1. When does a partnership begin to exist?

According to Article 1784. A partnership begins from the moment of the execution of the
contract, unless it is otherwise stipulated. (1979)
A partnership is consensual contract; hence, it exists from the moment of the celebration
of the contract by the partners. What is necessary is that the essential requisites of a contract
of partnership are present even when the partners have not yet actually given their
contributions, or even though its conditions or details, such as the participation of the
partners in the profits and losses and the nature of the partnership have not yet been fixed, as
they pertain to the accidental and not to the essential parts of the contract.
Where a partnership relation results, the law itself fixes the incidents of this relation, if
the parties fail to do so.

2. What is a partnership with a fixed term?

According Article 1785. When a partnership for a fixed term or particular undertaking is
continued after the termination of such term or particular undertaking without any express
agreement, the rights and duties of the partners remain the same as they were at such
termination, so far is consistent with a partnership at will.
A continuation of the business by the partners or such of them as habitually acted therein
during the term, without any settlement or liquidation of the partnership affairs, is prima
facie evidence of a continuation of the partnership.
A partnership with fixed term is one in which the term of its existence has been agreed
upon expressly (as when there is a definite period) or impliedly (as when a particular
enterprise or transaction is undertaken). The expiration of the term thus fixed or the
accomplishment of the particular undertaking specified will cause the automatic dissolution
of the partnership. (Art. 1830[1, a].)

3. Who is an industrial partner?

According to Article 1789. An industrial partner cannot engage in business for himself,
unless the partnership expressly permits him to do so; and if he should do so, the capitalists
partners may either excluded him from the firm or avail themselves of the benefits which he
may have obtained in violation of this provision, with a right to damage in either case. (n)
An industrial partner is one who contributes his industry, labor, or services to the
partnership. He is considered the owner of his services, which are his contribution to the
common fund. (Limuco vs. Calina, [C.A.] No. 10099-R, Sept. 9, 1953.)
Unless the contrary is stipulated, he becomes a debtor of the partnership for his work or
services from the moment of the commencement of the partnership. In effect, the partnership
acquires an exclusive right to avail itself of his industry. Consequently, if he engages in
business for himself, such acts is considered prejudicial to the interest of the other partners.

4. State the five obligation of a partner with respect to property he promised to contribute to
the partnership.
According to Article 1786. Every partner is a debtor of the partnership for whatever he
may have promised to contribute thereto.
He shall also be bound for warranty in case of eviction with regard to specific and
determinate things which he may have contributed to the partnership, in the same cases and
in the same manner as the vendor is bound with respect to the vendee. He shall also be liable
for the fruits thereof from the time they should have been delivered, without the need of any
demand. (1681a)
Obligations with respect to contribution of property:
The above article deals with the obligations of the partners among themselves and to the
partnership with respect to contribution of property. They are as follows:
(1) To contribute at the beginning of the partnership or at the stipulated time the money,
property, or industry which he may have promised to contribute;
(2) To answer for eviction in case the partnership is deprived of the determinate property
contributed; and
(3) To answer to the partnership for the fruits of the property the contribution of which he
delayed, from the date they should have been contributed up to the time of actual
delivery.
In addition, the partner has the obligation:
(4) To preserve said property with the diligence of a good father of a family pending
delivery to the partnership (Art.1163.); and
(5) To indemnify the partnership for any damages caused to it by the retention of the
same or by the delay in its contribution. (Art. 1788, 1170.)
The money or property contributed by a partner becomes the property of the partnership.
It necessarily follows that the same cannot be withdrawn or disposed of by the contributing
partner without the consent or approval of the partnership or of the other partners. (Lozana
vs. Depakakibo, 107 Phil. 728 [1960].)

5. Why is appraisal of the value of the goods or property contributed by a partner required?
How shall it be made?
According to Article 1787. When the capital or a part thereof which a partner is bound to
contribute consists of goods, their appraisal must be made in the manner prescribed in the
contract of partnership, and in the absence of stipulation, it shall be made by experts chosen
by the partners, and according to current prices, the subsequent changes thereof being for the
account of the partnership. (n)
Appraisal of goods or property contributed.
(1) Need for appraisal – the appraisal of the value of the goods contributed is necessary
to determine how much has been contributed by the partners.
a. In the absence of stipulation, the share of each partner in the profits and losses
is in proportion to what he may have contributed. (Art. 1797.)
b. The appraisal is made firstly, in the manner prescribed by the contract of
partnership; secondly, in the absence of stipulation, by the experts chosen by
the partners and according to the current prices.
c. After the goods have been contributed, the partnership bears the risk or gets
the benefit of subsequent changes in their value.
(2) Property subject to appraisal – in the case of immovable property, the appraisal is
made in the inventory of said property (see Arte 1779, 1795,); otherwise, it may be
made provided in Article 1787. There is no reason why the rule in Article 1787should
not also apply with respect to other kinds of property.

6. State the liability of a partner if he fails or delays his obligation with respect to
contribution of property? What is the reason for this rule?
Effect of failure to contribute property promised.
(1) Liability as debtor to partnership – the mutual contribution to a common fund is of
the essence of the contract of partnership (Art. 1767.), for without the contributions,
the partnership is useless. It is but logical that the failure to contribute is to make the
partner automatically a debtor of the partnership even in the absence of any demand.
(2) Remedy of other partners – under this article, the remedy of the other partners or the
partnership is not rescission or cancellation of the contract of partnership but an
action for specific performance (to collect what is owing) with damages and interest
from the defaulting partner who is made a debtor of the partnership for what he has
promised to contribute to the partnership, from the time he should have complied with
his obligation.
Article 1839, however, allows recession or annulment of a partnership contract on the
ground of fraud or misrepresentation committed buy one of the parties thereto.