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2005 CENTRALIZED BAR OPERATIONS
PARTNERSHIP
PARTNERSHIP 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. (Art.
1767)
partner of the partnership may execute all acts of administration including the right to sue debtors of
the partnership in the case of their failure to pay their obligation when it becomes demandable. (Tai
Tong Chuache & Co. vs. Insurance Commission 158 SCRA 336 [1988]) FORM OF PARTNERSHIP
CONRTRACT No special form is required for the validity or existence of the contract of partnership. 1.
Where immovable property or real rights are contributed, the partnership contract shall be void unless:
a. It is reduced to writing in a public instrument (Art. 1771). b. An inventory of the property contributed
is made, signed by the parties and attached to the public instrument. (Art.1773).
contract which states that the partnership is established to operate a fishpond is not rendered void
because no inventory of the fishpond was made (where it did not clearly appear in the articles of
partnership that the real property had been contributed by anyone of the partners). (Agad vs. Mabolo
and Mabolo Agad and Co., 23 SCRA 1223[1968]) 2. Where the contract is by its terms not to be
performed within a year from the making thereof, such partnership contract is covered by the statute offrauds and thus requires a written agreement to be enforceable. 3. Where the contract of partnership
has a capital of 3,000 pesos or more, in money or property, it shall appear in a public instrument and
must be recorded in the Office of the Securities and Exchange Commission. However, a partnership has
a juridical personality even in case of failure to comply with this requirement. Requisites: 1. intention to
create a partnership 2. common fund obtained from the contributions 3. joint interest in the profits
Essential Features: 1. there must be a valid contract; 2. the parties must have legal capacity to enter into
the contract; NOTE: With regard to number 2 (legal capacity of contracting parties), individuals not
legally incapacitated to contract and partnerships may enter into a contract of partnership. With respect
to corporations, the court held in Aurbach vs. Sanitary Wares Manufacturing Corporation 180 SCRA 130
[1989] that although a corporation cannot enter into a partnership contract, it may however engage in ajoint venture with others. A joint venture has been generally understood to mean an organization
formed for some temporary purpose. There is nothing against one corporation being represented by a
natural or juridical person in a suit in court, for the true rule is that although a corporation has no
power to enter a partnership, it may nevertheless enter into a joint venture with another where the
nature of that venture is in line with the business authorized by the charter. (JM Tuazon and Co., Inc vs.
Bolanos 95 PHIL 106 [1954])
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2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), RomualdPadilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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San Beda College of Law
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MEMORY AID IN CIVIL LAW
3. there must be mutual contribution of money, property and industry to a common fund NOTE: A
partnership of a civil nature was formed because Gatchalian & Co. put up money to buy a sweepstakes
ticket for the sole purpose of dividing equally the prize which they may win as they did in fact in the
amount of P50,000. (Gatchalian vs. CIR 67 PHIL 666 [1939]) Where the father sold his rights over 2
parcels of land to his 4 children so they can build their residences, but the latter after 1 year sold them
and paid the capital gains, they should not be treated to have formed an unregistered partnership and
taxed corporate income tax on the sale and on dividend income tax on their shares of the profits from
the sale. (Obillos Jr. vs. CIR [1985]) 4. the object must be lawful; and 5. the primary purpose must be to
obtain profits KEY: CJP3 - D2AFT Partnership Co-ownership
1. Creation Always created by a Generally created by contract, either law, but may exist express or
implied even without a contract 2. Juridical personality Has a juridical Has no juridical personality
separate personality and distinct from that of each partner 3. Purpose Realization of Common
enjoyment profits of a thing or right; does not necessarily involve sharing of profits 4. Duration No
limitation upon An agreement to the duration is set keep the thing by law undivided for more than 10
years is not allowed 5. Transfer of interests A partner may not A co-owner can dispose of his dispose of
his share individual interest in without the consent the partnership so of the others as to make the
assignee a partner without unanimous consent 6. Power to act with third persons In the absence of A
co-owner cannot stipulation to the represent the cocontrary, a partner ownership may bind the
partnership 7. Dissolution Death or incapacity Death or incapacity of a partner results of a co-owner
does in the dissolution of not necessarily partnership dissolve the coownership 8. Agency or
representation As a rule, there is As a rule, there is no mutual agency mutual representation (although it
is enough for a coowner to bring an action for ejectment against a stranger) 9. Profits May be stipulated
Must always depend upon upon proportionate shares and any stipulation to the contrary is VOID
(Art.485) 10. Form May be in any from No public instrument except when real is needed even if property
is real property is the contributed (here a object of the copublic instrument is ownership required)
KEY: CNJPMERET2 - FPG Partnership Corporation
1. Creation Created by mere Created by law agreement of the or by operation parties of law 2. Number
of incorporators May be organized by at Requires at least two persons least five incorporators (except a
corporation sole) 3. Commencement of juridical personality Acquires juridical Acquires personality from
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the juridical moment of execution of personality from the contract of the date of partnership issuance of
the certificate of
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
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incorporation by the Securities and Exchange Commission 4. Powers Partnership may Corporation can
exercise any power exercise only authorized by the the powers partners (provided it is expressly not
contrary to law, granted by law morals, good customs, or implied from public order, public those
granted or policy) incident to its existence 5. Management When management is The power to do not
agreed upon, every business and partner is an agent of manage its the partnership affairs is vested in
the board of directors or trustees 6. Effect of mismanagement A partner as such can sue a co-partner
who mismanages The suit against a member of the board of directors or trustees who mismanages must
be in the name of the corporation
10. Term of existence partnership may be corporation may established for any not be formed period of
time for a term in stipulated by the excess of 50 partners years extendible to not more than 50 years in
any one instance 11. Firm name limited partnership is corporation may required by law to add adopt any
name the word Ltd. To its provided it is name not the same as or similar to any registered firm name
12. Dissolution may be dissolved at any can only be time by any or all of the dissolved with partners the
consent of the State 13. Governing Law governed by the governed by the contract and the Civil
Corporation Code Code
7. Right of succession Partnership has no right of succession Corporation has right of succession
8. Extent of liability to third persons Partners are liable Stockholders are personally and liable only to
subsidiarily (sometimes the extent of solidarily) for the shares partnership debts to subscribed by third
persons them 9. Transferability of interest Partner cannot transfer Stockholder has his interest in the
generally the partnership so as to right to transfer make the transferee a his shares partner without the
without prior unanimous consent of consent of the all the existing partners other because the
partnership stockholders is based on the principle because of delectus personarum corporation is notbased on this principle
JOINT VENTURE
community of interest in the business, sharing of profits and losses, and a mutual right of control.
main distinction in common law jurisdiction is that partnership contemplates a general business with
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some degree of continuity, while joint venture is formed for the execution of a single transaction and is
thus of temporary nature
defined a joint venture as an association of persons or companies jointly undertaking some commercial
enterprise; generally all contribute assets and share risks. Its requisites are: a. A community of interest
in the performance of the subject matter; b. A right to direct and govern the policy in connection
therewith; c. Duty to share profits and losses.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald
Padilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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San Beda College of Law
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MEMORY AID IN CIVIL LAW
NOTE: Under the Civil Code, a partnership may be particular or universal, and a particular partnership
may have for its object a specific undertaking. Hence, a joint venture may be treated like any other
contract, innominate in nature to be regulated and governed primarily by the stipulations of the parties
thereto and suppletorily by the general provisions of the Civil Code on obligations and contracts, by
rules governing the most analogous contracts (e.g. law on partnership), and by the customs of the place.
