Sie sind auf Seite 1von 10

RIGHTS AND OBLIGATIONS WITH RESPECT TO b.

In case of tie, matter shall be decided by


MANAGEMENT the vote of the partners owning the
controlling interest.
(Art. 1800)
*Right to oppose can be exercise only by those
APPOINTED AS MANAGER AFTER THE CONSTITUTION entrusted with management.
OF THE PARTNERSHIP
2. Respective duties specified
Partner appointed in arts of partnership may execute
all acts of administration notwithstanding the The decision of the partner concerned shall
opposition of the other partners, unless he should act prevail subject only to the limitation that he
in bad faith. His power is revocable only upon just should act in good faith.
and lawful cause and upon the vote of the partners
representing the controlling interest. REQUISITES FOR APPLICATION OF RULE

APPOINTMENT AS MANAGER AFTER THE 1. Two or more partners have been appointed as
CONSTITUTION OF THE PARTNERSHIP managers;

Appointment may be revoked at any time for any 2. There is no specification of their respective duties;
cause what so ever.
3. There is no stipulation that one of them shall not
Reason: Revocation not founded on a change of will act without the consent of all the others.
on the part of the partners. Appointment is not
UNANIMITY OF ACTION
condition of contract. It is merely a simple contract of
agency, which may be revoking at any time. It is (Art. 1802)
believe that the vote for revocation must also
represent the controlling interest. WHEN UNANIMITY OF ACTION STIPULATED

SCOPE OF THE POWER OF THE MANAGING PARTNER 1. Concurrence necessary for validity of acts

General rule: Partner appointed as manager has all The partners may stipulate that none of the
the powers of a general agent as well as all the managing partners shall act without the consent
incidental powers necessary to carry out the object of of the others. In such a case, the unanimous
the partnership in the transaction of its business. consent of all the managing partners shall be
necessary for the validity of their acts. This
Exception: When powers of manager is specifically consent is so indispensable that neither absence
restricted. A managing partner may not bind the nor disability of any one of them may allege as
partnership by contract foreign to its business. excuse to dispense with requirement.

COMPENSATION FOR SERVICE RENDERED 2. Exception: When there is imminent danger of


grave or irreparable injury to the partnership
***PARTNER GENERALLY NOT ENTITLE TO
then a partner may act alone without consent
COMPENSATION.
of partner who is absent or under disability.
In the absence of an agreement to the contrary, each
CONSENT OF MANAGING PARTNERS NOT
member of the partnership assumes the duty to give
NECESSARY IN ROUTINE TRANSACTIONS
his time, attention, and skill to the management of
its affairs, as may be reasonably necessary to the The requirement of written authority refers
success of the common enterprise; and for this evidently to formal and unusual written contracts.
service a share of the profits is his only
compensation. MANAGEMENT HAS NOT BEEN AGREED UPON

Exceptions: In proper cases, the law may imply a (Art. 1803)


contract for compensation;
RULES WHEN MANNER OF THE MANAGEMENT THAT
TWO MANAGING PARTNERS HAS NOT AGREED UPON

(Art. 1801) 1. All partners considered as managers and


agents
EACH ONE MAY SEPARATELY PERFORM ACTS OF
ADMINISTRATION All partners shall have equal rights in the
management and conduct of partnership affairs. If
1. Respective duties are unspecified there is timely opposition, however, the matter shall
decided by majority vote. In case of tie, the matter
a. If one or more of the managing partners shall be decided by the vote of partners representing
shall oppose the acts of the others, then controlling interest.
the decision of the majority of the
managing partners shall prevail. 2. Unanimous consent required for alteration of
immovable property
The consent need not be express. It may presume absolute can restrained from using info for other
from the fact of knowledge of the alteration without than partnership purpose.
interposing any objection.
ACCESS TO PARTNERSHIP BOOKS
a. Prohibition only applies to immovable
property because of the greater importance Rights can exercise at any reasonable hour. This
of this kind of property, and the alteration means reasonable hours on business days
thereof must be important. This would be an throughout the year and not merely during some
act of strict dominion. arbitrary period of a few days chosen by the
b. If refusal to give consent is manifestly managing partners.
prejudicial to the interest of the partnership,
PARTNERSHIP INFORMATION
court intervention maybe sought. Consent
may presume from silence (lack of opposition (Art. 1806)
despite knowledge).
c. If alteration is necessary for preservation of DUTY TO RENDER INFORMATION
the property, consent of the other partners
There must be no concealment between partners in
not required.
all matters affecting the partnership. Information
SUBPARTNERSHIP must use only for partnership purpose. Not just on
demand but partner also has duty of voluntary
(Art. 1804) disclosure.

