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302, Malcolm Hall Email: prof.casis@gmail.com Consultation hours: MTTHF 9am -12nn, 3-5pm, or by appointment Law 173: AGENCY AND PARTNERSHIP Course Syllabus Course Description: The law of agency and partnership based on the Civil Code and relevant special laws. Pre-requisite: Law 101: Obligations and Contracts Course Requirements: Agency Exam Partnership Exam Recitation Attendance MCQs 1 = 96 100 1.25 = 91 95 1.5 = 86 90 1.75 = 81 85 References: 3 American Jurisprudence 2d Agency (1987) and (2011) De Leon and De Leon Jr., Comments and Cases on Partnership, Agency and Trusts (2010) Restatement (Third) of Agency (2006)
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3 = 56 60 4 = 51 55 5 = 50 & below
AGENCY OUTLINE - Week 1 Nov 14-17 I. A. 1. Purpose and Definition Purpose THE CONCEPT OF AGENCY
[Lecture] Eurotech v. Cuison G.R. No. 167552. April 23, 2007.1 2. Definition
Restatement (Third) of Agency 1.01 (2006) 3 Am. Jur. 2d Agency 1 (2011) Rallos v. Felix Go Chan, G.R. No. L-24332. January 31, 1978 Severino v. Severino G.R. No. 180058. January 16, 1923. b. Contract
Article 1868 cf. Article 1709 old Civil Code Article 1305, 1318 B. Elements of Agency
Article 1868 Rallos v. Felix Go Chan, G.R. No. L-24332. January 31, 1978 cf. Article 1868, 1881, 1869, 1870 Orient Air Service v. CA G.R. No. 76931 May 29, 1991 Bordador v. Luz G.R. No. 130148, December 15, 1997 Apex Mining Co., Inc. v. Southeast Mindanao G.R. Nos. 152613 & 152628 June 23, 2006 De La Cruz v. Northern Theatrical G.R. No. L-7089, August 31, 1954
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Tuazon v. Heirs of Ramos, G.R. No. 156262 , July 14, 2005 Victorias Milling v. CA G.R. No. 117356, June 19 2000 C. 1. Effect of Agency: Integration and Extension Authority to Act
Eurotech v. Cuison G.R. No. 167552. April 23, 2007 Doles v. Angeles G.R. No. 149353 June 26, 2006 2. Agent Not Real Party-in-Interest
Uy and Roxas v. CA, G.R. No. 120465, September 9, 1999 Angeles v. PNR, G.R. No. 150128, August 31, 2006 Ong v. CA, G.R. No. 119858, August 31, 2006. PNB v. Ritratto, G.R. No. 142616. July 31, 2001 3. Notice to Agent is Notice to Principal
Francisco v. GSIS G.R. No. L-18287 Sunace International v. NLRC G.R. No. 161757 January 25, 2006 Cosmic Lumber v. CA G.R. No. 114311 November 29, 1996 New Life Enterprises v. CA G.R. No. 94081 March 31 1992 4. Bad Faith of the Agent is Bad Faith of the Principal
Caram v. Laureta, G.R. No. L-28740, February 24, 1981 5. Extinguished by Death
Rallos v. Felix Go Chan, G.R. No. L-24332. January 31, 1978 D. 1. a. Nature of Agency: General and Special Distinguishing General Agency and Agency Couched in General Terms As to Scope: General Agency
Article 1876 Dominion Insurance v. CA G.R. No. 129919, February 6, 2002 b. As to Authority: Agency Couched in General Terms
Article 1877
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Distinguishing Special Agency and Agency Couched in Specific Terms - Week 2 Nov. 21- 24 -
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Article 1878 Veloso v. CA G.R. No. 102737. August 21, 1996 Lim Pin v. Liao Tan, G.R. No. L-47740, July 20, 1982 ii. Effect of Absence of Specific Authorization
Dugo v. Lopena G.R. No. L-18377 December 29, 1962 Vicente v. Geraldez G.R. No. L-32473 July 31, 1973 Cosmic Lumber v. CA G.R. No. 114311 November 29, 1996 Mercado v. Allied Banking Corporation G.R. No. 171460. July 27, 2007 iii. Effect of Specific Authorization
BPI v. De Coster G.R. No. 23181 March 16, 1925 PNB v. Sta Maria G.R. No. L-24765 August 29, 1969 Insular Drug v. PNB G.R. No. 38816 November 3, 1933 Hodges v. Salas G.R. No. L-42958 October 21 1936 Veloso v. CA G.R. No. 102737. August 21, 1996 Bravo-Guerrero v. Bravo G.R. 152658 July 29, 2005. 3. Clarifying the Terms
Siasat v. IAC G.R. No. L-67889 October 10, 1985 II. A. Oral or Written ESTABLISHING AGENCY
Article 1869
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1.