Other Similar Contracts 1. Collaboration- the act of working together in a joint project. 2. Association-
act of a number of persons uniting together for some special purpose or business. RULES TO DETERMINE
EXISTENCE OF PARTNERSHIP (ART 1769) 1.
-ownership of a
property does not itself establish a partnership, even though the co-owners share in the profits derived
from the incident of joint ownership. 3. Sharing of gross returns alone does not indicate a partnership,
whether or not the persons sharing them have a joint or common right or interest in any property from
which the returns are derived. 4. Receipt of share in the profits is a strong presumptive evidence of
partnership. However, no such inference will be drawn if such profits were received in payment: (a) as a
debt by installments or otherwise; (b) as wages of an employee 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; and CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
(e) as the consideration for the sale of a goodwill of a business or other property by installments orotherwise. CLASSIFICATION OF PARTNERSHIP 1. as to object: a) universal partnership i. universal
partnership of all
present property ii. universal partnership profits of
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b) particular partnership 2. as to liability of partners: a) general partnership b) limited partnership 3. as
to duration: a) partnership at will b) partnership with period 4. as to legality of existence: a) de jure
partnership b) de facto partnership 5. as to representation to others: a) ordinary or real partnership b)
ostensible or partnership by estoppel 6. as to publicity: a) secret partnership b) notorious or open
partnership 7. as to purpose: a) commercial or trading b) professional or non-trading UNIVERSAL
PARTNERSHIP 1. A universal partnership of all present property is one wherein the partners contribute
all the property which actually belong to them to a common fund, with the intention of dividing the
same among themselves, as well as all the profits which they may acquire therewith.
partnership of all present property, the property which belongs to each of the partners at the time of
the constitution of the partnership, becomes the common property of all the partners, as well as
a
fixed
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the profits which they may acquire therewith. A stipulation for the common enjoyment of any other
profits may also be made; but the properties which the partners may acquire subsequently by
inheritance, legacy or donation cannot be included in such stipulation, except the fruits thereof.
Where the articles of partnership do not specify the nature of the universal partnership, whether it is
one of present property or of profits only, it will be presumed that the partiesintended merely a
partnership of profits. NOTE: Future properties cannot be contributed. Thus, property subsequently
acquired by (1) inheritance, (2) legacy or (3) donation cannot be included by stipulation except the fruits
thereof. 2. A universal partnership of profits is one which comprises all that the partners may acquire by
their industry or work during the existence of the partnership and the usufruct of movable orimmovable property which each of the partners may posses at the time of the celebration of the
contract. immovable property which each of the partners may posses at the time of the
celebration of the contract shall continue to pertain exclusively to each, only the usufruct passing to the
partnership. NOTE: Persons who are prohibited from giving each other any donation or advantage
cannot enter into a universal partnership. (Art. 739, Art. 87, Family Code) Profits acquired by their
partners through chance (i.e. lottery) without employment of any physical or intellectual efforts are not
included. PARTICULAR PARTNERSHIP A particular partnership is one which has for its object determinate
things, their use and fruits, or a specific undertaking, or the exercise of a profession or vocation.
GENERAL PARTNERSHIP A partnership consisting of general partners who are liable pro rata and
subsidiarily and sometimes solidarily with their separate property for partnership debts. LIMITED
PARTNERSHIP One formed by two or more persons having as members one or more general partners
and one or more limited partners, the latter not being personally liable for the obligations of the
partnership. PARTNERSHIP AT WILL A partnership wherein no time is specified and is not formed for a
particular undertaking or venture and which may be terminated at anytime by mutual agreement of the
partners, or by the will of anyone partner alone; or one for a fixed term or particular undertaking but
has been continued by the partners after termination of such term or particular undertaking without
express agreement. PARTNERSHIP WITH A FIXED TERM A partnership wherein the term for which the
partnership is to exist is fixed or agreed upon or one formed for a particular undertaking, and upon the
expiration of the term or completion or the particular enterprise, the partnership is dissolved, unless
continued by the partners. OTHER KINDS OF PARTNERSHIP 1. De Jure Partnership- one which has
complied will all the legal requirements for its establishment. 2. De Facto Partnership- one which has
failed to comply with all the legal requirements for its establishment. 3. Ordinary or real partnership-
one which actually exists among the partners and also as to third persons. 4. Ostensible partnership or
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MEMORY AID IN CIVIL LAW
5. Secret partnership- one wherein the existence of certain persons as partners is not avowed or made
known to the public by any of the partners. 6. Open or notorious partnership- one whose existence is
avowed or made known to the public by the members of the firm. 7. Commercial or trading
partnershipone formed for the transaction of business. 8. Professional or non-trading partnership- one
formed for the exercise of a profession. CLASSIFICATION OF PARTNERS 1. as to CONTRIBUTION: a)
Capitalist partner- one who contributes money or property to the common fund. b) Industrial partner-
one who contributes only his industry or personal service. 2. as to LIABILITY: a) General partner- one
whose liability to third persons extends to his separate property, he may either be a capitalist or
industrial partner. b) Limited partner- one whose liability to third persons is limited to his capital
contribution. 3. as to MANAGEMENT: a) Managing partner- one who manages the business or affairs of
the partnership; he may be appointed in the articles of partnership or after constitution of the
partnership. b) Silent partner- one who does not take any active part in the business although he may be
known to be a partner. c) Liquidating partner- one who takes charge of the winding up of the
partnership affairs upon dissolution. 4. Miscellaneous: a) Ostensible partner- one who takes active part
and known to the public as a partner in the business, whether or not he has actual interest in the firm.
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
b) Secret partner- one who takes active part in the business by is not known to be a partner by outside
parties nor held out as a partner by the other partners. c) Dormant partner- one who does not takeactive part in the business and is not known or held out as partner. KEY: CP2L Capitalist Partner
Industrial Partner
1. as to contribution contributes money contributes his or property industry (mental or physical) 2. as to
prohibition to engage in other business Cannot generally cannot engage in engage in the same any
business for or similar enterprise himself as that of his firm 3. as to profits 1. shares in the receives a just
profits according and equitable to agreement share thereon; 2. if none, pro rata to his contribution 4. as
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c) To answer to the partnership for the fruits of the property the contribution of which is delayed, from
the date they should have been contributed to the time of actual delivery d) To preserve the property
with the diligence of a good father of a family pending delivery to the partnership e) To indemnify the
partners for any damages caused to it by the retention of the same or by delay in its contribution. II.
