Page 1 of 16
5. a CORPORATION cannot become a partner on
PARTNERSHIP
 It is a CONTRACT whereby two or more
persons (1) bind themselves to CONTRIBUTE money,
property, or industry to a COMMON FUND (2) with the
intention of dividing the PROFITS among themselves or
in order to EXERCISE a PROFESSION
 a STATUS and a FIDUCIARY RELATION
subsisting between persons carrying on a business in
common with a view on profit
CHARACTERISTICS OF THE CONTRACT OF
PARTNERSHIP
[C, C, L, I, AS, NP]
1. CONSENSUAL
 perfected by mere consent
2. CONTRIBUTION of money, property or industry to a
COMMON FUND
3. object must be a LAWFUL one
4. INTENTION of DIVIDING the PROFIT among the
PARTNERS
5. “AFFECTIO SOCIETATIS”
 the desire to formulate an ACTIVE UNION,
with people among whom there exist a mutual
CONFIDENCE and TRUSTS
6. NEW PERSONALITY
 the object must be for profit and not merely for
the common enjoyment otherwise only a co-
ownership has been formed. HOWEVER,
pecuniary profit need not be the only aim, it is
enough that it is the principal purpose
BUSINESS TRUSTS
 when certain persons entrust their property or
money to others who will manage the same for the
former
RULES ON CAPACITY TO BECOME A PARTNER
1. a person capacitated to enter into contractual
relations may become a partner
2. an UNEMANCIPATED MINOR CANNOT
become a partner UNLESS his parent or
guardian consents
3. a MARRIED WOMAN, cannot contribute
conjugal funds as her contribution to the
partnership UNLESS she is permitted to do so
by her husband OR UNLESS she is the
administrator of the conjugal partnership, in
which the COURT must give its consent
authority
4. a PARTNERSHIP being a juridical person by
itself can form another partnership
grounds of public policy
 a partner shares not only in profits but also in
the losses of the firm
RULE:
 the partnership has a PERSONALITY
SEPARATE and DISTINCT from that of each partner
CONSEQUENCES OF THE PARTNERSHIP BEING A
JURIDICAL ENTITY
1. its juridical personality is SEPARATE and
DISTINCT from that of each partner
2. the partnership CAN in GENERAL:
A) acquire and possess property of all
kinds
B) incur obligations
C) bring civil and criminal actions
D) can be adjudged insolvent even if the
individual members be each financially
solvent
3. unless he is generally sued, a partner has no
right to make a separate appearance in court, if
the partnership being sued is already
represented
LIMITATIONS ON ALIEN PARTNERSHIP
1) if 60% capital is not owned by Filipinos
 the firm cannot acquire by purchase or
otherwise AGRICULTURAL Philippine lands
2) foreign partnership may “lease” lands provided the
period does not exceed 99 years
3) foreign partnership may be “MORTGAGEES” of land
 period of 5 years, renewable for another 5
years
 they cannot purchase it in a foreclosure sale
RULES IN CASE OF ASSOCIATIONS NOT
LAWFULLY ORGANIZED AS PARTNERSHIP
1. it possesses NO LEGAL PERSONALITY
 it cannot sue as such HOWEVER, the partners
in their individual capacity CAN
2. one who enters into a contract with a partnership
as such cannot when sued later on for recovery
of the debt, allege the lack of legal personality
on the part of the firm, even if indeed it had no
personality
 ESTOPPEL
 whether a partnership has a juridical
personality or not depends on its PERSONAL LAW of
Notes of hotjurist
in foro conscientiae

the partnership or the law of the place where the
partnership was organized
REQUISITES FOR EXISTENCE OF PARTNERSHIP [I,
CF, JI]
1. INTENTION to create a partnership
2. COMMON FUND obtained from contributions
3. JOINT INTERESTS in the PROFITS
WHAT DO NOT ESTABLISH A PARTNERSHIP
1. mere co-ownership or co-possession
 even with profit sharing
2. mere sharing of GROSS returns
 even with joint ownership of the properties
involved
RULES TO DETERMINE THE EXISTENCE OF A
PARTNERSHIP
1. persons who are not partners 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. the receipt of the 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
A) as a DEBT by installments or otherwise
B) as WAGES of an employee
C) as RENT to a landlord
D) as an ANNUITY to a widow or
representative of a deceased partner
E) as INTEREST on a LOAN, though the
amount of payment vary with the profits
of the business
F) as the CONSIDERATION for the sale of
a GOOD WILL of a business or other
property or otherwise
 creditors are not partners, for their only
interest in the sharing of profits is the receipt
or payment of their credits
 in a partnership, the partners are
supposed to trust and have confidence in all
the partners
Page 2 of 16
PARTNERSHIP BY ESTOPPEL
 IF 2 persons not partners represent
themselves as partners to strangers, a partnership by
estoppel results
 WHEN 2 persons, who are partners, in
connivance with a friend who is not a partner inform a
stranger that said friend is their partner, a partnership by
estoppel also result to the end that the stranger should
not be prejudiced
RULE: LAWFUL OBJECT or PURPOSE
 a partnership must have LAWFUL OBJECT or
PURPOSE, and must be established for the common
benefit or interest of the partners
 it must be within the commence of man,
possible and not contrary to law, morals, good customs,
public order or public policy
 IF a partnership has SEVERAL PURPOSES,
one of which is UNLAWFUL, the partnership can still
validly exist so long as the illegal purpose can be
separated from the legal purposes
 NO need for JUDICIAL DECREE to dissolve
an unlawful partnership
 VOID AB INITIO
 one of the causes for the dissolution of a
partnership is “any event which makes it unlawful for the
business of the partnership to be carried on”
RULE:
 when an UNLAWFUL PARTNERSHIP is dissolved by
a judicial decree, the PROFITS shall be CONFISCATED
in FAVOR of the STATE
G. R.
 a partnership may be constituted in any form
EXCEPTION: PUBLIC INSTRUMENT
1. IMMOVABLE PROPERTY is contributed
2. REAL RIGHTS are contributed
* need for INVENTORY of IMMOVABLES
** for EFFECTIVITY of the partnership
contract insofar as innocent third persons
are concerned the same must be
REGISTERED if REAL PROPERTIES are
INVOLVED
 a partnership contract is NOT CONVERED by
the STATUTE of FRAUDS
 an AGREEMENT TO FORM a partnership
does not itself create a partnership
Notes of hotjurist
in foro conscientiae
 Page 3 of 16