Oral
Cosmic Lumber V. CA G.R. No. 114311 November 29, 1996. De Leon v. De Leon Jr, p. 389 Rodriguez v. CA G.R. No. L-29264 August 29, 1969 Oesmer v. Paraiso Development G.R. No. 157493 February 5, 2007. b. Effect
AF Realty v. Dieselman G.R. No. 111448 January 16, 2002 Pahud v. CA G.R. No. 150346 August 25, 2006 - Week 3 Nov. 28 - Dec. 1c. Form in Case of Corporations
AF Realty v. Dieselman G.R. No. 111448 January 16, 2002 Litonjua v. Eternit G.R. No. 144805 June 8 2006 C. Express/Implied Agency and Agency by Estoppel
Article 1869 1. 2. a. Express Agency Implied Agency Implied from Acts of the Principal
Article 1869 Uniland Resources v. DBP G.R. No. 95909 August 16, 1991 b. Implied from Acts of the Agent
3. a.
Pahud v. CA G.R. No. 160346 August 25, 2009 Litonjua v. Eternit G.R. No. 144805 June 8 2006 Nogales v. Capitol Medical G.R. No. 142625 December 19, 2006 4. Distinguishing Implied Agency and Agency by Estoppel
Naguiat v. CA and Queao G.R. No. 118375 October 3, 2003 Woodchild v. Roxas G.R. No. 140667 August 12, 2004 Yun Kwan Byung v. PAGCOR G.R. No. 163553 December 11, 2009 Professional Service v. Agana G.R. No. 126297. January 31, 2007, G.R. No. 126297. February 11, 2008, and G.R. No. 126297. February 2, 2010 III. A. 1. The Rights of Agents Compensation THE AGENT
Danon v. Brimo & Co G.R. No. 15823 September 12, 1921 Hahn v. CA G.R. No. 113074 January 22, 1997 Tan v. Gullas G.R. No. 143978. December 3, 2002 Philippine Health-Care Providers v. Estrada G.R. No. 171052. January 28, 2008 Sanchez v. Medicard G.R. No. 141525 September 2, 2005 Infante v. Cunanan G.R. No. L-5180 August 31, 1953 Lim v. Saban G.R. No. 163720 December 15, 2004 - Week 4 Dec. 5-8 b. Prats Doctrine and Manotok Test
Prats v. CA G.R. No. L-39822 January 31, 1978 Manotok Brothers v. CA G.R. No. 94753 April 7, 1993 Uniland Resources v. DBP G.R. No. 95909 August 16, 1991 c. Forfeiture of Right
Domingo v. Domingo G.R. No. L-30573 October 29, 1971 2. Lend to/Borrow Money from the Agency
Baltazar v. Ombudsman G.R. No. 136433 December 6, 2006 3 Am. Jur. 2d Agency 7 (2011) Serona v. People, G.R. No. 130423. November 18, 2002 4. Retain in Pledge Objects of the Agency
Article 1912-1914 B. 1. a. The Obligations of Agents Act within the scope of authority In general
Article 1881-1882 Woodchild v. Roxas G.R. No. 140667 August 12, 2004 Guinhawa v. People, G.R. No. 162822. August 25, 2005 b. As Regards Third Persons
Board of Liquidators v. Heirs of Maximo Kalaw G.R. No. L-18805 August 14, 1967
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San Juan v. Court of Appeals G.R. No. 129549 September 19, 1998 AF Realty v. Dieselman G.R. No. 111448 January 16, 2002 Francisco v. GSIS G.R. No. L-18287 March 30, 1963 2. Act in Accordance with Instructions
Article 1884 British Airways v. Court of Appeals, G.R. No. 121824. January 29, 1998 - Week 5 Dec. 12 -15 4. Advance Funds Article 1886 5. a. Prefer Interest of the Principal Over Personal Interest In general
Article 1491 (2) Severino v. Severino G.R. No. 18058 January 16, 1923 Araneta, Inc. v. De Paterno G.R. No. L-2886 August 22, 1952 c. Double Sales
Article 1891 Domingo v. Domingo G.R. No. L-30673 October 29, 1971 Murao v. People, G.R. No. 141485. June 30, 2005. 7. Pay interest
Article 1896
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Article 1909 Metrobank v. CA G.R. No. 88866, February 18, 1991. C. 1. The Liability of Agents When Solidary