CONTRACT OF SUBPARTNERSHIP PARTNER ACCOUNTABLE AS FIDUCIARY

1. Nature (Art. 1807)

A partner may associate another person with him The relation between the partners is essentially
in his share without the consent of other fiduciary involving trust and confidence, each partner
partners. Such associate is called a subpartner. considered in law, as he is, in fact, the confidential
agent of the others. The duties of a partner are
A subpartnership is a partnership within a
analogous to those of a trustee.
partnership that is distinct and separate from the
main or principal partnership. 1. Duty to act for common benefit
2. Duty to account for secret and similar profits
2. Division of profits
3. Duty to account for earnings accruing even
How profits between the members of a after termination of partnership
subpartnership are to be divided is immaterial. 4. Duty to make full disclosure of information
belonging to partnership
RIGHT OF THE PERSON ASSOCIATED WITH THE
PARTNERSHIPS SHARE RIGHTS OF CAPITALIST PARTNERS

Subpartnership agreements do not affect the (Art. 1808)


composition, existence, or operations of the firm. The
The Capitalist partners cannot engage for their own
subpartners are partners inter se, however, in the
account in any operation, which is of the kind of
absence of the mutual assent of all the parties, a
business in which the partnership is engaged, unless
subpartner does not become a member of the
there is a stipulation to the contrary.
partnership, even if the other partners know about
the agreement. Not being a member of the Prohibition relative Capitalist partner is only
partnership, he does not acquire the rights of a prohibited from engaging for his own account in any
partner nor is he liable for its debts. operation which is the same as or similar to the
business in which the partnership is engaged and
PARTNERSHIP BOOKS
which is competitive with said business.
(Art. 1805)
Violation Obligation to bring to common fund any
DUTY TO KEEP PARTNERSHIP BOOKS profits derived and in case of losses, he shall bear
them alone. Partners, however, by stipulation may
The duty to keep true and correct books showing the permit it.
firms accounts, such books being at all times open
to inspection of all members of the firm, primarily REASON FOR PROHIBITION
rests on the managing or active partner.
Fiduciary nature of relationship imposes obligation of
RIGHTS WITH THE RESPECT TO PARTNERSHIP utmost good faith. Rule prevents use of info obtained
BOOKS in course of transaction of partnership business or
because of connection with firm regarding business
Books should kept at the principal place of business secrets and clientele of firm to its prejudice.
as each partner has the right to free access to them
and to inspect or copy any of them at any reasonable
time, even after dissolution. Inspection rights not
RIGHT TO FORMAL ACCOUNT aggregate of the individual contributions made by the
partners in establishing or continuing the
(Art. 1809) partnership.
RIGHT OF THE PARTNER TO A FORMAL ACCOUNT OWNERSHIP OF CERTAIN PROPERTY
General Rule: During existence of partnership, a 1. Property use by the partnership Where
partner is not entitled to a formal account of there is no express agreement that property
partnership affairs. used by a partnership constitutes partnership
property, such use does not make it
Reason: Rights of partner amply protected in Arts.
partnership property, and whether it is so
1805 and 1806. In addition, it would cause much
depends on the intention of the parties, which
inconvenience and unnecessary waste of time.
may be shown by proving an express
Exception: In the special and unusual situations agreement or acts of particular conduct. The
enumerated under art. 1809. Right of partner to intent of the parties is the controlling factor.
demand an accounting without bringing about
dissolution is a necessary corollary to right to share in 2. Property acquired by a partner with
profits. A formal account is a necessary incident to partnership funds Unless a contrary
the dissolution of the partnership. intention appears, property acquired by a
partner in his own name with partnership
SECTION 2. Property Rights of a Partner funds is partnership property.
(Art. 1810)
3. Property carried in partnership books as
EXTENT OF PROPERTY RIGHTS OF A PARTNER partnership asset this fact creates a strong
inference that it is partnership liability.
1. Principal Rights
4. Other factors tending to indicate property
a. Rights in specific partner property; ownership
b. Interest in partnership;
c. Right to participate in management.
PARTNERS RIGHT IN SPECIFIC PARTNERSHIP
2. Related rights
PROPERTY
a. Right to reimbursement for amounts (Art. 1811)
advanced to partnership and to
indemnification for risks inconsequence NATURE OF A PARTNERS RIGHT IN SPECIFIC
of management PARTNERSHIP PROPERTY
b. Right of access and inspection of
Art. 1811 contemplates tangible property but not
partnership books
intangible things. A partner is a co-owner with his
c. Right to true and full information of all
partners of specific partnership property, but the
things affecting partnership
rules on co-ownership do not necessarily apply. The
d. Right to formal account of partnership
legal incidents of this tenancy in partnership are
affairs under certain circumstances
distinctively characteristic of the partnership relation.
e. Right to have partnership dissolved also
They are as follows:
under certain conditions
1. Equal rights of possession Should any of
them use the property for his own benefit, he
PARTNERSHIP PROPERTY AND PARTNERSHIP must account, like a stranger, to the others
CAPITAL DISTINGUISHED for the profits derived there from or the value
