CLAPS GC

TOPIC NAME # CASE NAME 50.

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FACTS

DOCTRINE 1.

51.

2.

52.

Marjorie Tocao, William Belo vs. CA, Nenita Anay

X was admitted because of her expertise in the object of the partnership. She was to receive commissions. The agreement however was not reduced into writing. The other party denies existence of partnership. 1.

X contributed such expertise to the partnership and hence, under the law, she was the industrial or managing partner. While it is true that the receipt of a percentage of net profits constitutes only prima facie evidence that the recipient is a partner in the business, if there is other evidence to prove partnership, then partnership exists. One evidence is that X had a voice in the management of the affairs, including selection of people who would constitute the administrative staff and the sales force. Thus, X being a partner, had the right to demand for a formal accounting of the business and receive her share in the net profit.

53.

54.

Aguila, Jr. vsCA

Man sells conjugal property to a partnership. Later, he filed a complaint for declaration of nullity of their sale AGAINST Managing Partner.

2. An individual partner is not a real-party-in-interest in a case

involving sale between partnership and a 3rd person 3. The partners cannot be held liable for the obligations of the partnership unless it is shown that the legal fiction of a different juridical personality is being used for fraudulent, unfair, or illegal purposes 4. It is the partnership, not its officers or agents, which should be impleaded in any litigation involving property registered in its name.

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55. Angeles Secretary Justice (Garsha) vs. of -Partner Angeles and Partner Mercado entered a contract of Antichresis covering 8 parcels of land but Angeles filed a case of estafa against the Mercado when he discovered that the contract of Anti-Chresis was under the name of Mercado and his wife. Mercado argued that the Angeles spouses don't want to be identified because they might be kidnapped by the NPA/questioned by the BIP/their assets might be sequestered. Several taxpayers file two separate special civil actions questioning alleging the unconstitutionality of RA 7496 or the SNIT, claiming that it has started taxing general professional partnerships. A foreign corporation opened a representative office and placed x in charge of it. Agreement stipulated that expenses were to be funded by all parties as equal partners while the profits and commission will be shared among them. The foreign corp denies that

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1. 1. The lack of public instrument indicating partnership and lack of registration with the SEC does not negate the existence of partnership. 2. Failure to register the contract does not affect the liability of partnership and of partners to 3rd persons. 3. Failure to register does not affect the partnerships juridical personality.

56.

Tan vs Rosario

Del

Section 23 of the National Revenue Code states that the members of general professional partnerships (which are not business partnerships) are only taxed in their individual capacity.

57.

Mendiola Ca (Rocky)

vs

Corporations cannot become a member of a partnership in the absence of express authorization by statute or charter. This doctrine is based on: 1. Mutual agency between the partners, whereby the corporation would be bound by the acts of persons who are not its duly appointed and authorized agents and officers, would be inconsistent with the policy of the law that the corporation shall manage its own affairs separately and exclusively and 2. Such an arrangement would improperly allow corporate property to become subject to risk not contemplated by the stockholders when they

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they are partners. originally invested in the corporation

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58.

Ortega, Castillo, Bacorro CA, SEC,

Del Jr., vs.

The partnership agreement in this case does not provide for a specified period or undertaking. The "DURATION" clause simply states: The partnership shall continue so long as mutually satisfactory and upon the death or legal incapacity of one of the partners, shall be continued by the surviving partners." Relevant issue is what type of partnership is involved in here Po Chuan established a partnership with Lim Tanchu, etc. Po Chuan's mistress, Tan Put (third person), sold her drugstore for P 125, 000 which was used to invest in the partnership. When Po Chuan died, the third person-mistress Tan Put demanded for accounting and money from the partners. She also alleged that the other partners

Based on the Duration Clause, the partnership is one at will. The birth and life of a partnership at will is predicated on the mutual desire and consent of the partners. Verily, any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will. He must, however, act in good faith, not that the attendance of bad faith can prevent the dissolution of the partnership but that it can result in a liability for damages. BUT HERE > Neither would the presence of a period for its specific duration or the statement of a particular purpose for its creation prevent the dissolution of any partnership by an act or will of a partner.

59.