Obligations with respect to contribution of money and money converted to personal use a) To
contribute on the date due the amount he has undertaken to contribute to the partnership b) To
reimburse any amount he may have taken from the partnership coffers and converted to his own
personal use c) To pay the agreed or legal interest, if he fails to pay his contribution on time or in case
he takes any amount from the common fund and converted to his own personal use d) To indemnify thepartnership for the damages caused to it by the delay in the contribution or the conversion of any sum
for his personal benefit. III. Obligation Not to Engage in Other Business for Himself 1. Industrial partner-
cannot engage in any business for himself unless the partnership expressly permits him to do so. The
other partners have the remedy of either excluding the erring partner from the firm or of availing
themselves of the benefits which he may have obtained. Note: The prohibition is absolute and applies
whether the industrial partner is to engage in the same business in which the partnership is engaged or
in any kind of business. It is clear that the reason for the prohibition exists in both cases, which is to
prevent any conflict of interest between the industrial
partner and the partnership and to insure faithful compliance by said partner with his prestation
(Evangelista & Co. vs. Abad Santos, 51 SCRA 416, 1973) 2. Capitalist partner- The prohibition extends
only to any operation which is of the same kind of business in which the partnership is engaged unless
there is a stipulation to the contrary. IV. Obligation to Contribute Additional Capital As a general rule, a
capitalist partner is not bound to contribute to the partnership more than what he agreed to contribute
but in case of an imminent loss of the business, and there is no agreement to the contrary, he is under
obligation to contribute an additional share to save the venture. If he refuses to contribute, he shall be
obliged to sell his interest in the partnership to other partners. V. Obligation of Managing Partner who
Collects Debt Where a person is separately indebted to the partnership and to the managing partner at
the same time, any sum received by the managing partner shall be applied to the two credits in
proportion to their amounts, except where he received it entirely for the account of the partnership, in
which case the whole sum shall be applied to the partnership credit only. Requisites for the application
of the rule: 1) There exists two debts, one where the collecting partner is creditor, the other, where the
partnership is creditor. 2) Both debts are demandable 3) The partner who collects is authorized to
manage and actually manages the partnership. VI. Obligation of Partner Who Receives Share in
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Partnership Credit A partner who receives, in whole or in part, his share in the partnership, when the
others have not collected
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald
Padilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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theirs, shall be obliged, if the debtor should thereafter become insolvent, to bring to the partnership
capital what he received even though he may have given receipt for his share only. Requisites for
application of rule: 1) A partner has received, in whole or in part, his share in the partnership credit 2)
The other partners have not collected their shares. 3) The partnership debtor has become insolvent. VII.
Obligation of Partner for Damages to Partnership Every partner is responsible to the partnership for
damages suffered by it through his fault. He cannot compensate them with the profits and benefits
which he may have earned for the partnership by his industry. VIII. Duty to Render Information Partners
shall render on demand true and full information of all things affecting the partnership to any partner or
the legal representative of any deceased partner of any partner under legal disability. IX. Obligation to
account for any benefit and hold as trustee unauthorized personal profits Every partner must account to
the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent
of the other partners from any transaction connected with the formation, conduct, liquidation of the
partnership or form any use by him of its property. RIGHTS OF A PARTNER: 1. Property rights of a
partner a) His rights in the specific partnership property b) His interest in the partnership c) His right to
participate in the management 2. Right to reimbursement for amounts advanced to the partnership and
to indemnification for risks in consequence of management CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
3. Right to associate with another person in his share 4. Right of access and inspection of partnership
books 5. Right to true and full information of all things affecting the partnership 6. Right to a formalaccount of partnership affairs under certain circumstances NOTE: The ten year period to demand an
accounting by a partner begins at the dissolution of the partnership. 7. Right to have partnership
dissolved under certain conditions. RULES FOR DISTRIBUTION OF PROFITS AND LOSSES 1. Distribution of
profits a) According to their agreement (but not inequitously to defeat Art.1799) b) If none, 1) Share of
capitalist partner shall be in proportion to his capital contribution 2) Industrial partner shall receive such
share as may be just and equitable under the circumstances 2. Distribution of losses a) According to
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their agreement as to losses (but not inequitously to defeat Art.1799) b) If none, according to their
agreement as to profits c) If none, in proportion to his capital contribution, but the purely industrial
partner shall not be liable for the losses A stipulation excluding a partner from any share in the profits or
losses is VOID (Article 1799) Article 1797(2) excludes an industrial partner from losses. Thus, a
stipulation excluding an industrial partner from losses is VALID, but he is NOT exempted from liability
insofar as third persons are concerned. NOTE: In general, LIABILITY refers to responsibility towards third
persons, and LOSSES refers to responsibility as among partners
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CONTRACT OF SUB-PARTNERSHIP
for a division of profits owing to him from the partnership enterprise.
partnership distinct and separate from the main or principal partnership. NOTE: In the absence of
unanimous consent of all the partners, a subpartner does not become a member of the partnership.
Hence, a sub-partner does not acquire the rights of a partner nor is he liable for its debts PROPERTY
RIGHTS OF A PARTNER 1. Right to specific partnership property
specific partnership property belongs to the partnership as a separate juridical personality. The partners
have no actual interest in it until after dissolution. ers to possess specific
assignment of rights of all partners in the same property
except on a claim against the partners
or an interest therein may be acquired in the partnership name. The title so acquired may be conveyed
only in the partnership name subject to the provisions of Article 1819 of the Civil Code. 2. Interest in the
partnership
conveyance by a partner of his interest in the partnership 1. conveyance of his whole interest
partnership may either remain or be dissolved 2. assignee does not necessarily become a partner
3. assignee cannot interfere in the management or administration of the partnership business or affairs
4. assignee cannot demand information, accounting and inspection of the partnership books Remedies
of separate judgment creditor of a partner
his credit to subject the interest of the debtor partner with payment of unsatisfied amount of the
judgment debt Redemption of interest charged 1. General partnership a) with separate property of a
partner; or b) with partnership property, with the consent of all the partners whose interests are not so
charged or sold 2. Limited partnership (interest of limited partner) a) with separate property of any
general partner but NOT with partnership property 3. Right to management participate in the
MANAGEMENT OF PARTNERSHIP I. When the manner of management has been provided for in the
partnership agreement A. When a managing partner has been appointed 1) Appointment in the articles
of partnership a. Power is irrevocable without just or lawful cause
i. to remove him for JUST cause, vote of partners representing controlling interest is necessary to
remove him without just cause or for an UNJUST cause, there must be unanimity including his own vote
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ii.