of his wrongful possession or occupation. By
1. Changes in value agreement, the right to possess specific
partnership property may surrender. In the
Partnership property is variable its value may vary
absence of special agreement, however,
from day to day with changes in market value while
neither partner separately owns, or has the
partnership capital is constant it remains
exclusive right of possession of any
unchanged as the amount is fix by agreement of the
partnership property or any proportional part
partners, and is not affected by fluctuations in the
thereof. Each has dominion over the entire
value of the partnership property.
partnership property.
2. Assets Included
2. Right not assignable
Partnership property includes not only the original
capital contributions, but also all property Reasons for non-assignability:
subsequently acquired because of the partnership or
a. It prevents interference by outsiders in
with partnership funds, including partnership name
partnership affairs;
and goodwill while partnership capital represents the
b. It protects the right of other partners and partnership to any of his co-partners or to a third
partnership creditors to have partnership person.
assets applied to firm debts;
c. It is often impossible to determine the extent 1. Rights withheld from assignee
of a partners beneficial interest in a a. To interfere in the management.
particular partnership asset. b. To require any information or account.
c. To inspect any of the partnership books.
3. Specific partnership property is not subject to
attachment, execution, garnishment, or 2. Status and rights of assignor in partnership
injunction, without the consent of all the unaffected
partners except on a claim against the
RIGHTS OF ASSIGNEE OF PARTNERS INTEREST
partnership. For the same reason that the
property belongs to the partnership, the 1. To receive in accordance with his contract the
partners cannot claim any right under the profits accruing to the assigning partner;
homestead or exemption laws when it is
attached for partnership debts. However, a 2. To avail himself of the usual remedies provided by
judgment creditor may levy upon a partners law in the event of fraud in the management;
interest in the partnership itself because it is
3. To receive the assignors interest in case of
actually his property, by means of a charging
dissolution;
order.
4. To require an account of partnership affairs, but
4. The right of the partners to specific only in case the partnership is dissolved, and such
partnership property is not subject to legal account shall cover the period from the date only of
support since the property belongs to the the last account agreed to by all partners. The
partnership and not to the partners. However, purchaser of a partners interest may apply to the
their interest in the partnership is. court for dissolution after the termination of the
specified term or undertaking or at any time if the
5. Right limited to share of what remains after partnership is one at will.
partnership debts has been paid
DISSOLUTION OF THE PARTNERSHIP
No particular partnership property or any specific
or an aliquot part thereof can be considered the 1. Dissolution of partnership not intended
separate or individual property of any partner. The Many partnership agreements are made
whole of partnership property belongs to the merely as security for loans, the assigning
partnership considered as a juridical person, and a partner never intending to destroy the
partner has no interest in it but his share of what partnership relation. If the assigning partner
remains after all partnership debts are paid. neglects his duties after assignment, the
other partners may dissolve the partnership.
PARTNERS INTEREST IN THE PARTNERSHIP
2. Dissolution of partnership intended A
(Art. 1812)
partners conveyance of his interest in the
1. Share of profits and surplus The partners partnership operates as dissolution of the
interest in the partnership consists of his partnership only when it is clear that the
share in the undistributed profits during the parties contemplated and intended the entire
life of the partnership as a going concern and withdrawal from the partnership of such
his share in the undistributed surplus after its partner and the termination of the
dissolution. partnership as between the partners.
A. Profits: the excess of returns over
expenditure in a transaction or series of
transactions; or the net income of the REMEDIES OF SEPARATE JUDGMENT CREDITOR OF A
partnership for a given period. PARTNER
B. Surplus: It is the excess of assets over
liabilities. If the liabilities are more than (Art. 1814)
the assets, the difference represents the
1. Application for a charging order after
extent of the loss.
securing judgment on his credit a partner
ASSIGNMENT OF PARTNERS INTEREST can secure a judgment on his credit and then
apply to the proper court for a charging
(Art.1813) order, subjecting the interest of the debtor
partner in the partnership with the payment
EFFECT OF ASSIGNMENT OF PARTNERS WHOLE
of the unsatisfied amount of such judgment
INTEREST IN PARTNERSHIP
with interest thereon with the least
A partners right in specific partnership property is interference with the partnership business
not assignable but he may assign his interest in the and the rights of the other partners.
2. Preferred rights of partnership creditors the Under the Business Name Law (Sec. 1, Act No. 3883)
claims of partnership creditors must be such firm name must be registered with the Bureau
satisfied first before the separate creditors of of Commerce.
the partners can be paid out of the interest
charged. RIGHT OF THE PARTNERS TO CHOOSE FIRM NAME