Lim Tanchu, etc. vs. Tan Put -- (Garsha

1.The remaining partners have no obligation to account to anyone for such acquisitions (long after the partnership had been automatically dissolved as a result of the death of one of the partners) in the absence of a clear proof that they had violated the trust of the deceased partner during the existence of the partnership. 2. There must be proof that the remaining partners have extracted money for the partnership in a fraudulent and illegal manner.

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misappropriated partnership funds. the

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60.

5.

61.

Pang Lim and Galvez vs- Lo Seng

Former partner, who bought the land leased to his partnership firm, wants to kick out the said firm from the property.

62. 63.

Liwanag vs CA

64.

Evangelista vs Abad Santos (Rocky)

Agent of a cigarette retail business acts beyond authority and tries to pass herself off as an industrial partner in order to avoid being convicted of estafa. A judge was a partner of a partnership who rendered services to it. Her fellow partners claim that she was not an industrial partner because she was working as a judge who

1. one partner cannot, to the detriment of another, apply exclusively to his own benefit the results of the knowledge and information gained in the character of partner 2. if a person, having no title to land, conveys the same to another by some one or another of the recognized modes of conveyance at common law, any title afterwards acquired by the vendor will pass to the purchaser; and the vendor is estopped as against such purchaser from asserting such after-acquired title 3. Topic on Constructive Trust: Former partner cannot take advantage of his acquisition of legal title of the property, to the detriment of his partner; such is a breach of his fiduciary duty. The court entitles the wrongfullydeprived partner of a remedy of a constructive trust. 4. Even assuming that a contract of partnership was entered into, the Court has ruled that when property has been received by a partner for a specific purpose and he later misappropriated it, he is guilty of estafa.

Although she was a judge, she rendered services for the partners without which they would not have had the well organized and operating business they have today. The law does not specify the kind of industry that a partner may thus contribute, thus the services may legitimately be considered as her contribution to the common fund. She is a judge and it cannot be said her profession is a business the interferes with the partnership.

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could not have rendered her full time and industry to the partnership. And if she was an industrial partnership, her position as a judge was contrary to the business of the partnership. Partners contributed money to partnership, which was supposed to print posters for the ConCon. Partner filed for recovery of unrealized profits 1st project and return of investment for 2nd project (which failed) X induced respondents into giving him money/property which he said would be considered as respondents lawful contribution and participation in Xs proposed corporation. The Corporation was not formed. X suffered losses (he bought things for the alleged corporation that he wanted to form, secured by mortgage, then later foreclosed). X said the respondents should share the loss. Partner claims damages for losses without dissolving the

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65.

Moran, Jr. vs CA

1st Project:

1. The grant of compensatory damages for unrealized profit is

allowed if there is sufficient evidence to prove that the venture is profitable and the amount granted is not speculative

66.

Pioneer Insurance & Surety Corporation vs. CA, Border Machinery & Heavy Equipment, Inc., (Bormaheco), Maglana, and Lim and

2nd Project 2. There are risks in any business venture and the failure of the undertaking cannot entirely be blamed on the managing partner alone, specifically of the latter exercised his best business judgment It is ordinarily held that persons who attempt, but fail, to form a corporation and who carry on business under the corporate name occupy the position of partners interse (among themselves). However, such a relation does not necessarily exist, for ordinarily persons cannot be made to assume the relation of partners, as between themselves, when their purpose is that no partnership shall exist. Since there was no intention here on the part of X to form a corporation (because he just defrauded the respondents), no de facto partnership was created among the parties which would entitle Lim to a reimbursement of the supposed losses of the proposed corporation.

67.

Soncuya vs De Luna

For a partner to be able to claim damages from another partner who manages the general partnership, a previous liquidation of the partnership is necessary.

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partnership. Partner A contributed capital for Partners B and C to invest in sari-sari store. Years later, A filed complaint for accounting or return of investment against B and C. Agustin and Inocencio formed a partnership. Managing partner Agustin and Inocencio borrowed money from the latter's wife. This money was used to complete the cascoes. Inocencio borrowed money (without the consent of the other partners) which was necessary for the completion of the casco. Even if he failed to notify the partners about this transaction, he asked his partners to examine the books but they omitted to do so. A partner died and the remaining partners wish to keep the deceased partners name in their law firms name.