Articles 1897-1898 Eurotech v. Cuison G.R. No. 167552 April 23, 2007 DBP v. CA G.R. No. 109937, March 21, 1994 b. Act in Own Name
Article 1883 Beaumont v. Prieto G.R. No. 8988 March 30, 1916 c. Special Obligations of Commission Agents
Articles 1903-1908 IV. A. 1. Obligations of the Principal Comply with Obligations THE PRINCIPAL
Articles 1901, 1910 Filipinas Life v. Pedroso G.R. 159489, February 4, 2008
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Manila Memorial v. Linsangan G.R. No. 151319 November 22, 2004 Board of Liquidators v. Heirs of Maximo Kalaw G.R. No. L-18805 August 14, 1967 Francisco v. GSIS G.R. No. L-18287 March 30, 1963 Woodchild v. Roxas G.R. No. 140667 August 12, 2004 c. When estopped
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Article 1911 Rural Bank of Milaor v. Ocfemia, G.R. No. 137686, February 8, 2000 Cuison v. CA, G.R. No. 88539. October 26, 1993 2. Advance/Reimburse
Articles 1911, 1915 De Castro v. CA G.R. No. 115838 July 18, 2002 2. Contract Involves Things Belonging to Principal
Article 1883 Syjuco v. Syjuco G.R. No. 13471 January 12, 1920 PNB v. Agudelo G.R. No. 39037 October 30, 1933 V. A. THE THIRD PARTY DEALING WITH THE AGENT
Article 1902
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Keeler Electric v. Rodriguez G.R. No. 19001 November 11, 1922 b. Later Jurisprudence
BA Finance v. CA G.R. No. 94566, July 3, 1992 NPC v. National Merchandising G.R. Nos. L-33819 & L- 33897 October 23, 1982 Apex Mining v. Southeast Mindanao G.R. Nos. 152613 & 152628, June 23, 2006 Bacaltos Coal Mines v. CA G.R. No. 114091 June 29, 1995 VI. Article 1919 A. 1. Revocation In General EXTINGUISHING THE AGENCY
Articles 1920, 1925 Barreto v. Santa Marina G.R. 8169 December 29, 1913 2. a. When Not Binding on Third Persons When Notice is Required
Articles 1921, 1873 Lustan v. CA, G.R. No. 111924. January 27, 1997 b. Third Person in Good Faith Without Knowledge of Revocation
Article 1924 CMS Logging v. CA G.R. No. 41420 July 10, 1992
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Sanchez v. Medicard G.R. No. 141525 September 2, 2005 5. Special Revokes General in Part
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Article 1927 Del Rosario v. Abad G.R. No. L-10881 September 30, 1958 Coleongco v. Claparols G.R. No. L-18616 March 31, 1964 Lim v. Saban G.R. No. 163720 December 16, 2004 Valenzuela v. CA, G.R. No. 83122. October 19, 1990 B. Withdrawal
Article 1928 Valera v. Velasco G.R. No. 28050 March 13, 1928 C. Death/Civil Interdiction/Insanity/Insolvency of the Principal
Article 1919 Rallos v. Felix Go Chan G.R. No. L-24332 January 31, 1978 1. 2. Agency Coupled with an Interest Contract between Agent without Knowledge and Third Person in Good Faith
Article 1931 Rallos v. Felix Go Chan G.R. No. L-24332 January 31, 1978 VII. DISTINGUISHING AGENCY FROM OTHER CONTRACTS A. 1. In General Determined by Acts
Doles v. Angeles G.R. No. 149353 G.R. No. 149353 June 26, 2006 2. The Element of Control
Victorias Milling v. CA G.R. No. 117356 June 19, 2000 Sevilla v. CA G.R. Nos. L-41182-3 April 15, 1988 B. Distinguished from Partnership
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Article 1767 Sevilla v. CA G.R. Nos. L-41182-3 April 15, 1988 Litonjua v. Litonjua G.R. Nos. 166299-300 December 13, 2005 C. 1. Distinguished from Service Providers Lessor of Services
Article 1644 Nielson v. Lepanto G.R. No. L-21601 December 28, 1968 2. Independent Contractor
