Katrina Jolejole (Article 1771-1775)

Q: What is the status of the partnership if it has the minimum capital of P3000.00 but the
contract is not in a public instrument or the same is not recorded in SEC?
A: still acquires juridical personality
Q: What must be done in order that the partnership may be effective as against third persons
whenever immovable property is contributed?
A: To be effective against third parties, partnership must be registered in the Registry of
Property of the province where the real property contributed is located.
Q: Can there be a partnership based on a verbal agreement, and without such agreement being
registered with SEC?
A: Yes. Article 1772
Q: What is the status of the partnership if immovable property is contributed with an inventory
made and signed by the parties but no public instrument was executed?
A: According to de Leon, it is void.
According to Bautista, it is valid but either party may compel execution of public instrument so
it may be registered in the registry of property; nonetheless partnership agreement may be
enforced.
Alfremadelle Pineda (Article 1767-1771)
Q:Is the mutual contribution of money, property, or industry to a common fund, and the
receipt by a person of a share of the profits of a business conclusive evidence that he is a
partner in the business?
A: No., it is not conclusive evidence that he is a partner in the business. According to the NCC, it
is merely a prima facie evidence that he is a partner. However, no such presumption exist if
such profits are payments for the following: (a) Debt payable by installment or otherwise; (b)
wages of an employee or rent to a landlord;(c) annuity to a widow or to a legal representative
of a deceased partner; (d) interest on a loan; or (e) sale of the goodwill of a business or other
property by installments or otherwise.
Q: The partners may stipulate terms/conditions they may deem convenient. By this statement,
may partners enter into an agreement whereby one or more of them shall not share in the
profit and losses? Decide with legal basis.
A: No, they may not. Partners may indeed stipulate terms/condition they may deemed
convenient. Provided, the object or purpose must not be contrary to law, morals, good
customs, public order or public policy otherwise it is void. In the case at bar, Article 1799 of NCC
provides that the stipulation which excludes one or more partners from any share in the profits
and losses is void.
Q: Wilma, Olga and Wynona agreed to form a limited partnership with Wilma and Olga as
General partners contributing P50,000.00 each, and Wynona as Limited partner contributing
P100,000.00. The partnership which is to engage in the trading of garments was named WOW
Garments Co., Limited as indicated in the certificate signed and sworn to by the partners before
a notary public. However, the certificate was not filed with the SEC. In the meantime, the
partners already began operating the business and transacting with the 3rd persons. What will
be the effect of such failure?
A: The Partnership still has juridical personality and will be considered a general partnership.
Accordingly, all partners will be liable with their separate property after the exhaustion of
partnership assets.
Q: TRUE or FALSE. Explain your answer. An artificial person like a corporation may be a partner
in a partnership.
A: False. Philippine jurisprudence has adopted the prevailing rule in the United States that a
corporation cannot ordinarily enter into partnerships with other corporations or with
individuals. The basis for such prohibition on corporations is that in entering into a partnership,
the identity of the corporation is lost or merged with that of another and the direction of the
affairs is placed in other hands than those provided by law of its creation. The previous ruling of
the SEC on the matter is that a corporation cannot enter into a contract of partnership with an
individual or another corporation on the premise that if a corporation enters into a partnership
agreement, it would be bound by the acts of the persons who are not its duly appointed and
authorized agents and officers, which is entirely inconsistent with the policy of the law that the
corporation shall mange its own affairs separately and exclusively. (SEC Opinion, 22 December
1966, SEC FOLIO 1960-1976, at p. 278; citing 6 FLETCHER CYC. CORP., Perm. Ed. Rev. Repl.
1950, Sec. 2520.)
Risty Adarayan (Article )
Q: Is the legal representative of a partner entitled to demand accounting from the partnership?
A: Yes, read Article 1842
Q: Are there instances when the surname of the limited partner may appear in the firm name?
A: Article 1846, when it is also the surname of the general partner and business has been
carried which surname of the limited partner appears.
Q: Can an industrial partner join a limited partnership?
A: Yes, but only as a general partner.
Q: What is the effect if only an aggregate contribution is stated in a limited partnership?
A: The partnership
Bikki Poso (Article 1792-1800)
Q: State the rules on how profits and losses of a partnership are distributed.
A: Article 1797.
Profits: If there is an agreement, according to such agreement. If no agreement, in proportion
to amount of contribution. Industrial partners - just and equitable share.
Losses: According to agreement. If none, according to agreement as to profits. If none, in
proportion to amount of contribution.
Exception: Industrial partner not liable for losses
Q: Who bears the risk of loss of properties contributed to the partnership?
A: Article 1795.
Determinate things/non fungible - partnership
Determinate thing but only the use/ usufruct was contributed- partner who owns it
Fungible/deteriorable - partnership
Contributed to be sold - partnership
Contributed under appraisal - partnership

