1.

The following are the essential features of a contract of partnership,

EXCEPT:

a. It must be established for the common benefit of the members which is to

earn profits and divide the profits among the members.
b. There must be a mutual contribution of money, property or industry to a
common fund.
c. It must have a lawful object or purpose.
d. It has to always be in writing.

ANSWER: d. It has to always be in writing.

In the case of Sunga-Chan v. Chua, the Court discussed that partnership may be
constituted in any form, except where immovable property or real rights are contributed
thereto, in which case a public instrument shall be necessary. Hence, a verbal contract
of partnership may arise.
The essential features of partnership includes: a) there must be a valid contract; b)
there must be a mutual contribution of money, property or industry to a common fund; c)
there must have a lawful object or purpose; and d) must established for the common
benefit of the partners which is to obtain profits and to divide the profits among
themselves. (De Leon, 2019)

2. Ben and Jim formed a universal partnership of all present property. Which
of the following will not belong to the partnership?

a. Commercial building donated to Ben a month after the perfection of the

contract of partnership.
b. Lease rentals of the commercial building in the preceding item.
c. Residential building inherited by Jim a year before the perfection of the
contract of partnership.
d. Lease rentals of the residential building in the preceding item.

ANSWER: a. Commercial building donated to Ben a month after the perfection of the
contract of partnership.

Based on Article 1778 of the Civil Code, 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 possess at the time of the celebration of the contract.
 In this kind of partnership, the following become the common property of all the
partners: (1) Property which belonged to each of them at the time of the constitution of
the partnership; and (2) Profits which they may acquire from the property contributed.
As a rule, any property which the parties may acquire subsequently by
inheritance, legacy, or donation cannot be included in such type of partnership. Only
the fruits thereof may be included as partnership property. Therefore, the commercial
building donated to Ben a month after the perfection of the contract of partnership does
not belong to the partnership.

3. Ian and Patrick, brothers, inherited a three-floor residential building and the
lot on which it was constructed, from Barone, their father, who died without
a will. For the past three years, the brothers have divided between the two
of them the profit on the rental of the property. Are Ian and Patrick
partners?

a. Yes, because of their receipt of the profit from the use of the property.
b. No, each one is a sole proprietor of one-half of the whole property.
c. No, they are considered as stockholders of the whole property.
d. No, they are merely co-owners of the whole property.

ANSWER: d. No, they are merely co-owners of the whole property.

Ian and Patrick are not partners even if they share in the profit on the rental of the
property. They are considered as merely co-owners of the whole property. There is no
agreement to contribute money, property or service in a common fund in order to divide
profits. Based on Article 1769, co-ownership or co-possession does not of itself
establish a partnership, whether or not such co-owners or co-possessors share in any
profits made by the use of the property, as a rule.

However, by way of exception, if after Ian and Patrick inherited the property, they
subsequently made an agreement that they will contribute the property which they
received from the estate of their father in a common fund for the purpose of dividing
profits, then, partnership will exist in the said situation since all the elements of
partnership exist.