b. Extent of power
i. if he acts in good faith, he may do all acts of ADMINISTRATION, despite opposition of his partners ii. if
in bad faith, he cannot.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald
Padilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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2) Appointment other than in the articles of partnership a. Power to act may be revoked at any time,
with or without just cause b. Extent of power: as long as he remains manager, he can perform all acts of
administration, but if others oppose and he persists, he can be removed B. When two or more managing
partners have been entrusted with the management of partnership 1)Without specification of their
respective duties and without stipulation requiring unanimity of action Each managing partner may
execute all acts of administration If any of the managing partners should oppose, a) Decision of the
majority of the managing partners shall prevail b) In case of a tie, decision of the partners representing
the controlling interest shall prevail 2) With stipulation unanimity of action requiring b) Unanimous
consent required for alteration of immovable property OBLIGATIONS OF PARTNERS TO THIRD PERSONS
I. Liability for contractual obligations (ART 1816) 1. All partners, including industrial partners, are
personally liable with all their property. Their individual liability is pro rata and subsidiary, unless
otherwise stipulated 2. Liability of partnership for acts of partners a) Acts for apparently carrying on in
the usual way the business of the partnership Act binds the partnership. Partnership is not bound if:
i. ii. acting partner has in fact no authority and the third person knows that the acting partner has no
authority
b) Acts of Strict Dominion or Ownership (acts which are not apparently for carrying on in the usual way
the business of the partnership) Act does not bind the partnership. Partnership is bound if:
i. ii. the act is authorized by all the partners; or they have abandoned the business
Unanimous consent of all the managing partners shall be necessary for the validity of the acts and
absence or inability of any managing partner cannot be alleged When there is an imminent danger of
grave or irreparable injury to the partnership, partner may act alone without the consent of the partnerwho is absent or under disability II. When manner of management has not been agreed upon a) All
partners shall be considered managers and agents CIVIL LAW COMMITTEE
c) Acts in contravention of a restriction on authority
i. Partnership is not liable to third persons having actual or presumptive knowledge of the restrictions
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II. Liability arising from partners tort (ART 1822) or Breach of Trust (ART 1823) 1. Where, by any
wrongful act or omission of any partner acting in the ordinary course of business of the partnership or
with authority of his co-partners, loss or injury is caused to any person,
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
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not being a partner in the partnership (Article 1822) 2. Where one partner, acting within the scope of his
apparent authority, receives money or property of a third person and misapplies it (Article 1823) 3.
Where the partnership, in the course of its business, receives money or property and it is misapplied by
any partner while it is in the custody of the partnership (Article 1823) NOTE: All partners are solidarily
liable with the partnership for any penalty or damage arising from a partnership tort or breach of trust
III. Criminal liability of partnership ity does not extend to criminal liability where the
wrongdoing is regarded as individual in character. But where the crime is statutory, especially when it
involves a fine rather than imprisonment, criminal liability may be imposed LIABILITY OF STOCKHOLDERS
IN A DEFECTIVELY FORMED CORPORATION o attempt but fail toform a corporation and carry on business under the corporate name occupy the position of partners
inter se. Thus where persons associate themselves together under articles to purchase property to carry
on a business, and their organization is so defective as to come short of creating a corporation within
the statute, they become in legal effect partners inter-se.
subscribe for stock in a proposed corporation, which was never legally formed, does not become a
partner with other subscribers who engage in business under the name of the pretended corporation, so
as to be liable as such in an action for settlement of the alleged partnership and contribution. (Pioneer
Insurance & Surety Corporation vs. Court of Appeals, 175 SCRA 668 [1989].)
PRINCIPLE OF DELECTUS PERSONARUM
become a member of the partnership without the consent of all the partners. NOTE: This element of
delectus personae is true only in case of a general partner, but NOT as regards a limited partner.
MUTUAL AGENCY
his own behalf, and as an agent of his co-partners and the partnership. Requisites When A Partner Binds
The Partnership 1. when he is expressly or impliedly authorized 2. when he acts in behalf and in the
name of the partnership PARTNERSHIP BY ESTOPPEL ises when a person, by words spoken or
written or by conduct, represents himself or consents to another representing him to anyone, as partner
in an existing partnership, or with one or more persons not actual partners; he is liable to any such
person to whom such representation has been made, who has, on the faith of such representation given
credit to the actual or apparent partnership. (Art 1825) NOTE: Art. 1825 does not create a partnership as
between the alleged partners. A contract, express or implied is essential to the creation of partnership.
The law considers them partners and the association as a partnership insofar as it is favorable to third
persons. However, partnership liability is created only in favor of persons who on the faith of such
representation given credit to the actual or apparent partnership
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2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), RomualdPadilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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DISSOLUTION y any partner ceasing to be associated in
business together. It represents the demise of a partnership. NOTE: The dissolution of a partnership
must not be understood in the absolute and strict sense so that at the termination of the object for
which it was created the partnership is extinguished. (Testate of Mota vs. Serra, 47 PHIL 464, 1926.)
Dissolution does not automatically result in the termination of the legal personality of the partnership,
nor the relations of the partners among themselves who remain as co-partners until the partnership is
terminated. WINDING UP he partnership business or affairs after dissolution.
TERMINATION
the partnership life. CAUSES OF DISSOLUTION 1. Extrajudicial dissolution (ART 1830) - the parties may
agree to expand the grounds provided under Art 1830 but NOT to delimit them. The causes enumerated
are as follows: a. Without violation of the agreement between the partners
i. By the termination of the definite term or particular undertaking specified in the agreement; By the
express will of any partner, who must act in good faith, when no definite term or particular undertaking
is specified; By the express will of all the partners who have not assigned their interest or suffered them
to be charged for their separate debts, either before or after the termination of any specified term or
particular undertaking; By the expulsion of any partner from the business bona fide in accordance with
such power conferred by the agreement between the partners;
iv.
b. In contravention of the agreement between the partners, where the circumstances do nor permit a
dissolution under any other provision of this article by the express will of any partner at any time. c. By
any event which makes it unlawful for the business of the partnership to be carried on or for themembers to carry it on in partnership. d. When a specific thing, a partner had promised to contribute,
perishes before its delivery. Or where the partner only contributed the use or enjoyment of the thing
and has reserved ownership thereof, its loss, before or after delivery dissolves the partnership. e. By the
death of any partner; f. By the insolvency of any partner or the partnership; g. By the civil interdiction of
any partner; 2. Judicial dissolution (ART 1831) when so decreed by the court, the presiding judge may
place the partnership under receivership and direct an accounting to be made towards winding up the
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partnership affairs. On application by or for any partner, the court shall decree a dissolution whenever:
a. A partner has been declared insane in any judicial proceeding or is shown to be of unsound mind; b. A
partner becomes in any other way incapable of performing his part of the partnership contract; c. A
partner has been guilty of such conduct as tend to affect
ii.
iii.