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68.

Martinez vs Ong Pong Co~

69.

Agustin Inocencio (Garsha)

vs.

1. Agents have the duty of: a. rendering account of their transactions to the principal; and b. paying the principal everything they may have received by virtue of the mandatum (Art. 1695 & 1720,CC) 2. Failure to do said duties obliges them to refund the money that they have received for the purpose of establishing said store(object of transaction) 1. On the adjustment of the accounts of a partnership, the managing partner may be allowed to borrow or advance funds which are necessary for the completion of the work within the scope of the business and expressly provided for by the agreement of the partners. 2. Even if there was no affirmative consent of the partners but the act of borrowing is within the power of Respondent Inocencio as a managing partner, the work done in the casco made all the associates liable 3. It is the responsibility of the firm to answer to each partner for obligations he may have entered into in good faith in the interest of the partnership as well as risks in consequence of its management. 4. Debts incurred by the manager for the firms interest, impliedly acquiesced in by the others, must be shouldered by the firm.

70. 71.

In re Sycip (NOTE: De Leon says this case has been over ruled. I dont know if papayag si Caraan)

A partnership for the practice of law cannot be likened to partnerships formed by other professionals for business. Primary characteristics which distinguish the legal profession from business are: 1.A duty of public service, of which the emolument is a byproduct, and in which one may attain the highest eminence without making much money. 2.A relation as an "officer of court" to the administration of justice involving

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thorough sincerity, integrity, and reliability.

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3.A relation to clients in the highest degree fiduciary. 4.A relation to colleagues at the bar characterized by candor, fairness, and unwillingness to resort to current business methods of advertising and encroachment on their practice, or dealing directly with their clients. 72. 73. E. M. Bachrach vs."La Protectora", et al. X, a managing partner purchased objects for the business of the partnership. This transaction was secured by chattel mortgage. Prior to the purchase, the other partners executed a document saying that they grant X full authority to purchase the objects. The objects were later foreclosed. General partner tries to deny his approval of an heirs promotion to general from limited to partner. Industrial partners filed complaint against managing partner for return of their shares, based on a separate computation prepared by the latter The other members are liable like X. Their liability does not come from the document they executed but from the fact that they are members of the civil partnership and as such are liable for its debts it comes from the general principles underlying partnership liability.

74.

Goquiolay Sycip

vs

If a general manager allows or tolerates a limited partner to manage the business, it turns the latter into a general manager.

75.

Magdusa vsAlbaran

Topic is on when demand for return of investment may be made 1. A partner's share cannot be returned without first dissolving and liquidating the partnership. This because: return is dependent on the discharge of the creditors, whose claims enjoy preference over those of the partners all members of the partnership are interested in his assets and business, and are entitled to be heard in the matter of the firm's liquidation and the distribution of its property 2. Unless a proper accounting and liquidation of the partnership affairs is first had, the capital shares of the appellees, as retiring partners, cannot be repaid, for the firm's outside creditors have preference over the assets of the

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enterprise 3. One who must return the shares is the Partnership, not the partner 1. Condonation by the creditor of the share in partnership debt of one partner does NOT increase pro rata liability of other partners. 2.All partners including industrial ones, shall be liable pro rata with all their property and after all the partnership assets have been exhausted, for the contracts which may be entered into in the name and for the account of the partnership, under its signature and by a person authorized to act for the partnership. However, any partner may enter into a separate obligation to perform a partnership contract. (Art. 1816 of CC) 3. Given that there are 5 general partners and one of the 5 of them was condoned by the creditor Island Sales, each of the four general partners is liable to pay for 1/5 of the general partnership debt. The heirs are in their own right the successors of the deceased partner. From the very moment he died, his rights to the partnership were transmitted to them through operation of law called succession. It does not require that one of them be the administrator of the estate.

76.

Island Sales, Inc. vs United Pioneers General Construction Company, et. al (Garsha)

77.

Emance vs Ca, Estate of Vicente Tabanao (Rocky)

78.