Article 1713 Fressel v. Mariano Uy Chaco G.R. No. 10918 March 4, 1916 Shell v. Firemens Insurance G.R. No. L-8169 January 29, 1957 D. Distinguished from Sale
Article 1458 Quiroga v. Parsons Hardware G.R. No. 11491 August 23, 1918 American Rubber v. CIR G.R. No. L-25965 June 30, 1975 Ker v. Lingad G.R. No. L-20871 April 30, 1971 Gonzalo Puyat v. Arco Amusement G.R. No. 47538 June 20, 1941 Chua Ngo v. Universal Trading G.R. No. L-2870 September 19, 1950 E. Distinguished from Brokerage
Hahn v. CA G.R. No. 114074 January 22, 1997. PARTNERSHIP OUTLINE References: Esteban B. Bautista, Treatise on Philippine Partnership Law 1 (1995) De Leon & De Leon, Jr. Comments and Cases on Partnership, Agency and Trusts (2010)
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I. A.
Historical Background
Article 1767 Bautista p. 3 Litonjua v. Litonjua G.R. Nos. 166299-300 December 13, 2005 2. Elements
Article 1767 Evangelista v. CIR; AFISCO v. CA G.R. No. 112675, January 25, 1999 a. Common fund
Lim Tong Lim v. Philippine Fishing Gear, G.R. No. 136448 November 3, 1999 AFISCO v. CA G.R. No. 112675, January 25, 1999 b. Profits
AFISCO v. CA G.R. No. 112675, January 25, 1999 Gatchalian v. CIR G.R. No. 45425 April 29, 1939 c. i. Characteristics Lawful Purpose and Common Benefit
Articles 1770, 1409 (1) October 17, 1989 SEC Opinion to Ms. C.A. Reyes Santos Arbes v. Polistico G.R. No. 31057 September 7, 1929 Bautista p. 19 ii. Separate juridical personality When it exists
Article 1768 Evangelista v. CIR G.R. No. L-9996, October 15, 1957 Article 1775 Bautista p. 58 Effects
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Aguila v. CA, G.R. No. 127347, November 25, 1999 Bautista p. 56 C. Rules to Determine Existence
Evangelista v. CIR G.R. No. L-9996, October 15, 1957 P & M Cattle v. Holler 559 P2d 1019 Murphy v. Stevens 645 P2d 82, 85 2. a. Specific Rules Person not partners to each other not partners to third persons
Article 1769 (2) Oa v. CIR, G.R. No. L-19342, May 25, 1972 Obillos v. CIR G.R. No. L-68118, October 29, 1985 Pascual v. CIR, G.R. No. 78133, October 18, 1988 Stern v. Dept. of Revenue 217 NW 2d 326 (1974) Bautista 29-30 c. Sharing of gross return does not establish a partnership
Oa v. CIR, G.R. No. L-19342, May 25, 1972 d. Receipt of profits prima facie evidence of being a partner
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Article 1769 (4) Bautista 39-40 Heirs of Jose Lim and Juliet Lim, G.R. No. 172690, March 3, 2010 II. A. 1. Formal Requirements In General FORMING THE PARTNERSHIP
Article 1771 Lilibeth Sunga-Chan G.R. No. 143 340, August 15, 2001 2. When Notarized Agreement and Inventory Required
Articles 1771, 1773 Litonjua v. Litonjua G.R. Nos. 166299-300 December 13, 2005 3. Notarized and Recorded
February 29, 1980 SEC Opinion to Antonio Librea September 3, 1984 SEC Opinion to Romeo Orsolino December 1, 1993 SEC Opinion to Val Antonio Suarez C. Partnership Term
Article 1815
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SEC Memorandum Circular No. 5 Series of 2008, as amended 19 October 1984 SEC Opinion to Renato Santiago 8 July 1987 SEC Opinion to Ministry of Trade and Industry Article 1846 25 April 1984 SEC Opinion to Milton Christopher ___________ SEC Opinion to Demosthenes Gadioma III. KINDS OF PARTNERSHIPS A. Universal and Particular Partnerships
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Article 1783 CIR v. Suter G.R. No. L-25532, February 28, 1969 B. General and Limited Partnerships
