Professional Documents
Culture Documents
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)
A partnership has a juridical
personality which is separate and
distinct from that of the partners.
A partnership may sue and be sued in
its name or by its duly authorized
representatives. A managing 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
GENERAL RULE: No special form is
required for the validity or existence of
the contract of partnership.
EXCEPTIONS:
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).
A partnership
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])
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 (VCEDP), 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)
151
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
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 (VCEDP), 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)
MEMORY AID
moment of execution of
the
contract
of
partnership
personality from
the
date
of
issuance of the
certificate
of
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
7. Right of succession
Partnership has no right
of succession
Corporation has
right
of
succession
IN
CIVIL LAW
stockholders
because
corporation
is
not based on
this principle
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
JOINT VENTURE
It is hardly distinguishable from
partnership, since their elements are
similar, i.e. community of interest in
the business, sharing of profits and
losses, and a mutual right of control.
The main distinction in common law
jurisdiction is that partnership
contemplates a general business with
some degree of continuity, while
joint venture is formed for the
execution of a single transaction and
is thus of temporary nature
In Kilosbayan, Incorporated vs.
Guingona, Jr 232 SCRA 110 [1994],
the court 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:
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)
153
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.
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. GENERAL RULE: Persons who are
not partners as to each other are not
partners as to third persons.
EXCEPTION:
partnership
by
estoppel
2. Co-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:
present property
universal partnership of
profits
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
fixed
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
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 (VCEDP), 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)
MEMORY AID
common fund, with the intention of
dividing the same among themselves, as
well as all the profits which they may
acquire therewith.
In a universal 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
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 parties
intended 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
or immovable property which each of the
partners may posses at the time of the
celebration of the contract.
Movable or 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
CIVIL LAW COMMITTEE
IN
CIVIL LAW
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)
155
5.
6.
7.
8.
complied
will
all
the
legal
requirements for its establishment.
De Facto Partnership- one which has
failed to comply with all the legal
requirements for its establishment.
Ordinary or real partnership- one
which actually exists among the
partners and also as to third persons.
Ostensible
partnership
or
partnership de facto- one which in
reality is not a partnership, but is
considered a partnership only in
relation to those who, by their
conduct or admission, are precluded
to deny or disprove its existence.
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.
Open or notorious partnership- one
whose existence is avowed or made
known to the public by the members
of the firm.
Commercial or trading partnershipone formed for the transaction of
business.
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:
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 (VCEDP), 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)
MEMORY AID
2. if
none,
the
agreement as to
profits;
3. if none, pro rata
to contribution
OBLIGATIONS OF
THEMSELVES:
partners); but is
liable to third
persons, without
prejudice
to
reimbursement
from
the
capitalist
partners
PARTNERS
AMONG
I.
Obligation
with
respect
to
contribution of property
a) To contribute what had been
promised
b) To answer for eviction in case
the partnership is deprived of
determinate
property
contributed
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 the partnership for
the damages caused to it by the
delay in the contribution or the
CIVIL LAW COMMITTEE
IN
CIVIL LAW
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)
157
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 (VCEDP), 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)
MEMORY AID
a) According to 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
GENERAL RULE: A stipulation excluding
a partner from any share in the profits or
losses is VOID (Article 1799)
EXCEPTION: 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
CONTRACT OF SUB-PARTNERSHIP
One formed between a member of a
partnership and a third person for a
division of profits owing to him from
the partnership enterprise.
It is a partnership within a
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
contemplates tangible property
The specific partnership property
belongs to the partnership as a
separate juridical personality. The
partners have no actual interest in it
until after dissolution.
equal right with other partners to
possess specific partnership property
for partnership purposes
CIVIL LAW COMMITTEE
IN
CIVIL LAW
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)
159
3.
Right to
management
participate
in
the
MANAGEMENT OF PARTNERSHIP
I. When the manner of management
has been provided for in the
partnership agreement
ii.
b. Extent of power
i.
ii.
B.
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 (VCEDP), 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)
MEMORY AID
ii.
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
IN
CIVIL LAW
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)
161
PARTNERSHIP BY ESTOPPEL
Arises 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)
WINDING UP
Process of settling the partnership
business or affairs after dissolution.
TERMINATION
Point in time when all partnership
affairs are wound up or completed
and is the end of 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;
ii.
By the express will
of any partner, who must
act in good faith, when no
definite term or particular
undertaking is specified;
iii.