The firm name of a partnership may be that of an


3. Availability of other remedies Art. 1814
individual partner, the surname of all the partners, or
have made this an exclusive remedy so that a
the surname of one or the surnames of more of the
writ of execution will not be proper. However,
members with the addition of and Company.
if the judgment debt remains unsatisfied, the
court may resort to other courses of action 1. Use of misleading name The partners
notwithstanding the issuance of the charging cannot use a name that is identical or
order. deceptively confusingly similar to that of any
existing partnership or corporation or to any
REDEMPTION OR PURCHASE OF INTEREST
other name already protected by law or is
CHARGED
patently deceptive.
1. Redemptioner The interest of the debtor- 2. Use of names of deceased persons the
partner so charged may be redeemed or Supreme Court has ruled that a partnership
purchased with the separate property of any cannot continue to use its firm name the
one or more of the partners, or with names of deceased
partnership property but with the consent of The above ruling is considered abandoned in
all the partners whose interests are not so view of Rule 302 of the Code of Professional
charged or sold. Responsibilities which states that the
2. Redemption Price The value of the continued use of the name of a deceased
partners interest in the partnership has no partner is permissible provided that the firm
bearing on the redemption price which is indicates in all its communications that said
likely to be lower since it will be dependent partner is deceased.
on the amount of the unsatisfied judgment
LIABILITY INCLUSION OF NAME IN THE FIRM NAME
debt.
3. Right of redeeming non-debtor partner Persons who, not being partners, include their names
There deeming non-debtor partner does not in the firm name do not acquire the rights of a
acquire absolute ownership over the debtor- partner but shall be subject to the liability of a
partners interest but holds it in trust for him partner insofar as 3rd Persons without notice are
consistent with principles of fiduciary concerned. Such persons become partners by
relationship. estoppel.

RIGHTS OF PARTNER UNDER EXEMPTION LAWS LIABILITIES OF PARTNERS

With respect to the partners interest in the (Art. 1816)


partnership as distinguished from his interest in
specific partnership property, the partner may avail LIABILITY FOR CONTRACTUAL OBLIGATIONS OF THE
himself of the exemption laws after partnership PARTNERSHIP
debts have been paid. A partners interest or share in
1. Partnership Liability A partner has the right
the partnership property is really his property.
to make all partners liable for contracts he
SECTION 3. Obligations of the Partners with Regard makes for the partnership in the name and
to Third Persons for the account of the partnership.
2. Individual Liability A partner may assume a
REQUIREMENT OF A FIRM NAME separate undertaking under his name with a
third party to perform a partnership contract
(Art. 1815)
or make himself solidarily liable on a
MEANING OF WORD FIRM partnership contract.