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: AlnaizaHassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
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prejudicially the carrying on of the business; d. A partner willfully or persistently commits a breach of
the partnership agreement, or otherwise so conducts himself in matters relating to the partnership
business that it is not reasonably practicable to carry on the business in partnership with him. e. The
business of the partnership can only be carried on in a loss; f. Other circumstances render a dissolution
equitable. On application of the purchaser of a partners interest under Article 1813 or 1814: a. After the
termination of the specified term or particular undertaking; b. At any time if the partnership was a
partnership at will when the interest was assigned or when the charging order was issued. EFFECTS OF
DISSOLUTION A. As to partners authority to act for the partnership Dissolution terminates all authority
of any partner to act for the partnership 1. Acts necessary to wind up partnership affairs 2. Actsnecessary to complete transactions begun but not then finished Note: Thus, dissolution terminates the
ACTUAL authority of a partner to undertake NEW business for the partnership QUALIFICATIONS TO THE
GENERAL RULE: 1. With respect to the partners (in so far as partners themselves are concerned) a)
Dissolution is not by act, insolvency or death of a partner: General Rule applies. Hence, dissolution
terminates the ACTUAL authority of a partner to undertake NEW business for the partnership
b) Dissolution is by act, insolvency or death of a partner: Authority of partners inter se to act for the
partnership is NOT deemed terminated. Thus, each partner is liable to his co-partners for his share of
any liability created by any partner acting for the partnership as if the partnership has not been
dissolved 1) The cause of dissolution is the ACT of a partner and the acting partner had KNOWLEDGE of
such dissolution 2) The cause of dissolution is the DEATH or INSOLVENCY of a partner and the acting
partner had KNOWLEDGE or NOTICE of such dissolution 2. With respect to persons not partners (third
persons) a) When partnership is bound to third persons after dissolution 1) Act appropriate for winding
up partnership affairs 2) Act appropriate for completing unfinished transactions 3) Completely NEW
transaction which would bind the partnership if dissolution had not taken place provided: the other
party is in good faith, meaning: i. Previous creditor (had previously extended credit) AND he had NO
KNOWLEDGE or NOTICE of the dissolution, OR ii. NOT a previous creditor AND the fact of dissolution had
not been published in a newspaper of general circulation b) When partnership is NOT bound to third
persons after dissolution 1) Where partnership was dissolved because it was unlawful to carry on the
business, except when the act is for winding up
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
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Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald
Padilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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2) Where the acting partner in the transaction has become insolvent 3) Where the partner is
unauthorized to wind up, except if the transaction is with third persons in good faith (under the same
circumstances as defined above) 4) Where act is NOT appropriate for winding up partnership affairs or
for completing unfinished transactions 5) completely NEW transaction which would bind the partnership
if dissolution had not taken place with third persons in bad faith B. As to partners existing liabilit y
Dissolution does not automatically discharge the existing liability of any partner A partner may be
relieved from all existing liabilities upon dissolution ONLY by an agreement between: 1. Partner
concerned 2. Other partners 3. Partnership creditors Note: The consent of the partnership creditors and
the other partners to the novation may be implied from their conduct. RIGHTS OF A PARTNER UPON
DISSOLUTION 1. Where dissolution is NOT in contravention of the partnership agreement a) To have
partnership property applied to discharge partnership liabilities b) To receive in cash his share of the
surplus 2. Where dissolution is in contravention of the partnership agreement a) Rights of a partner who
has not caused the dissolution wrongfully 1) To have partnership property applied to discharge
partnership liabilities CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
2) To receive in cash his share of the surplus 3) To be indemnified for damages caused by the partner
guilty of the wrongful dissolution 4) To continue the business in the same name during the agreed term
of the partnership, by themselves or jointly with others 5) To possess partnership property should they
decide to continue the business b) Rights of a partner who has wrongfully caused the dissolution 1) Ifthe business is not continued by the other partners
i. To have partnership property applied to discharge partnership liabilities To receive in cash his share of
the surplus less damages caused by his wrongful dissolution To have the value of his interest in the
partnership at the time of the dissolution, surplus less damages caused by his wrongful dissolution to his
co-partners, ascertained and paid in cash or secured by a bond approved by the court; AND To be
released from all existing and future liabilities
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ii.
2) If the business is continued
i.
ii.
NOTE: The value of the goodwill of the business is not considered in ascertaining the value of the
interest of the guilty partners. RIGHTS OF A PARTNER WHERE PARTNERSHIP CONTRACT IS RESCINDED
ON THE GROUND OF FRAUD OR MISREPRESENTATION (NOTE: The following are the rights of the partner
entitled to rescind) 1. Right of LIEN on, or RETENTION of, the surplus of partnership property after
satisfying partnership liabilities
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2005 CENTRALIZED BAR OPERATIONS
for any sum of money paid or contributed by him 2. Right of SUBROGATION in place of the partnership
creditors after payment of partnership liabilities; and 3. Right of INDEMNIFICATION by the guilty partner
against all debts and liabilities of the partnership MANNER OF WINDING UP 1. Extrajudicialby the
partners themselves without the intervention of the court 2. Judicialunder the control and direction of
the court upon proper cause shown by any partner, his legal representative or his assignee PERSONS
AUTHORIZED TO WIND UP 1. partners designated by the agreement 2. in the absence of such
agreement, all partners who have not wrongfully dissolved the partnership 3. legal representative of last
surviving partner not insolvent ORDER OF PAYMENT IN WINDING UP 1. General Partnership (ART 1839
(2)) a) those owing to creditors other than partners b) those owing to partners other than for capital orprofits c) those owing to partners in respect of capital d) those owing to partners in respect of profits 2.
Limited Partnership (ART 1863) a) those owing to creditors, except those to limited partners on account
of their contribution, and to general partners b) those owing to limited partners in respect of their share
of the profits and other compensation by way of income c) those owing to limited partners in respect of
their capital contributions d) those owing to general partners other than for capital and profits e) those
owing to general partners in respect of profits f) those owing to general partners in respect of capital
DOCTRINE OF MARSHALLING OF ASSETS (Article 1839(8)) 1. Partnership creditors have preference in
partnership assets 2. Separate or individual creditors have preference in separate or individual
properties 3. Anything left from either goes to the other PARTNERS LIEN tner to
have the partnership property applied to discharge partnership liabilities AND to have the surplus
assets, if any, distributed in cash to the respective partners, after deducting what may be due to the
partnership from them as partners. LIMITED PARTNERSHIP
as members one or more general partners and one or more limited partners, the latter not being
personally liable for partnership debts. NOTE: The Supreme Court, declared a firm to be a general
partnership in a case where it appears that the inclusion of Ltd. (limited) in the firmwas only a
subterfuge resorted to by the partners in order to evade liability for possible losses, while assuming their
enjoyment of advantages to be derived from the relation. Jo Chung Cang vs. Pacific Commercial Co. 45
PHIL 142 [1923]). In other words if the parties intended a general partnership, they are general partners
although their purpose is to avoid the creation of such a relation. Characteristics of Limited Partnership
1. Limited partnership is formed by substantial compliance in good faith with the statutory requirements
2. One or more general partners control the business and are personally liable to creditors 3. One or
more limited partners contribute to the capital and share in the profits but do not participate in the
management of the business and are not personally liable for
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2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), RomualdPadilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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partnership obligations beyond the amount of their capital contributions 4. The limited partners may ask
for the return of their capital contributions under the conditions prescribed by law 5. The partnership
debts are paid out of the common fund and the individual properties of the general partners Limited
Partner/Partnership General Partner/ Partnership
5. Transferability of interest Limited partners interest is freely assignable, with assignee acquiring all the
rights of the limited partner subject to certain qualifications General partners interest in the partnership
may not be assigned as to make the assignee a new partner without the consent of the other partners,
although he may associate a third person with him in his share 6. Inclusion of partners name in the firm
name Name of a general partner may appear in the firm name
1. Extent of liability Limited partners General liability extends only to partner is his capital contribution
personally liable for partnership obligations 2. Right to participate in the management of partnership
Limited partner has no General share in the partners have management of a an equal right limited
partnership and in the renders himself liable to management of partnership creditors as the business a
general partner if he (when the takes part in the control manner of of the business management has not
been agreed upon) 3. Contribution Limited partner must General contribute cash or partner may
property to the contribute partnership but not money, services property or industry to the partnership
4. Proper party to proceedings by or against the partnership Limited partner is not a proper party to
proceedings by or against a partnership Unless: 1. he is also a general partner, or 2. where the object of
the proceeding is to enforce a limited partners right against or liability to the partnership General
partner is the proper party to proceedings by or against a partnership
As a general rule, name of a limited partner must not appear in the firm name
7. Prohibition to engage in other business No such prohibition in the case of a limited partner who is
considered a mere contributor to the partnership General partner is prohibited from engaging in a
business which is of the SAME kind of business in which the partnership is engaged, if he is a capitalist
partner, or in ANY of business for himself if he is an industrial partner
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8. Effect of retirement, death, insanity or insolvency Retirement, death, insanity or insolvency of a
limited partner does not dissolve the partnership for his executor or administrator shall have the rights
of a limited partner for the purpose of selling his estate Retirement, death, insanity or insolvency of a
general partner dissolves the partnership
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
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9. Creation Limited partnership is General created by the members partnership, as after substantial a
general rule, compliance in good may be faith with the constituted in requirements set forth any form
by by law contract or conduct of the partnership 10. Members of the partnership Composed of one or
Composed only more general partners of general and one or more limited partners partners 11. Firm
name Firm name must be No such followed by the word requirement Limited 12. Rules governing
dissolution and winding up Governed by Art. 1839 Governed by Art. 1863
As to third persons or creditors guilty of estoppel, the firm shall not be treated as a general partnership
despite lack of substantial compliance to the requirements of a limited partnership. If creditors deal with
the firm as a limited partnership, they will be estopped from insisting that there is no such partnership,
or that the terms of the partnership were not sufficiently stated in the notice of its formation. (40 Am.