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;
iv.
By the expulsion
of any partner from the
business bona fide in
accordance
with
such
power conferred by the
agreement between the
partners;
DISSOLUTION
Change in the relation of the
partners caused by any partner
ceasing to be associated in carrying
on the business. (Article 1828)
It is the point in time when the
partners cease to carry on the
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
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.
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 (VCEDP), 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)
MEMORY AID
c.
IN
CIVIL LAW
e.
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)
163
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 liability
GENERAL RULE: Dissolution does not
automatically discharge the existing
liability of any partner
EXCEPTION: 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
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
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 (VCEDP), 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)
MEMORY AID
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) If the business is not
continued by the other
partners
i.
ii.
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
ii.
IN
CIVIL LAW
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)
165
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
Right of every partner 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
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 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 firm was 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
partnership obligations beyond the
amount of their capital contributions
General
Partner/
Partnership
1. Extent of liability
Limited
partners General partner
liability extends only to is
personally
his capital contribution
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 partner
contribute
cash
or may contribute
property
to
the money,
partnership but not property
or
services
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
5. Transferability of interest
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 (VCEDP), 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)
MEMORY AID
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
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
Retirement,
death, insanity
or insolvency of
a
general
partner
dissolves
the
partnership
IN
CIVIL LAW
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
ESSENTIAL
REQUIREMENTS
FOR
FORMATION OF LIMITED PARTNERSHIP
1. A certificate or articles of limited
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 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
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)
167
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 (VCEDP), 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)
MEMORY AID
3.
Confess
judgment
against the partnership;
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.
A limited partner is liable as a
general partner for the firms
obligations if he takes part or
interferes in the management of the
business.
IN
CIVIL LAW
are
sufficient
to
pay
partnership liabilities
b) The consent of all the
members
(general
and
limited partners) has been
obtained
EXCEPTION:
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 not
contributed 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
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)
169
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
NOTES:
Violation of the prohibition will give
rise to the presumption that it has
been made to defraud partnership
creditors
The prohibition is NOT ABSOLUTE,
there is no such prohibition if the
partnership assets are sufficient to
discharge partnership liabilities to
persons not claiming as general or
limited partners.
AGENCY
CONTRACT OF AGENCY
A contract whereby a person (agent)
binds himself to render some service
or to do something in representation
or on behalf of another (principal),
with the consent or authority of the
latter. (Article 1868)
LEASE OF
SERVICES
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.
1.
Principle
of
employment
is
applied.
2. Concurrence of
parties is necessary.
3. Employee exercise
ministerial functions
only.
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 (VCEDP), 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)
MEMORY AID
4.
Preparatory
Contract
4. Principal Contract
AGENCY TO SELL
SALE
1.
The
buyer
receives goods as
owner
2. Buyer pays the
price.
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.
PURPOSE OF AGENCY
The purpose of agency is to extend
the personality of the principal
through the 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
Any person or entity having juridical
capacity and capacity to act and not
otherwise disqualified, may enter
into an agency.
But as regards the party with whom
the agent acts or contracts, the legal
capacity of the principal rather than
the agent, is of the greater import.
B. Object
the services to be undertaken by the
agent
may cover all acts pertaining to a
business of the principal (general
agency) or one or more specific
transactions (special agency)
CIVIL LAW COMMITTEE
IN
CIVIL LAW
C. Cause
May be onerous or gratuitous but
presumed for compensation
NOTE: The agent may not be deprived
of his right to compensation by an
unjustified revocation of the agency
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.
ii.
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 agentwhen he carries out the
agency, or from his silence or
inaction according to the
circumstances.
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;
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)
171
NOTE:
In an implied agency, the
principal is still bound by the acts of the
agent just as in case of express agency
FORM OF AGENCY
Agency may be express or implied
from the acts of the principal, from
his silence or lack of action, or his
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 (VCEDP), 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)
MEMORY AID
GENERAL
RULE:
Acceptance
cannot be implied from silence of
the agent
EXCEPTION:
1. principal transmits his power of
attorney to the agent, who
receives
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,
and he did not reply to the letter
or telegram
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.