Firm is defined as the name, title, or style under NATURE OF INDIVIDUAL LIABILITY OF PARTNERS
which a company transacts business; a partnership
1. Pro rata Literally, pro rata liability means
of two or more persons; a commercial house. The
proportionate distribution of liability. In the
term is also used as synonymous with company.
law of obligations, the concurrence of two or
IMPORTANCE OF HAVING A FIRM NAME more debtors in one and the same obligation
makes it prima facie a joint (pro rata)
A partnership must have a firm name under which it obligation, and the debts is presumed divided
will operate. A firm name is necessary to distinguish into as many equal shares as there are
the partnership, which has a distinct and separate debtors and each one of them is bound to
juridical personality from the individuals composing pay only his share.
the partnership and from other partnerships and
entities.
2. Subsidiary or secondary the partners The particular partner who undertakes to bind his co-
become personally liable only after all partners by a contract without authority is himself
partnership assets have been exhausted. personally liable on such contract.
3. Liability of industrial partner Even the
industrial partner who is not liable for losses REAL PROPERTY OF PARTNERSHIP
would have to pay but of course, he can
(Art. 1819)
recover the amount he has paid from the
capitalist partners unless there is an CONVEYANCE OF REAL PROPERTY BELONGING TO
agreement to the contrary. PARTNERSHIP

DISTINCTION BETWEEN A LIABILITY AND A LOSS 1. Prima facie ownership of real property The
ownership of real estate is prima facie that is
The inability of a partnership to pay a debt to a third
indicated by the certificate of title.
party at a particular time does not necessarily mean
that the partnership business has been operated at a
2. Legal effects of conveyance The real
loss.
property may be registered or owned in the
STIPULATION AGAINST LIABILITY name of (a) the partnership, (b) one or more
but not all the partners, (c) one or more or all
(Art. 1817) the partners, or in a third person in trust for
the partnership; or (d) all the partners.
A stipulation among the partners contrary to the pro
rata and subsidiary liability expressly imposed by
Article 1816 is void and is only valid and enforceable PROTECTION OF INNOCENT PURCHASERS FOR
as among partners. VALUE

POWERS OF A PARTNER 1. Legal title to partnership property in partner


making the conveyance When the legal title
(Art. 1818) is in the partner making the conveyance, a
purchaser without notice may acquire a valid
1. As among themselves When a partner
title.
performs an act within the scope of his
2. Legal title of property in partnership name,
actual, implied, or apparent authority, he is
conveyed in partnership name a
not only a principal as to himself, but is also
conveyance by a partner of partnership
an agent as to his co-partners or to the
property in the partnership name even
partnership.
though without authority cannot be recovered
2. As to third persons The relation of partners
by the partnership where it has been
to third persons is thus founded on the
conveyed by the grantee to a holder for value.
doctrine of mutual agency.
3. Authorization or ratification of conveyance
a. No duty to make inquiries as to acting
A conveyance by one partner may be
partners authority.
authorized by his co-partners or when made
b. Presumption that acting partner has
without authority may be ratified by them.
authority to bind partnership.
c. No right to assume that acting partner ADMISSION BY PARTNER
has unlimited authority.
(Art. 1820)
LIABILITY OF A PARTNERSHIP FOR ACTS OF
PARTNERS General rule: A person is not bound by the act,
admission, statement or agreement of another of
***Acts of a partner which he has no knowledge or to which he has not
given his consent except by virtue of a particular
1. Acts for apparently carrying on in the usual
relation between them.
way the business of the partnership
Two requisites In order that the partnership 1. Admissions by a party as testified to by a
will not be liable: third person are admissible in evidence
a. The partner so acting has, in fact, no against him in litigation.
authority; and 2. Admissions by another are received against a
b. The third person knows that the acting party if the former is acting in the capacity of
partner has no authority. agent of the latter.
3. When a partner makes admissions for
2. Acts of strict dominion or ownership himself only without purporting to act for the
3. Acts in contravention of a restriction on partnership he alone shall be chargeable with
authority The partnership is not liable to his admissions.
third persons having actual or presumptive 4. After dissolution, admission made by a
knowledge of the restrictions, whether or not partner will bind the partnership only if
the acts are apparently for carrying on in the necessary to wind up partnership affairs.
usual way the business of the partnership.

LIABILITY OF PARTNER ACTING WITHOUT AUTHORITY


NECESSITY OF PROVING EXISTENCE OF A partners even if the act is not connected with
PARTNERSHIP the business.