Jur. 476.) CONTENTS OF THE CERTIFICATE OR ARTICLES OF LIMITED PARTNERSHIP 1. Name of the
partnership, adding thereto the word limited; 2. Character of the business; 3. Location of the principal
place of business; 4. Name and place of residence of each member, general and limited partners being
respectively designated; 5. Term for which the partnership is to exist; 6. Amount of cash and description
of and the agree value of the other property contributed by each limited partner; 7. Additional
contributions to be made by each limited partner and the times at which or events on the happening of
which they shall be made; 8. Time, if agreed upon, when to contribution of each limited partner is to be
returned; 9. Share in the profits or other compensation by way of income which each limited partner
shall receive by reason of his contribution; 10. Right, if given, of a limited partner to substitute an
assignee as contributor in his place, and the terms and conditions of the substitution; 11. Right, if given,
of the partners to admit additional partners; 12. Right, if given, of one or more of the limited partners to
priority over other limited partners, as to contributions or as to compensation by way of income, and
the nature of such priority;
ESSENTIAL REQUIREMENTS FOR FORMATION OF LIMITED PARTNERSHIP 1. A certificate or articles oflimited partnership which states the matters enumerated in Article 1844, which must be signed and
sworn; 2. Such certificate must be filed for record in the Office of the Securities and Exchange
Commission. NOTE: A strict compliance with the legal requirements is not necessary. It is sufficient that
there is substantial compliance in good faith. If there is no substantial compliance, the partnership
becomes a general partnership as far as third persons are concerned, in which all the members are liable
as general partners. (Jo Chung Cang vs. Pacific Commercial Co., 45 PHIL 142 [1923].) However, a firm
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which fails to substantially comply with the formal requirements of a limited partnership is a general
partnership only as to its relations to third persons. The firm is a limited partnership, subject to all rules
applicable to such partnership; and as between the partners they are bound by their agreement; and
that all the limited partners relations to his co-partners and their obligations to him growing out of the
relation remain unimpaired.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald
Padilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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MEMORY AID IN CIVIL LAW
13. Right, if given, of the remaining general partner or partners to continue the business on the death,
retirement, civil interdiction, insanity or insolvency of a general partner; and 14. Right, if given, of a
limited partner to demand and receive property other than cash in return of his contribution. LIABILITY
FOR FALSE STATEMENT IN CERTIFICATE Any partner to the certificate containing a false statement is
liable to one who suffers loss by reliance on such certificate provided the following requisites are
present: 1. He knew the statement to be false at the time he signed the certificate, or subsequently
having sufficient time to cancel or amend it or file a petition for its cancellation or amendment, he failed
to do so; 2. The person seeking to enforce liability has relied upon the false statement in transacting
business with the partnership; 3. The person suffered a loss as a result of reliance upon such false
statement. MANAGEMENT OF LIMITED PARTNERSHIP
vested with the entire control of the firms business and has all the rights and powers and is subject to
all the liabilities and restrictions of a partner in a general partnership.
partnership however has no authority, without written consent or ratification of all limited partners, to:
1. Do any act in contravention of the certificate; 2. Do any act which would make it impossible to carry
on the ordinary business of the partnership; 3. Confess judgment against the partnership; CIVIL LAW
COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
4. Possess partnership property, or assign their rights in specific partnership property, for other that a
partnership purpose; 5. Admit a person as a general partner; 6. Admit a person as a limited partner,unless the right to do so is given in the certificate 7. Continue the business with the partnership property
on the death, retirement, insanity, civil interdiction or insolvency of a general partner, unless the right to
do so is given in the certificate. general partner for the firms obligations
if he takes part or interferes in the management of the business. RIGHTS OF A LIMITED PARTNER KEY:
BIF2AR2 1. To have the partnership books kept at the principal place of business of the partnership 2. To
inspect, at a reasonable hour, partnership books and copy any of them 3. To demand true and full
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information of the things affecting the partnership 4. To demand a formal account of the partnership
affairs whenever circumstances render it just and reasonable 5. To ask for dissolution and winding up by
decree of court 6. To receive a share in the profits or other compensation by way of income provided:
that the partnership assets are in excess of partnership liabilities after such payment 7. To receive the
return of his contribution provided: a) All the liabilities of the partnership have been paid OR the
partnership assets are sufficient to pay partnership liabilities b) The consent of all the members (general
and limited partners) has been obtained
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When the return of the contribution may be rightfully demanded: 1) On the dissolution of the
partnership 2) Upon the arrival of the date specified in the certificate for the return 3) After he has given
6 months notice in writing to all other partners, if no time is specified in the certificate their for the
return of the contribution or for the dissolution of the partnership c) The certificate is cancelled or so
amended as to set forth the withdrawal or reduction LIABILITIES OF A LIMITED PARTNER 1. Liability for
unpaid contribution a) For the difference between his contribution as actually made and that stated in
the certificate as having been made; AND b) For any unpaid contribution which he has agreed in the
certificate to make in the future at the time and the conditions stated in the certificate 2. Liability as
trustee a) Specific property stated in the certificate as contributed by him, but which was notcontributed or which has been wrongfully returned; AND b) Money or other property wrongfully paid or
conveyed to him on account of his contribution NOTE: These liabilities can be waived or compromised
only by consent of all the members; but a waiver or compromise shall NOT affect the right of a creditor
of a partnership who extended credit or whose claim arose after the filling and before the cancellation
or amendment of the certificate, to enforce such liabilities.