General Agent
IN
CIVIL LAW
Special Agent
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
3. Extent by which agent may bind
principal
Binds his principal by Cannot bind his
an act within the principal in a
scope of his authority manner beyond
although it may be or outside the
contrary to his special specific
acts
instructions
which he is
authorized
to
perform
on
behalf of the
principal
4. Termination of Authority
Apparent
authority Mere revocation
does not terminate by is effective to
the mere revocation terminate the
of
his
authority authority as to
without notice to the third
persons
third party
because
the
third person has
a
duty
to
inquire
5. Construction of Instructions of
Principal
Statement
of Authority of agent
principal
with must be strictly
respect to
the pursued
agents authority
would
ordinarily
regarded
as
advisory only
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)
173
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 (VCEDP), 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)
MEMORY AID
IN
CIVIL LAW
warranty
against
eviction;
Article 1883 does NOT apply
unauthorized
and
unenforceable but may be
ratified, in which case, may be
validated retroactively from the
beginning (Article 1407)
b. in his own name valid, 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
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)
175
SUB-AGENT
A person to whom the agent
delegates, as his agent, the
performance of an act for the
principal which the agent has been
empowered to perform through his
representative.
NOTE: The agent may appoint a
substitute (sub-agent) except when he
has been prohibited by the principal.
(ART 1892)
Instances when agent shall be
responsible for the acts of the
substitute:
1. when he was not given the power to
appoint; or
2. when he was given such power but
without designating the person, and
the person appointed was notoriously
incompetent or insolvent.
3. in these two cases the principal may
further bring an action against the
substitute with respect to the
obligations which the latter has
contracted under the substitution.
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 (VCEDP), 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)
MEMORY AID
NOTE: All acts of the substitute
appointed against the prohibition of the
principal shall be VOID.
JOINT AGENTS
Agents appointed by one or more
principals under such circumstances
as to induce the inference that it
was the principals intent that all
should act in conjunction in
consummating the transaction for
which they were appointed.
Their responsibility is JOINT; except
if solidarity has been expressly
stipulated.
If solidarity has been agreed upon,
each agent is responsible for the:
a. non-fulfillment of the agency
b. fault or negligence of his fellow
agents; except when the fellow
agents acted beyond the scope
of their authority.
NOTE: innocent agent has a right later
on to recover from the guilty or
negligent agent (ART 1217(2))
Instances when agent may incur
personal liability:
1. When the agent expressly binds
himself
NOTE: The individual liability of the
agent can be considered a further
security in favor of the creditor and
does not affect or preclude the
liability of the principal; both are
liable
2. When agent exceeds his authority
3. When agent by his acts prevents
performance on the part of the
principal
4. When a person acts as an agent
without authority or without a
principal
5. A person who acts as an agent of an
incapacitated principal unless the
third party was aware of the
incapacity at the time of the making
of the contract
FACTOR/COMMISSION AGENT
- one engaged in the purchase and sale
for a principal of personal property,
which for this purpose, has to be placed
in his possession and at his disposal.
CIVIL LAW COMMITTEE
ii.
CIVIL LAW
IN
BROKER
A middleman or intermediary who, in
behalf of others and for a
commission or fee, negotiates
contracts/transactions relating to
real or personal property.
Factorage
Compensation of
commission agent.
factor
or
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)
177
Ordinary Commission
Compensation for the sale of goods
which are placed in his possession or
at his disposal.
Guaranty Commission (Del credere)
Fee that is given in return for the
risk, which the agent has to bear in
the collection of credits.
An agent with a del credere
commission is liable to the principal
if the buyer fails to pay or is
incapable of paying.
GENERAL OBLIGATIONS OF PRINCIPAL
TO AGENT
Duties and liabilities of the principal
are primarily based upon the
contract and the validity of the
contract between them
SPECIFIC OBLIGATIONS OF PRINCIPAL TO
AGENT (CARIP)
1. To comply with all the obligations
which
the
agent
may
have
contracted within the scope of his
authority and in the name of the
principal
2. To advance to the agent, should the
latter so request, the sums necessary
for the execution of the agency
3. To reimburse the agent for what the
latter has advanced (plus interest),
even if the business was not
successful, provided the agent was
free from fault
4. To indemnify the agent for all the
damages, which the execution of the
agency may have caused the latter
without fault or negligence on his
part
NOTE: The agent may retain in
pledge the things which are the
object of the agency until the
principal effects this reimbursement
and pays the indemnity.
5. To pay the agent the compensation
agreed upon, or if no compensation
was specified, the reasonable value
of the agents services
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 (VCEDP), 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)
MEMORY AID
2.