Q: Bo, joshua, and roger formed a partnership where Bo and Joshua would contribute the
capital and roger would contribute his management skills and expertise. After 2 years the
partnership got bankrupt. The assets of the partnership were not sufficient to satisfy the debts.
May a third party creditor hold roger personally liable?
A: Article 1797 in relation to Article 1816
Yes. After exhausting the capital assets of the firm, all partners may be held jointly liable
including industrial ones. However, unless there is an agreement to the contrary, roger can
recover later on what he has paid from the capitalist partners, Bo and Joshua.
Q: Can an industrial partner engage in a business other than that of the partnership? Is your
answer the same for capitalist partners?
A: No, unless the partnership expressly permits. Art 1789.
No, if it is the same kind of business the partnership is engaged, unless there is a stipulation to
the contrary. Art 1808
Rea Caparal (Articles 1832-1836)

Q: As a general rule, after dissolution of a partnership, a partner can still bind the partnership.
What are its exceptions?

A: Read Article 1834, paragraph 3

Q: Who has the right or duty to wind up or liquidate partnership affairs?

A: Read Article 1836

Q: Is it permissible to stipulate among partners that in case of dissolution of the partnership,
any act of a partner, regardless of actual knowledge or non-knowledge of the death or
insolvency of a partner, a partner or the partnership itself is not bound to such act? Why?
A: No. Read Article 1833

Q: Is judicial declaration of winding up of a partnership necessary? Why?