SUBSTITUTED LIMITED PARTNER
of has assigned his interest in the partnership. RAL RULE: He has all, the rights and powers, and is
subject to all the restrictions and liabilities of his assignor. Those liabilities which he was ignorant at the
time he became a limited partner AND which could not be ascertained from the certificate. REQUISITES
IN ORDER THAT THE ASSIGNEE MAY BECOME A SUBSTITUTED LIMITED PARTNER 1. All the members
must consent to the assignee becoming a substituted limited partner, OR the limited partner, being
empowered by the certificate must give the assignee the right to become a limited partner 2. The
certificate must be amended in accordance with Art.1865 3. The certificate as amended must be
registered in the Securities and Exchange Commission ALLOWABLE TRANSACTIONS OF A LIMITED
PARTNER
partnership 2. transacting other business with the partnership 3. receiving a pro rata share of the
partnership assets with the general creditors if he is NOT also a general partner NOTE: In transacting a
business with the partnership as a non-member, the limited partner is considered a nonpartner creditor
PROHIBITED TRANSACTIONS OF A LIMITED PARTNER 1. receiving or holding as collateral security any
partnership property; or 2. receiving any payment, conveyance, or release from liability if it will
prejudice the partnership creditors
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2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald
Padilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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San Beda College of Law
169
MEMORY AID IN CIVIL LAW
NOTES:
assets are sufficient to discharge partnership liabilities to persons not claiming as general or limited
partners.
3. Agent can return the object in case he is unable to sell the same 4. Bound to act according to the
instructions of his principal. 3. the buyer, as a rule, cannot return the object sold 4. The buyer can deal
with the thing as he please being the owner.
AGENCY
CONTRACT OF AGENCY
to do something in representation or on behalf of another (principal), with the consent or authority of
the latter. (Article 1868) - one whom the agent represents
and from whom he derives authority; he is the person represented. 2. Agent- one who acts for and
represents another; he is the person acting in a representative capacity. AGENCY
1. Principle of representation is applied. 2. Extinguished at will of the principal. 3. Agent exercise
discretionary power to attain an end for which he was appointed. 4. Preparatory Contract
PURPOSE OF AGENCY
facility of the agent. It enables the activity of man which is naturally limited in its exercise by the
impositions of his physiological conditions to be legally extended by permitting him to be constructively
present in many different places and to perform diverse juridical acts and carry on many different
activities through another when physical presence is impossible or inadvisable at the same time. (11
Manresa 434) ELEMENTS OF AGENCY A. Consent
whom the agent acts or contracts, the legal capacity of the principal rather than the agent, is of the
greater import. B. Object
extent of the agents authority to act, whether it be a general or a special agency, depends on how the
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agency is couched. C. Cause
agent may not be deprived of his right to compensation by an unjustified revocation of the agency
LEASE OF SERVICES
1. Principle of employment is applied. 2. Concurrence of parties is necessary. 3. Employee exercise
ministerial functions only. 4. Principal Contract
AGENCY TO SELL
1. Agent receives the goods as the goods of the principal. 2. Agent delivers the proceeds of the sale
SALE
1. The buyer receives goods as owner 2. Buyer pays the price.
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
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2005 CENTRALIZED BAR OPERATIONS
KINDS OF AGENCY 1. as to manner of creation a) express- one where the agent has been actually
authorized by the principal, either orally or in writing; b) implied- one which is implied from the
i. acts of the principal- from his silence or lack of action, or his failure to repudiate the agency knowing
that another person is acting on his behalf without authority. Acts of the agent- when he carries out the
agency, or from his silence or inaction according to the circumstances.
ACTS WHICH MAY BE DELEGATED TO AN AGENT person, he may do thru another. 1. Personal actsifpersonal performance is required the doing of an act by a person on behalf of another does not
constitute performance by the latter. a) Voting during an election; b) Making a will; c) Making
statements which are required to be done under oath; d) A member of the board of directors or trustees
in a corporation cannot validly act as such by proxy e) An agent cannot delegate to a sub-agent the
performance of acts which he has been appointed to perform in person. 2. Criminal Acts or Acts not
allowed by law- There can be no agency in the perpetration of a crime or unlawful act. Examples: a) An
alien principal using an agent to acquire lands; b) Persons who, because of their position and relation
with the persons under their charge or property under control, are prohibited from acquiring said
property and cannot do so through an agent. FORM OF AGENCY
from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency,knowing that another person is acting on his behalf without authority. (Article 1869) NOTE: In an implied
agency, the principal is still bound by the acts of the agent just as in case of express agency There are no
formal requirements governing the appointment of an agent. The agents authority may be oral or
written. It may be in a public or private writing. When the law requires a specific form
ii.
2. as to its character a) gratuitous- one where the agent receives no compensation for his services. b)
compensated or onerousone where the agent receives compensation for his services. 3. as to extent of
business covered a) general- one which comprises all the business of the principal; b) special- one which
comprises one or more specific transactions. 4. as to authority conferred a) couched in general
termsone which is created in general terms and is deemed to comprise only acts of administration; b)
couched in specific termsone authorizing only the performance of a specific act or acts. 5. as to its
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nature and effects a) ostensible or representative- one where the agent acts in the name and in
representation of the principal. b) simple or commission- one where the agent acts in his own name but
for the account of the principal.
2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), Romuald
Padilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
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San Beda College of Law
171
MEMORY AID IN CIVIL LAW
IMPLIED ACCEPTANCE
1. De Jure Agent 2. Binds the principal for acts within the scope of his authority.
AGENCY BY ESTOPPEL
1. Not really an agent 2. Only the purported agent is liable.
and he did not reply to the letter or telegram RULE ON AGENCY BY ESTOPPEL
with apparent authority as his agent, and holds him out to the public as such, cannot be permitted to
deny the authority of such person in good faith, and in the honest belief that he is what he appears to
be. (Cuison vs. CA, GR.88531, October 26, 1993) CLASSES AND KINDS OF AGENTS 1. Universal Agent- one
employed to do all acts that the principal may personally do, and which he can lawfully delegate to
another the power of doing. 2. General Agent- one employed to transact all the business of the
principal, or all the business of a particular kind or in a particular place, or in other words to do all acts,
connected with a particular trade, business or employment. 3. Special or Particular Agent- one
authorized to act in one or more specific transactions, or to do one or more specific acts, or to act upon
a particular occasion. General Agent Special Agent
Example: Sale of a piece of land or any interest therein through an agent: NOTES:
ould be in writing in order to
be enforceable.
