CENTRO ESCOLAR UNIVERSITY

SCHOOL OF LAW AND JURISPRUDENCE

Agency, Trust, and Partnership

First Semester, School Year 2017-2018

Syllabus1

Atty. Marie Arcie Anne M. Sercado Bernardo

Email: amsercado@gmail.com

The Law on Partnership

October 6, 2017
I. Nature; Creation
A. Definition; essential features Art, 1767
B. Creation Arts. 1770, 1771, 1772, 1784, 1815, Code of Professional Responsibility
Rule 3.02, Art. 1411

Cases:
Agad v. Mabato, 23 SCRA 1223
Torres v. CA, 320 SCRA 428
Arbes v. Polistico, 53 Phil. 489
Tocao v. CA, 342 SCRA 20

C. Separate juridical personality Arts. 1768, 1775; National Internal Revenue Code Sec.
22 (b), NIRC Sec. 26; Art. 1811 par. (2)

Cases:
Aguila v. CA, 319 SCRA 246
Tan v. Del Rosario, 237 SCRA 324
Mendiola v. CA, 497 SCRA 346
Angeles v. Secretary of Justice, 465 SCRA 106

D. Mutual Agency Arts. 1803, 1818, 1819, 1820, 1821, 1822, 1825; Revised Rules of
Court, Rule 130, Sec. 29; 1997 Revised Rules of Civil Procedure Rule 14, Section 11;
Arts. 1800, 1801, 1802, 1832, 1833, 1834

E. Distinguish from:

1. Co-ownership; co-possession

1
This syllabus is based on the outline of Professor Ryan P. Oliva of the UP College of Law.

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 2. Tenancy in common; joint tenancy
3. Joint ventures
4. Joint adventures
5. Joint accounts
6. Cuentas en participacin
7. Agency

Arts. 1769, 1825, Arts. 239-243 Code of Commerce

Cases:
Gatchalian v. CIR, 67 Phil 666
Pascual v. CIR, 166 SCRA 560
Obillos v. CIR, 139 SCRA 436
Rivera v. Peoples Bank, 73 Phil 546
Tuason v. Bolanos, 95 Phil 106
Heirs of Tan Eng Kee v. CA, 341 SCRA 740
Aurbach v. Sanitary Wares, 180 SCRA 130
Litonjua v. Litonjua, 477 SCRA 576
Bourns v. Carman, 7 Phil 117
Sevilla v. CA, 160 SCRA 171
Philex Mining Corp. v. CIR, 551 SCRA 428

October 13, 2017

II. Kinds of Partnership

A. Universal Arts. 1776 1782, 739

B. Particular Arts. 1776, 1783
C. General Art. 1776
D. Limited Art. 1776
E. At will Art. 1785
F. For a term or undertaking Art. 1785
G. Commercial Art. 1767
H. Professional Art. 1767
I. By estoppels/apparent Art. 1825

Case:
Ortega v. CA, 245 SCRA 529

III. Kinds of partners

A. Industrial Arts. 1789, 1797

B. Capitalist Arts. 1789, 1790, 1797, 1808
C. Managing Arts. 1792, 1800, 1801, 1802

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 D. By estoppels Art. 1825

IV. Partners obligations to the partnership

A. To contribute; warrant Arts. 1786, 1787, 1788, 1790, 1791, 1795

B. To apply sums collected pro rata Art. 1792
C. To compensate Art. 1794
D. To be loyal; fiduciary duty Art. 1807

Cases:
Lim Tanhu v. Remolete, 66 SCRA 425
Liwanag v. CA, 281 SCRA 225
US v. Clarin, 17 Phil 84
Pang Lim v. Lo Seng, 42 Phil 282
Catalan v. Gatchalian, 105 Phil 1270

October 20, 2017

V. Partners obligations inter se

A. To bring to collation Art. 1793

B. To share in the profits/losses Arts. 1797, 1798, 1799
C. To render true and full information Art. 1806
D. Not to engage in another business Arts. 1789, 1808

