capital stock of stock corporations shall be divided into
shares for which certificates signed by the president or vice
president, countersigned by the secretary or assistant secretary,
and sealed with the seal of the corporation shall be issued in
accordance with the by-laws. Shares o