1. Evidence other than the admission itself MISAPPLICATION OF MONEY OR PROPERTY OF A


Before the partnership can be charged with THIRD PERSON
the admission of a partner the partnership
relation must be shown and proof of that fact The partnership is liable for the conversion
must be made by evidence other than the (misappropriation) of money or property entrusted to
admission itself. the partnership by a third person. The effect under
2. Declaration made by partner acting for the Article 1824 is the same whether by the partnership
partnership An admission made by a and subsequently misappropriated by a partner.
partner who was no longer a partner at the
PARTNERSHIP BY ESTOPPEL
time of declaration is not admissible in
evidence against the partnership. (Art. 1825)
3. Declaration made in the presence of a
partner It is admissible to prove the 1. Meaning and effect of estoppel Estoppel is
existence of a partnership. a bar which precludes a person from denying
or asserting anything contrary to that which
NOTICE TO, OR KNOWLEDGE OF A PARTNER has been established as the truth by his own
AFFECTING PARTNERSHIP AFFAIRS deed or representation, either express or
implied.
(Art. 1821)
2. When person a partner by estoppel He may
Notice to partner is notice to partnership. If notice is be held liable to third persons as if he was a
delivered to a partner, that is an effective partner, when by words or conduct he:
communication to the partnership. a. Directly represents himself to anyone as a
partner in an existing or a non-existing
THREE CASES OF KNOWLEDGE partnership.
b. Indirectly represents himself by
1. Knowledge of a partner acting in the consenting to another representing him
particular matter acquired while a partner; as partner in a existing or non-existing
2. Knowledge of a partner acting in the partnership.
particular matter then present to his mind; 3. When partnership liability results The
and person becomes an agent of the partnership
3. Knowledge of any other partner who and his act or obligation that of the
reasonably could and should have partnership.
communicated it to the acting partner. 4. When liability pro rata When there is no
existing partnership and all those represented
LIABILITIES
as partners consented to the representation,
(Arts. 1822, 1823, 1824) or not all of the partners of the existing
partnership consented to the representation.
LIABILITY ARISING FROM PARTNERS WRONGFUL 5. When liability separate - When there is no
ACT OR OMISSION, OR BREACH OF TRUST existing partnership and not all but only some
of those represented as partners consented
1. Solidary liability Whether innocent or guilty,
to the representation, or none of the partners
all the partners are solidarily liable by the
of the existing partnership consented to the
partnership itself. It may be stated that the
representation.
liability of a partner for a debt of the
6. Estoppel does not create partnership Actual
partnership depends upon whether the debts
partnership is one thing and liability of the
is contractual or it arises from tort or
partners is another and different thing.
conversion. If it arises from contract, the
liability is subsidiary and pro rata; if it arises LIABILITY OF INCOMING PARTNER
from tort or conversion, the liability is
solidary. (Art. 1826)
2. Different from liability under Art. 1816 It
LIABILITY OF INCOMING PARTNER FOR EXISTING
covers the civil liability of the partnership
OBLIGATIONS
arising from the wrongful acts or omissions of
any partner. The act or omission is called 1. Limited to his share in partnership liability a
quasi-delict or tort when it does not constitute newly admitted partner is liable for
a crime or felony punishable by law. obligations of the partnership at the time of
his admission. The obligation of the incoming
REQUISITES FOR LIABILITY
partner shall be satisfied only out of
1. The partner must be guilty of a wrongful act partnership property.
or omission; and 2. Extends to his separate property for
2. He must be acting in the ordinary course of subsequent obligations
business or with the authority of of his co-
RIGHTS OF EXISTING AND SUBSEQUENT CREDITORS (4) loss of a specific thing which a partner had
promised to contribute to the partnership;
They have equal rights as against partnership
property and separate property of the previously (5) the death of a partner; (6) the insolvency of any
existing members of the partnership while only partner or of the partnership itself; (7) civil
subsequent creditors have rights against the interdiction of any partner; and lastly (8) by judicial
separate estate of the newly admitted partner. decree.