Cases:
Pioneer Insurance v. CA, 175 SCRA 668
Evangelista v. Abad Santos, 51 SCRA 416
Moran v. CA, 133 SCRA 88
Martinez v. Ong Pong Co, 14 Phil 726
Agustin v. Inocencio, 9 Phil 134
Soncuya v. De Luna, 67 Phil 646

VI. Partners obligations to personal and partnership creditors; third parties

A. To have his partnership interest charged for personal debts (primary) Arts. 1814, 1827
B. To be liable pro rata for partnership debts (subsidiary and joint) Arts. 1816, 1817,
1835
C. Tort liability; breach of trust liability (primary & solidary) Arts. 1822 to 1824
D. Liability in case of estoppels Art. 1825; Corporation Code, Sec. 21
E. Liability of new partners (subsidiary) Art. 1826

Cases:
In re: SyCip, 92 SCRA 1

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 Litton v. Hill, 67 Phil 509
Goquiolay v. Sycip, 9 SCRA 663
Goquiolay v. Sycip, 108 Phil 947
MacDonald v. National City Bank, 99 Phil 156
Compaia Maritima v. Muoz, 9 Phil 326
Co-Pitco v. Yulo, 8 Phil 544
Pacific Commercial v. Aboitiz, 48 Phil. 841
Magdusa v. Albaran, 5 SCRA 511
Island Sales v. United, 65 SCRA 554
Muasque v. CA, 139 SCRA 533
Lim Tong Lim v. Philippine Fisging Gear, Inc., 317 SCRA 728
Bachrach v. La Protectora, 37 Phil 441
Guy v. Gacott, G.R. No. 206147, January 13, 2016

October 27, 2017

VII. Rights of a partner

A. To associate another in his share Art. 1804

B. To access, inspect, and copy partnership books Art. 1805
C. To have a formal account Arts. 1809, 1842
D. Property rights Art. 1810

1. To possess specific partnership property Art. 1811

2. To convey partnership interest Arts. 1812, 1813

E. To ask for dissolution Arts. 1830 (2), 1831

Cases:
Emnace v. CA, 370 SCRA 431
Dan Fue Leung v. IAC, 169 SCRA 746
US v. Clarin, supra

VIII. Partnerships obligations to partners

A. To reimburse; to answer for obligations contracted Art. 1796

Cases:
Martinez v. Ong Pong, 14 Phil 726
Agustin v. Inocencio, 9 Phil 134

IX. Rights of assignees

A. To receive the interest Art. 1813

B. To require an account Art. 1813

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 C. To ask for dissolution Art. 1831

November 3, 2017

X. Dissolution & Winding Up

A. Dissolution; winding up; termination Arts. 1828, 1829

B. Causes of dissolution

1. Without violating the agreement Art. 1830 (1)

2. In contravention of the agreement Art. 1830 (2)
3. By operation of law Art. 1830 (3)-(7)
4. By court decree Arts. 1830 (8), 1831

C. Effects of dissolution

1. Termination of mutual agency; exceptions Arts. 1832, 1833, 1834

D. Right to wind up Art. 1836

E. Settling of accounts/application of properties/sharing of profits & losses Arts.
1791, 1798, 1799, 1827, 1837, 1838
F. Effects of rescission Arts. 1838, 1839
G. Effects of continuation of the business Arts. 1840, 1841
H. Prescription of action Arts. 1153, 1144

Cases:
Idos v. CA, 296 SCRA 194
Ortega v. CA, 245 SCRA 529
Rojas v. Maglana, 192 SCRA 110
Lichauco v. Lichauco, 33 Phil 350
Bearneza v. Dequilla, 43 Phil 237
Singson v. Isabela Sawmill, 88 SCRA 623
Bonnevie v. Hernandez, 95 Phil 175
Yu v. NLRC, 224 SCRA 75
Sunga-Chan v. CA, 555 SCRA 275
Primelink Properties v. Lazatin-Magat, 493 SCRA 444

November 10, 2017

XI. Limited Partnership Arts. 1843 to 1867

Najim v. De Mesa, SEC-SICD Case No. 2526, September 21, 1987

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