IN
CIVIL LAW
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)
179
TRUSTS
TRUST
A legal relationship between one
person
having
an
equitable
ownership in property and another
owning the legal title to such
property.
CLASSIFICATIONS
1. Effectivity - from the viewpoint of
whether they become effective after
the death of the trustor or during his
life, it may be either:
a. testamentary trusts
b. trusts inter vivos (sometimes
called living trusts)
2. Creation - from the viewpoint of the
creative force bringing them into
existence, it may be either:
a) Express trust - created by the
intention of the trustor or of the
parties
b) Implied trust - one which comes
into being by operation of law.
This may be either:
1) Resulting trust - one in which
the intention to create a trust
is presumed by law to exist
from the transaction and facts
of the case
2) Constructive trust - one
imposed by law irrespective of
and even contrary to the
intention of the parties. It is
designed to promote justice,
frustrate fraud and prevent
unjust enrichment.
Persons involved in the creation of a
trust:
1. Trustor - the one who intentionally
creates a trust
A legal obligation
based
on
an
undertaking
supported
by
a
consideration,
which
obligation
may or may not be
fiduciary
in
character.
TRUST
DONATION
1. An existing legal
relationship
and
involves
the
separation of legal
and equitable title
There is a transfer
of property as well
as the disposition of
both
legal
and
equitable ownership
except in cases of
gifts in trust.
MEMORY AID
IN
CIVIL LAW
NOTES:
the 10-year prescriptive period in
case of implied trust begins to run
from the date the trustee repudiates
the express trust. In the case Sps.
Pascual, et al. vs. CA, et al. GR
115925, August 15, 2003, it was held
that repudiation takes place when
the adverse party registers the land.
the 4-year prescriptive period under
Article 1391 applies only if the fraud
does not give rise to an implied
trust, and the action is to annul a
voidable contract under Article 1390.
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)
181
express trust.
IMPLIED TRUST
Are those, without being express,
are deducible from the nature of the
transaction as matters of intention, or
which
are
superinduced
on
the
transaction by operation of law, as
matters of equity independently of the
particular intention of the parties.
RESULTING
CONSTRUCTIVE
TRUST
TRUST
1. Intention to create trust:
The intent of The trust is created
the parties to irrespective of or even
create a trust contrary
to
the
is presumed or intention of the parties
implied by law to promote justice,
from
the frustrate fraud and to
nature of their prevent
unjust
transaction
enrichment.
2. Prescriptive period:
The 10 year The
10
year
prescriptive
prescriptive
period
period shall be shall be counted from
counted from the time that the
the
time constructive
trust
repudiation is arises.
made
known
to beneficiary.
3. Examples:
Illustrated in Illustrated in Articles
Articles 1448, 1450, 1454, 1455, 1456
1449,
1451,
1452, 1453
EXPRESS TRUST
IMPLIED TRUST
1. As to creation
Created
by
the
intention of the parties
2. As to proof of trust
An express trust over
an immovable property
or any interest therein
cannot be proved by
parol evidence
An implied trust
over an immovable
or any interest
therein may be
proved
by
oral
evidence.
In
constructive
trusts,
even
if
there
is
no
repudiation, laches
may bar an action
to
enforce
an
implied trust.
2.
3.
4.
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 (VCEDP), 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)
MEMORY AID
5.
IN
CIVIL LAW
b)
Such positive acts of
repudiation have been made know to
the cestui que trust; and
c)
Evidence thereon is clear
and positive. (Vda. De Cabrera vs.
Court of Appeals 267 SCRA 339
[1997].)
NOTE: The enumeration is not exclusive.
Other examples of implied trust:
1. The registration of land under
torrens in the name of one person do
not bar evidence to show it was only
held in trust for another.
2. Certificate of registration of vehicle
placed in the name of a person
although the price was not paid by
him but by another.
3. One arising from the agents willful
violation of the trust reposed in him
by the principal by buying for
himself the property he was
supposed to buy for the principal
who designated and appointed him
to negotiate with the owner.
4. In consonance with the trust fund
doctrine in Corporation Law, the
assets of the corporation, as
represented by the capital stock, are
regarded as trust fund to be
maintained unimpaired for the
payment of corporate creditors.
Requisites
before
period
or
prescription may start in regard to
an action based on an implied
trust:
a)
the trustee has performed
unequivocal acts of repudiation
amounting to an ouster of the cestui
que trust.
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)