conferred in writing and must give him specific authority, either to conduct the general business of the
principal or to execute a binding contract containing terms and conditions which are in the contract hedid execute. (Dizon et al. vs. CA et al., GR 124741, January 28, 2003) FORM OF ACCEPTANCE BY AGENT
Acceptance by the agent may also be express or implied from his acts which carry out the agency, or
from his silence or inaction according to the circumstances Kinds of Implied Acceptance 1. Where
persons are present
agent and b. agent receives it without any objection 2. Where persons are absent Acceptance cannot be
implied from silence of the agent 1. principal transmits his power of attorney to the agent, who receives
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it without any objection; 2. principal entrusts to him by letter or telegram a power of attorney with
respect to the business in which he is habitually engaged as an agent, CIVIL LAW COMMITTEE
1. Scope of Authority Usually authorized to do all acts connected with the business or employment in
which he is engaged. Authorized to do only acts in pursuance of particular instructions or with
restrictions necessarily implied from the acts to be done
2. Continuity Conducts a series of transactions involving a continuity of service. Usually involves a single
transaction or a series of transactions not involving continuity
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
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San Beda College of Law
173
MEMORY AID IN CIVIL LAW
NOTES: gage
includes the power to allow the extrajudicial foreclosure of the mortgaged property.
court to eject all persons in the principals lots so that the principal could take material possession
thereof, and for this purpose, to appear at the pre-trial and enter into any stipulation of facts and/or
compromise agreement but only insofar as this is protective of the rights and interests of the principal in
the property, does not grant any power to the agent to sell the subject property nor a portion thereof.
(Cosmic Lumber Corp vs. CA 265 SCRA 168) EFFECT OF LACK OF SPA WHERE ONE IS REQUIRED:
UNENFORCEABLE When principal bound by act of agent 1. Agent must act within the scope of his
authority 2. Agent must act in behalf of the principal NOTE: The limits of the agents authority shall not
be considered exceeded should it have been performed in a manner more advantageous to the principal
than that specified by him. When a person NOT bound by act of another 1. Latter acts without or
beyond the scope of his authority in the formers name; and 2. Latter acts within the scope of his
authority but in his own name (UNDISCLOSED PRINCIPAL), except when the transaction involves a thing
belonging to the principal. In such case, the contract is deemed as entered between the principal and
the third person. EFFECTS OF AGENTS ACTS 1. With Authority a. in principals name valid; principal is
bound; agent not personally liable unless he bound himself (Article 1897) b. in his own nameApplyArticle 1883; generally not binding on the principal; agent and stranger are the only parties, except
regarding things belonging to the principal or when the principal ratifies the contract or derives benefit
therefrom. 2. Without Authority a. in principals name unauthorized and unenforceable but may be
ratified, in which case, may be validated retroactively from the beginning (Article 1407) b. in his own
namevalid, whether or not the subject matter belongs to the principal, provided that at the time of
delivery, the agent can transfer legally the ownership of the thing. Otherwise, he will be held liable for
breach of warranty against eviction; Article 1883 does NOT apply OCCASIONS WHEN PRINCIPAL IS
BOUND BY THE ACTS OF THE AGENT BEYOND THE LATTERS POWERS General Rule: The principal is not
bound by the acts of the agent beyond his limited powers. Exceptions: 1. Where the principals acts have
contributed to deceive the third person in good faith; 2. Where the limitations upon the power createdby him could not have been known by the third person; 3. Where the principal has placed in the hands
of the agent instruments signed by him in blank (Strong vs. Gutierrez Repide 6 PHIL 680 [1906]) 4.
Where the principal has ratified the acts of the agent.
CIVIL LAW COMMITTEE
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CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza
Hassiman, Dorothy Gayon SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family
Relations), Alejandro Casabar(Property), Ma. Rhodora Ferrer(Wills and Succession), Ian Dominic
Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen Quiambao(PAT),
Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
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174
2005 CENTRALIZED BAR OPERATIONS
Doctrine of Agency by Necessity t
is correspondingly enlarged in order to cope with the exigencies or the necessities of the moment
Requisites: 1. Real existence of an emergency 2. Inability of the agent to communicate with the principal
3. Exercise of the additional authority for the principals own protection 4. Adoption of fairly reasonable
means, premises duly considered NOTE: Agency can never be created by necessity; what is created is
additional authority in an agent appointed and authorized before the emergency arose. GENERAL
OBLIGATIONS OF AGENT TO PRINCIPAL: 1. To act with utmost good faith and loyalty for furtherance of
principals interests 2. To obey all lawful orders and instructions of principal within the scope of the
agancy 3. To exercise reasonable care, skill and diligence SPECIFIC OBLIGATIONS OF AGENT TOPRINCIPAL 1. To carry out the agency which he has accepted 2. To answer for damages which through
his performance the principal may suffer 3. To finish the business already begun on the death of the
principal should delay entail any danger 4. To observe diligence of a good father of a family in the
custody and preservation of the goods forwarded to him by the owner in case he declines an agency,
until an agent is appointed 5. To advance the necessary funds should there be a stipulation to do so 6.
To act in accordance with the instructions of the principal, and in default thereof, to do all that a good
father of a family would do
7. Not to carry out the agency if its execution would manifestly result in loss or damage to the principal
8. To answer for damages if there being a conflict between his interest and those of the principal, he
should prefer his own 9. Not to loan to himself if he has been authorized to lend money at interest 10.
To render an account of his transactions and to deliver to the principal whatever he may have received
by virtue of the agency 11. To distinguish goods by countermarks and designate the merchandise
respectively belonging to each principal, in the case of a commission agent who handles goods of the
same kind and mark, which belong to different owners 12. To be responsible in certain cases for the acts
of the substitute appointed by him 13. To pay interest on funds he has applied to his own use 14. To
inform the principal, where an authorized sale of credit has been made, of such sale 15. To bear the risk
of collection, should he receive also on sale, a guarantee commission 16. To indemnify the principal for
damages for his failure to collect the credits of his principal at the time that they become due 17. To be
responsible for fraud or negligence NOTE: A stipulation exempting the agent from the obligation to
render an account shall be VOID. Knowledge of agent is knowledge of principal. 1. Agents interests are
adverse to those of the principal 2. Agents duty is not to disclose the information (confidential
information) 3. Where the person claiming the benefit of the rule colludes with the agent to defraud the
principal
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2005 CENTRALIZED BAR OPERATIONS EXECUTIVE COMMITTEE AND SUBJECT CHAIRPERSONS Maricel
Abarentos (Over-all Chairperson), Ronald Jalmanzar (Over-all Vice Chair), Yolanda Tolentino(VC-Acads),
Jennifer Ang(VC- Secretariat), Joy Inductivo (VC-Finance), Elaine Masukat (VC-EDP), Anna Margarita Eres
(VC-Logistics) Jonathan Mangundayao (Political Law), Francis Benedict Reotutar (Labor Law), RomualdPadilla (Civil Law), Charmaine Torres (Taxation Law), Mark David Martinez (Criminal Law), Garny Luisa
Alegre (Commercial Law), Jinky Ann Uy (Remedial Law), Jackie Lou Bautista (Legal Ethics)
-
8/12/20