A: No. Read Article 1836

Kent Caballa (Article 1815-1816)
Q: Suppose the firm name is changed in good faith but the members remain the same, will the
partnership under the new name retain all the rights it had under the old name?
A: Yes. The change of the name is not important, what is important is that it is not done to
defraud third persons and the members remain the same. Article 1815.
Q: May a stranger who includes his name in the firm name held liable as partner?
A: Yes. Stranger who include his name in the firm name liable as partner because of estoppel
but do not have the rights of a partner for he had not enter into any partnership contract.
Article 1815.
Q: Suppose capitalist partners had contributed unequally to the capital will their liability to
strangers be equal or proportionate to their contributions?
A: Proportionate. (Article 1816)
Mikhael Santos (Article 1801-1809)
Q: A, B, and C formed a partnership for the purpose of engaging in livestock business. Without a
previous express authority, A contracted indebtedness for AgriVet Supplies. Is the partnership
liable for such indebtedness?
A: Yes, There being no agreement with regard to the manner of management, all the partners
are considered as agents of the partnership. A must be deemed to have authority to contract
the indebtedness in question inasmuch as it was incurred in the prosecution of the partnership
business. (Article 1803)
Q: In a partnership, a formal accounting was done and was not objected. Subsequently, a
partner contested even though prior to this he did not really object. Is his objection tenable?
A: No, he is already estopped from objecting the formal accounting unless fraud and error are
alleged and proved.
Q: What is the duty of the partners with respect to information affecting the partnership?
A: They shall render on demand true and full information of all things affecting the partnership
to:
1. The partner
2. Legal representative of any deceased or legally disabled partner. (Article 1806)
Q: How are partners accountable to each other as fiduciary?
A: 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, or liquidation of the partnership or from any use by
him of its property. (Article 1807)
Ma. Lucille Lee (Article )
Q: Can a limited partner be liable for partnership obligations?
A: No. A limited partner as such cannot be held liable for partnership obligations. However,
when said limited partner received the return of his contribution and it was discovered that the
remaining assets were insufficient to pay creditors, a creditors claim which arose before the
return should be satisfied out of what has been returned to him. If there is balance, it should be
returned to the limited partner. If there is deficit, the limited partner is not liable anymore
because he is only a limited partner.
Q: Is the interest of a limited partner assignable?
A: Yes. It is assignable under Article 1859.
Q: When can an assignee have the right to become a substituted partner?
A: When all the members consented thereto, or if the assignor is empowered by the certificate
gives the assignee that right. However, he became a substituted limited partner only from the
moment that the said certificate is appropriately amended in accordance with Article 1866.
Q: What are the rights and obligations of a substituted limited partner?
A: He has all the rights and powers and is subject to all the restrictions and liabilities of his
assignor, except those liabilities of which he was ignorant at the time he became a limited
partner and which could not be ascertained from the certificate.
PAREDES
ARTICLES 1810-1811
Q & A IN PARTNERSHIP
1. Is there any difference between a partners right in specific partnership property
belonging to the firm to be used for business purposes and partners right to share in
the earned profits? If theres any, under what classification mentioned above does a
partners interest which can be subject to legal support or maybe levied upon by
judgment creditor of partners in their individual capacity?
Ans. Yes. But in determining the share or interest of a partner which can be maybe levied upon
by judgment creditor insofar as their debt in their individual capacity is concerned it should be
his proportion of the residue or balance after an account has been taken of the debts and
credits, including the amount paid by the several partners in liquidating firm debts or in making
advances to the partnership. Until that occurs, it is impossible to determine the extent of his
interest. This interest in the surplus alone which remains after the firms debts have been paid
and the equities between the partner and his co-partners have been adjusted and the partners
share has been ascertained and set apart, is available for the satisfaction of the separate debts
of the partners.
2. What is the meaning of homestead or exemption laws as contemplated under article
1811 (3) of the NCC? Can you please give an illustration with regard to this specific
provision?
Ans. Sorry, I really dont know the answer of this coz I had a hard time understanding this
provision. Please read article 1811 (3), no further explanation if an homestead ba nga
gnmemean an sa public land act ts nnu an mga exemption laws. Wara n ak maicp nga iba nga
pangutana since 2 articles la nkaassign sa ak
3. Ana, Karen and Nina are partners in real estate business. Ana is personally indebted to
Warlo in the sum of P15, 000.00. Warlo filed a complaint against Ana and obtained from
the court a final judgment in his favor.
a.) If Ana becomes insolvent, what would be the remedy of Warlo?
b.) Granting that Anas interest in the partnership be attached, what would be the rights of
other partners over the same?
Ans. a.) Under article 1811 the general rule states that a separate creditor of a partner cannot
attach or levy upon specific partnership property for the satisfaction of his credit because
partnership assets are reserved for partnership creditors. However, the remedy that can be
availed of by Warlo is to secure a judgment on his credit and then apply to the proper court for
a charging order, subjecting the interest of the debtor partner in the partnership (Art. 1812)
with the payment of the unsatisfied amount of such judgment with interest thereon with the
least interference with the partnership business and the rights of the other partners. By virtue
of the charging order, any amount or portion thereof which the partnership would otherwise
pay to the debtor-partner should instead be given to the judgment creditor.
b.) The other partners, Karen and Nina, may redeem or purchase the charged interest of A, the
debtor-partner, before foreclosure or before the expiration of the redemption period fixed by
the court in its order of sale, without dissolving the partnership but such redemption or
purchase is a ground for the other partners to ask for the dissolution of the partnership.
4. Does the assignee become a partner in a partnership after the conveyance of the partners
interest in a partnership? Why?
Ans. No. The assignee does not necessarily become a partner for he cannot interfere in the
management or administration or demand information, accounting and inspection of the
partnership books.