INCOMING PARTNER ASSUMED OBLIGATION OF PARTNERSHIP CEASED UPON EXPIRATION OF TERM;


RETIRING PARTNER NO MORE JURIDICAL PERSONALITY

The incoming partner is liable directly to the old A partnership having ceased to exist since 1959, the
partnership creditors such that the latter has the partnership is no more a juridical personality nor
right of action against the incoming partner, if the have the capacity to sue and be sued.
assumption was made primarily to benefit the firm
creditors. EFFECT OF WITHDRAWAL BEFORE EXPIRATION OF
THE TERM
REASON FOR RULE MAKING NEW PARTNER LIABLE
Even if there is a specified term, one partners cause
This is not a harsh rule because the incoming partner its dissolution by expressly withdrawing even before
partakes of the benefit of the partnership property, the expiration of the period, with or without justifiable
and an established business. He has every means of cause. Of course, if the cause is not justified or no
obtaining full knowledge of protecting himself, cause was given, the withdrawing partner is liable for
because he may insist on the liquidation or damages but in no case can he be compelled to
settlement of existing partnership debts. remain in the firm. With his withdrawal, the number
of members is decreased, hence, the dissolution. And
PREFERENCE OF PARTNERSHIP CREDITORS in whatever way we view the situation, the conclusion
is inevitable that the partners were to be guided in
(Art. 1827)
the liquidation of the partnership by the provisions of
With respect to partnership assets, the partnership its duly registered articles of partnership
creditors are entitled to priority of payment.
WHO MAY PETITION FOR DISSOLUTION
REMEDY OF PRIVATE CREDITORS OF A PARTNER
(Art. 1831)
Without prejudice to the right to preference of
Dissolution of a partnership may be decreed by the
partnership creditors, the creditors of each partner
court on application either (1) by a partner or, in case
may ask for the attachment and public sale of the
he has assigned his interest, (2) by his assignee.
share of the latter in the partnerships assets.
EFFECT OF DISSOLUTION TO PARTNERS AUTHORITY
CHAPTER 3 DISSOLUTION OR WINDING UP
(Art. 1832)
(Arts. 1828 and 1829)
General Rule: If the cause of dissolution is not by act,
DISSOLUTION, WINDING UP, AND TERMINATION
death, or insolvency of a partner, the authority
EXPLAINED
ceases immediately.
Dissolution, winding up, and termination should not
Exception: For the purposes of winding-up
be confused because they are distinct terms in law.
partnership affairs.
Dissolution designates the point in time when the
partners cease to carry on the business together: LIABILITY OF PARTNERS AFTER DISSOLUTION
termination is the point in time when all partnership
affairs are wound up; winding up is the process of (Art. 1833)
settling partnership affairs after dissolution.
General Rule: If the cause of dissolution is the death,
CAUSES OF PARTNERSHIP DISSOLUTION act, or insolvency of a partner, authority of a partner
to bind ceases upon the knowledge of the
(Art. 1830) dissolution.
CAUSES OF DISSOLUTION IN GENERAL If dissolution is caused by act of one of parties, co-
partners are also liable to contribute towards a
Generally, a partnership may be dissolved by causes:
liability as if no dissolution has happened, provided
(1) without violation of the agreement between the that there is no notice or the partner does not have
partners; or knowledge of the dissolution.

(2) in contravention of the agreement. Other specific


causes are;

(3) an event which makes the business of the


partnership unlawful;
PARTNERS CANNOT BIND PARTNERSHIP AFTER a. All partners may have the property sold
DISSOLUTION for payment of partnership liabilities.
b. If there is surplus, after paying the
(Art. 1834) liabilities of the firm, it shall be given in
cash to the partners.
General Rule: Dissolution terminates the authority of
the partners to bind partnership.
2. If the partnership was dissolved in
Exceptions: Any act appropriate for winding-up contravention of the agreement
partnership affairs or completing transactions a. The remaining partners have the right to
unfinished at dissolution sell partnership property to pay the
partnerships liabilities and the surplus is
IF THIRD PERSONS THAT TRANSACTED HAD NO distributed to the remaining partners as
ACTUAL KNOWLEDGE OF THE DISSOLUTION well.
b. As against the guilty partner for the
Persons extending credit prior to dissolution are
dissolution of the partnership, the
entitled to notice of dissolution. If they had no notice
remaining partners have the right to
or knowledge of dissolution, they may hold the
recover damages for breach.
retired partner for obligations made by continuing
c. The remaining partners may also
partners after dissolution.
continue the business up to end of the
EFFECT OF DISSOLUTION TO LIABILITIES OF stipulated term of the partnership.
PARTNERS
RIGHT OF PARTNER TO RESCIND CONTRACT OF
(Art. 1835) PARTNERSHIP