Fue Leung vs IAC

A general partnership, United Pioneers, bought a motor vehicle from creditor Island Sales. But the general partnership failed to pay for the installment which is why the seller sued the partnership for the unpaid balance. Creditor Island Sales dismissed the complaint against one of five general partners. A partnership dissolved. The living partner refused to give an accounting to the heirs of the deceased partner and to convey the share of this deceased partners shares. Since none of the heirs were made to be the administrator of the estate they cannot sue. Chinese businessman tries to deny his partnership with another Chinese businessman, then tries to deny the latters rights to account for the partnership profits. The partnership agreement in this case

Art 1842 states that a partner has the right to account for his interests in the winding up or dissolution of the partnership. This is applicable in this case where a dissolution must be ordered by the court due to the bickering between the former partners.

79. 80

Ortega, Del Castillo, Jr.,

The partnership is one at will, and it was dissolved when X resigned. Verily, any one of the partners may, at his sole pleasure, dictate dissolution

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Bacorro vs. CA, SEC, does not provide for a specified period or undertaking. The "DURATION" clause simply states: The partnership shall continue so long as mutually satisfactory and upon the death or legal incapacity of one of the partners, shall be continued by the surviving partners." X, a partner, resigned from the partnership. Issue was whether his resignation dissolved the partnership. 81 82. Primelink Properties and Development Corp (PPDC) vsLazatin Magat Request for rescission of Joint Venture Agreement on establishment of subdivision was granted by court. Possession of Land and Improvement given to Capital Partners; this was questioned by the Industrial partner who introduced the improvements therein.

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of the partnership at will. He must, however, act in good faith, not that the attendance of bad faith can prevent the dissolution of the partnership but that it can result in a liability for damages. The dissolution of a partnership is the change in the relation of the parties caused by any partner ceasing to be associated in the carrying on, as might be distinguished from the winding up of, the business. Upon its dissolution, the partnership continues and its legal personality is retained until the complete winding up of its business culminating in its termination. The liquidation of the assets of the partnership following its dissolution is governed by various provisions of the Civil Code; however, an agreement of the partners, like any other contract, is binding among them. Par 8 "Amendment to Articles of Partnership" (of the subject firm) used the term "retirement" which must be understood in a generic sense to mean the dissociation by a partner, inclusive of resignation or withdrawal, from the partnership that thereby dissolves it.

1. The dissolution will not immediately terminate the partnership; it

will continue until the winding up of partnership affairs is completed 2. Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative of the last surviving partner, not insolvent, has the right to wind up the partnership affairs, provided, however, that any partner, his legal representative or his assignee, upon cause shown, may obtain winding up by the court. During such time, properties are still owned by partnership; theyre subject to the ff: a. the right and obligations of the parties, of the creditors and of 3rd parties b. the settlement of accounts between the parties under Art 1839 3. 4. The chattel mortgage is invalid because the creditors were prejudiced in

83. 84. 85.

Singson

vs

A chattel mortgage over

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Isabela Sawmill (Rocky) partnership property was made in favor of a partner (as a form of a compromise because of an internal dispute) who decided to quit the partnership. This partner bought the property from the public auction without notifying the creditors of the partnership that she was no longer a partner. Chua and Jacinto Sunga formed a partnership to engage in the marketing of liquefied petroleum gas ("Shellite"). When Jacinto died, his wife Sunga and daughter continued the business without partner Chua's consent. Chua demanded for accounting but the wife and daughter of the deceased partner refused

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their rights by the execution of the chattel mortgage over the properties of the partnership. It does not appear that the withdrawal of the partner from the partnership was published in the newspapers. The creditors and the public in general had a right to expect that whatever, credit they extended the other partners under the same partnership title could be enforced against the properties of said partnership.

86.

Sunga-Chan vs. CA (Garsha)

1.The complaint of Chua for winding up of partnership affairs, accounting, appraisal, and recovery of shares and damages is a suit to enforce a SOLIDARY or joint and several obligations on the part of petitioners. 2.As it were, the continuance of the business and management of Shellite by petitioners against the will of Chua gave rise to a solidary obligation, the acts complained of not being severable in nature. 3. There is a solidary liability imposed because of the IMPOSSIBLITY to impose how much of the partnership assets or profits were misappropriated by each petitioner. In this case, the petitioners obligation to pay DAMAGES, attorneys fees and litigation fees are also solidary in nature because they petitioners were in bad faith.

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