Article 1825 Anfenson v. Banks L.R.A 1918D, 482, 163 NW 608 Brown v. Gernstein 460 NE 2d 1043 Hunter v. Croysdil 337 P2d 174
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29 February 1980 SEC Opinion issued to Antonio Librea Litonjua v. Litonjua, G.R. Nos. 166299-300, December 13, 2005 Primelink v. Lazatin-Magat, G.R. No. 167379, June 27, 2006 Aurbach v. Sanitary Wares G.R. No. 75875, December 15, 1989 Mendiola v. CA, G.R. No. 159333, July 31, 2006 J. Tiosejo Investment v. Spouses Ang, G.R. No. 174149, September 8, 2010 IV. RIGHTS AND OBLIGATIONS OF THE PARTNER A. 1. a. i. Rights of Partners Partners in General Mutual Agency General Rule
Article 1803, 1818 Stratemeyer v. West 466 NE 2d 306 Cook v. Brundidge 533 SW2d 751 ii. Exceptions
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Article 1811 Bautista pp. 147-148, 155-156, 164 ii. Interest in the Partnership
Article 1812 -1814 Bautista 175-177 Bohonus v. Amerco 602 P2d 469 First National Bank v. District Court 652 P2d 613 iii. Right to Participate in the Management
Articles 1774, 1819 Hodge v. Garett 614 P2d 420 Backowski v. Solecki 316 NW 2d 434 2. Right of Managing Partners
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Article 1816- 1817 De Leon & De Leon Jr. p. 170 Muasque v. CA, G.R. No. L-39780, November 11, 1985
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Articles 1792, 1252, 1292 b. Concurrence of Other Managing Partners Article 1802 5. Capitalist Partner
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Article 1823 VI. A. 1. Dissolution Meaning and Effect ENDING THE PARTNERSHIP
Article 1828 - 1829 Rojas v. Maglana G.R. No. 30616, December 10, 1990. 2. a. Causes Without Violating the Partnership Agreement
Articles 1830 (8), 1831, 1813-1814 3. a. Consequences of Dissolution Continuation Until Winding Up
Article 1829
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b.
Articles 1832-1834 LeMay Bank v. Lawrence, 710 SW2d 318 c. Discharge of Liabilities
Article 1835 d. i. Election to Continue the Business Dissolution Not Due to Wrongful Causes
Lange v. Bartlett 360 NW2d 702 ii. Dissolution Due to Wrongful Causes
Article 1840 Yu v. NLRC, G.R. No. 97212, June 30, 1993 4. a. Rights of Partners Upon Dissolution Right to Wind Up
Article 1836 b. Right to Damages for/Continue Business on Wrongful Dissolution Article 1837 c. Right to Lien or Retention, Stand in Place of Creditor, to be Indemnified
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Article 1842 B. 1. 2. Winding-Up and Liquidation Meaning of Winding-up The Right to Wind-up
Article 1836 3. 4. 5. The Liquidating Partner Period for WindingUp Rules on Settling Accounts
Article 1837 VII. LIMITED PARTNERSHIP A. B. C. Source of Limited Partnership Law Purpose of Limited Partnerships Definition and Formation
23 February 1994 SEC Opinion to Messrs. Tale and De Dios 17 August 1995 SEC Opinion to Attys. Espinosa and Hofilea 7 September 1998 SEC Opinion to Romulo, Mabanta
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E. 1.
Article 1854
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c.
Return of Contribution
Articles 1850, 1853 J. Limited and General Partner Article 1853 K. Dissolution
Article 1860 Najim v. De Mesa SEC Case No. 2526, September 21, 1987
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L.
Preference of Credits
Article 1863