Partnership

• To divide profits or to exercise a profession


  What are the intentions of forming a contract of partnership?
• Intention to create, common fund and joint interest in the profits


  What are the three requisites for the existence of a partnership?
• No


  If there is a joint ownership of the properties and a sharing of gross returns, does it establish a partnership?
• Preparatory


  characteristic of a contract that after it has been entered into, other contracts essential in the carrying out of its purposes can be entered into
• Onerous


  characteristic of a contract that where certain contributions have to be made
• Principal


  characteristic of a contract that it's existence do not depend on the life of na out her contract
• Nominate


  characteristic of a contract that is designated by a specific name
• Bilateral


  characteristic of a contract that it is entered into between two or more persons
• Consensual


  characteristic of a contract that is perfected by mere consent
• Delectus personarum


  Existing mutual confidence and trust
• Affectio societatis


  the desire to formulate an ACTIVE union
• No limit expect in agreement

  How long can a partnership exist?
• To their private properties beyond contributions.

  To what extent to a partner can have in liability to strangers?
• Partners as agents


  partners acting on behalf of the partnership who can bind both the firm and the partners
• From the time the contracts begin

  When does a partnership attain legal personality?
• Business trust


  What is created when certain persons entrust their property or money to others who will manage the same for the former
• Managers


  Who are the trustees of a business trust?
• Cestui que trust


  What do you call the investors of a business trusts?
• No because they do not at all participate in the management and is bound only to the extent of their contribution

  Are investors of a business trust exempted from personal liability?
• Joint adventure


  A sort of informal partnership, with no firm name and no legal personality
• Voidable


  Without a parent's consent for an unemancipated minor becoming a partner, the partnership is?
• Capital of 3,000 or more - merely as a condition for the issuance of licenses to engage in business or trade


  Under Art. 1772, "every contract of partnership having this shall appear in a public instrument, which must be recorded in the office of the Securities and Exchange Commission.
• No. Lendin versus investing


  D, to carry on a business, borrowed money from C. It was agreed that D would return the money in installments and that said installments would come from D's profits in the business.

  
  

  Issue: Is a partnership created between D and C?
• No. Contract of employment

  Fortis was a bookkeeper in a partnership named "Gutierrez Hermanos", with a yearly salary amounting to 5% of the net profits for each year. Fortis, however, had no vote at all in the management of the business.

  
  

  Issue: Was he a partner?
• No. Employee with no power to vote.

  Bastida worked for Menzi and Co., as procurer of contracts for fertilizers to be manufactured by the firm, and as supervisor of the mixing of the fertilizers. However, he had no voice in the management of the business except in his task of supervising the mixing of said fertilizers.For his services, he was entitled to 35% of the net profits in the fertilizer business. Aside from this, he sued the firm for 35% of the value of its goodwill on the ground that he had become a partner thereof.

  
  

  Was he a partner?
• No. Lyons did not want to engage

  Eliser and Lyons were real estate dealers who often associated with each other in their business deals, and who owned together a certain parcel of land. With Lyon's consent, Eliser mortgaged the common land to obtain money for the development of the San Juan Estate. Lyons however expressed a desire not to participate in the project of development. The business of Eliser prospered and later on Lyons asked for a share obtained from the mortgage of the common property, and that therefore, he and Eliser had been partners.

  
  

  Was there a partnership created?
• No. Lacks the element of partners having mutual trust and confidence

  Valderrama and Co., a general merchandise partnership, has become insolvent for maladministration of the business and entered into an agreement with its creditors to the effect that the business should be continued for the time being under the direction and management of an experienced businessman appointed by the creditors, an arrangement to be carried out until the claims of the creditors are fully satisfied.

  
  

  Can you consider the creditors who are parties to the agreement partners? Reasons.
• Partnership by estoppel


  If two persons not partners represent themselves as partners to strangers
• Yes. As long as illegal purposes can be separated from legal purposes


  If a partnership has several purposes, one of which is unlawful, can the partnership still validly exist ?
• No because contract is void from the beginning


  Is a Judicial Decree Needed to Dissolve an Unlawful Partnership?
• Used for prostitution, gambling or in violation of the Friar lands act

  Instances When a Partnership Is Unlawful
• Capital Yes Profit No


  An organization, "Turnuhan Polistico and Co.," was engaged in conducting a lottery among its partners-members every weekend. The members contributed a weekly amount, all of which except a certain amount were distributed in turn to the lottery winners. Obviously, the court had no alternative except to declare the partnership an unlawful one.

  
  

  Issue: Can the partners get back their capital? their profits?
• No so the contract may be oral except when real properties are contributed to which a public instrument is needed

  Is the partnership covered by the Stature of Frauds?
• Void


  When real properties are contributed and a public instrument was not acquired what happens to the partnership?
• Void


  The inventory is important to show how much is due from each partner to complete his share in the common fund and how much is due to each of them in the event of liquidation. Without this, the partnership is?
• Yes otherwise void if real property had been contributed


  A partnership was formed orally though more than P500 was contributed in cash. Now then, under the last paragraph of Art. 1358, contracts "where the amount involved exceeds P500 [such contract] must appear in writing, even a private one."

  
  

  Should the oral partnership formed be considered valid?
• Unenforceable


  If a situation arises where other partners are also without parent's consent for unemancipated minors becoming a partner, the partnership is?
• No, patnership is valid

  Pesayco, a partner in an oral partnership for the catching of fish, with cash as the only contributions thereto refused to account for proceeds of the firm on the ground that the agreement was not in writing. Is he correct?
• Yes


  On Aug. 29, 1952, a partnership was entered into between Mauricio Agad and Severino Mabato "to operate a fishpond." Neither partner contributed a fishpond or a real right to any fishpond. Their contributions were limited to the sum of P1,000 each. The partnership contract was in a public instrument, but an inventory of the fishpond to be operated was not attached to said instrument.

  
  

  •ISSUE: Is the contract of partnership valid?
• No. Mere agreement does not create a patnership


  If two persons agree to form a partnership in the future, does the partnership immediately arise from the moment of said agreement?