General Rule: Dissolution of a partnership does not (Art. 1838)


itself discharge the existing liability of any partner.
If one is induced by fraud or misrepresentation to
Exception: A partner can be discharged from any become a partner, the contract is voidable. If the
existing liability upon dissolution of the partnership contract is annulled, the injured party is entitled to
provided that there is an agreement between the restitution. Here, the fraud or misrepresentation
partnership creditor and the person or partners vitiates consent. However, until the partnership
continuing the business. contract is annulled by a proper action in court, the
partnership relations exist and the defrauded partner
***Individual properties of the deceased partner is liable for all obligations to third persons.
shall be liable to all obligations of the partnership
made while he was a partner. 1. Right of injured partner where partnership
contract rescinded
PERSON RESPONSIBLE FOR WINDING UP OF 2. Right of retention of partnership property
PARTNERSHIP AFFAIRS 3. Right to be subrogated in place of creditors of
partnership
(Art. 1836)
4. Right to be indemnified by the guilty partner
Who may wind up Partnership Affairs? Partner against all liabilities of the partnership.
designated in the agreement.
RULES ON DISTRIBUTION
In absence of agreement, the part that did no
(Art. 1839)
wrongfully dissolved the partnership.
RULES FOR SETTLING ACCOUNTS BETWEEN THE
If all partners died, the legal representative of the
PARTNERS
last surviving partner provided that the partner is not
insolvent. 1. The assets of the partnership
2. Liabilities of the partnership
Winding up of a dissolved partnership may be done:
3. Application of assets
A. Extra-judicially by the partners themselves. 4. Contribution by the partners
B. Judicially under the control of a competent
ASSETS OF THE PARTNERSHIP
court.
1. Partnership property
***Managing partner or winding-up partner has the
2. The contributions of the partners necessary
right to sell firm property even after the life of the
for the payment of all liabilities
partnership has expired.
ORDER OF APPLICATION OF THE ASSETS
RIGHTS OF PARTNERS UPON DISSOLUTION
1. Those owing to partnership creditors
(Art. 1837)
2. Those owing to partners other than for capital
1. If partnership is dissolved without violation of and profits such as loans given by the
the agreement partners or advances for business expenses
3. Those owing for the return of the capital
contributed by the partners
4. The share of the profits, if any, due to each TO WHOM RIGHT TO DEMAND AN ACCOUNTING OF
partner PARTNERSHIP AFFAIRS MUST BE DIRECTED
AGAINST
ORDER OF APPLICATION OF PARTNER WHO BECOME
INSOLVENT OR HIS ESTATE HIS INSOLVENT, THE (Art. 1842)
CLAIMS AGAINST HIS SEPARATE PROPERTY
1. Winding-up partners
1. Those owing to separate creditors 2. Surviving partners
2. Those owing to partnership creditors 3. The person in the partnership continuing the
3. Those owing to partners by way of business
contribution

LIABILITY OF DECEASED PARTNERS INDIVIDUAL


PROPERTY

The individual property of a deceased partner shall


be liable for his share of the contributions necessary
to satisfy the liabilities of the partnership incurred
while he was a partner.

EXTENSION OF CREDITORS RIGHTS

(Art. 1840)

CAUSES OF DISSOLUTION OF A PARTNERSHIP BY


CHANGE OF MEMBERS

1. New partner is admitted


2. Partner retires
3. Partner dies
4. Partner withdraws
5. Partner is expelled from partnership
6. Other partners assign their rights to sole
remaining partner
7. All the partners assign their rights in
partnership property to third persons.

***Any change in membership dissolves a


partnership and creates a new one

***When a business of a dissolved partnership is


continued by former or without new partners, the old
creditors are creditors of the person or partnership
that is continuing the business.

RIGHTS ON PROPERTIES OF DECEASED PARTNER

(Art. 1841)

RIGHTS OF RETIRING OF PROPERTIES OF DECEASED


PARTNER WHEN BUSINESS CONTINUED

To have the value of the interest of the retiring


partner or deceased partner in the partnership
determined as of the date of dissolution.

To receive thereafter, as an ordinary creditor, an


amount equal to the value of his share in the
dissolved partnership with interest, or, at his option,
in place of interest, the profits attributable to the use
of his right.

General Rule: When partner retires from the


partnership, he is entitled to the payment of what
may be due to him after liquidation.

Exception: No liquidation needed when there is


settlement as to what retiring partner shall receive.

Das könnte Ihnen auch gefallen