B) any one of the members may

 when there are conditions to be fulfilled or when contract in his “own” name with third
a certain period is to lapse, the partnership is not created persons
till after the fulfillment of the conditions or the arrival of 1. NOT a partnership – NOT a LEGAL PERSON
the term and this is true even if one of the parties has 2. it may be sued by third person under the
already advanced his agreed share of the capital common name it uses
3. it cannot sue as such and cannot be ordinarily
RULE: if CAPITAL is P3,000 or more be a party to a civil action
REQUIRED: 4. insofar as innocent third parties are concerned
1. PUBLIC INSTRUMENT  the parities can be considered as members of
2. RECORDED – S.E.C. a partnership
5. as between themselves or insofar as third
*  FAILURE TO COMPLY – shall not effect the liability persons are prejudiced
of the partnership and its members to third persons  only the rules of co-ownership must apply

**  IF REAL PROPERTIES have been contributed, EFFECT OF CERTAIN TRANSACTIONS

REGARDLESS of the VALUE, a public instrument is 1. contracts entered into by a “partner” in his own
needed for the attainment of legal personality name may be sued upon still by him in his
individual capacity, not withstanding the
REQUIREMENTS WHERE IMMOVABLE / REAL absence of a partnership
PROPERTY IS CONTRIBUTED 2. when two or more individuals, having a common
1. PUBLIC INSTRUMENT interests in a business bring a court action, it
2. INVENTORY – signed and attached to the P.I. should be presumed that they prosecute the
*  applies regardless of the value of the real same in their individual capacity as co-owners
property and not in behalf of a partnership which does not
*  applies even if only real rights over the real exist in legal contemplation
property are
contributed CLASSIFICATION OF PARTNERSHIPS
A) ACCORDING TO MANNER OF CREATION
*  applies if aside from real property, cash or
1. ORALLY constituted
personal property is
2. constituted in a PRIVATE INSTRUMENT
contributed
3. constituted in a PUBLIC INSTRUMENT
4. REGISTERED – S.E.C.
 TRANSFER of land to the partnership must be duly
B) ACCORDING TO OBJECT
“recorded” in the ROD to make the transfer effective
1. UNIVERSAL
insofar as third persons are concerned
2. PARTICULAR
C) ACCORDING TO LIABILITY
RULE:
1. LIMITED PARTNERSHIP
 any immovable property or an interest therein maybe 2. GENERAL PARTNERSHIP
acquired in the partnership name D) ACCORDING TO LEGALITY
 title so acquired can be conveyed only in the 1. LAWFUL OR LEGAL
partnership name 2. UNLAWFUL OR ILLEGAL
E) ACCORDING TO DURATION
IF the partnership has ALIENS, it CANNOT OWN 1. for a SPECIFIC PEIOD or FIXED PERIOD
LANDS, whether public or private or whether agricultural 2. PARTNERSHIP AT WILL
or commercial EXCEPT through HEREDITARY F) ACCORDING TO REPRESENTATION TO OTHERS
SUCCESSION 1. ORDINARY PARTNERSHIP
2. PARTNERSHIP BY ETOPPEL
G) AS TO LEGALITY OF EXISTENCE
1. DE JURE PARTNERSHIP
LIMITATIONS ON ACQUISITION 2. DE FACTO PARTNERSHIP
1. AGRICULTURAL LANDS – 1024 HECTARES H) AS TO PUBLICITY
2. lease of public lands (GRAZING) – 2000 HAS. 1. SECRET PARTNERSHIP
2. NOTORIOUS / OPEN PARTNERSHIP
RULES IF A) articles are kept secret among the I) AS TO PURPSE
members 1. COMMERCIAL / TRADING
2. PROFESSIONAL / NON-TRADING

Notes of hotjurist
in foro conscientiae
 Page 4 of 16

3. those guilty of the same criminal offense if the

GENERAL PARTNERSHIP
 one where all the partners are general partners
 they are LIABLE even with respect to their individual
properties, after the assets of the partnership has been
exhausted
LIMITED PATNERSHIP
 one where at least one partner is a general partner
and the others are limited partners
 one whose liability is limited only up to the extent of his
contribution
partnership was entered into in consideration of
the same
 while spouses cannot enter into a universal
partnership, they can enter into a particular partnership
or be members thereof
 a universal partnership is virtually a donation to each
other of the partners properties or at least their usufruct

 a partnership where all the partners are limited PARTICULAR PARTNERSHIP

partners cannot exist as a limited partnership  a particular partnership has for its OBJECT:
 REFUSED REGISTRATION 1. DETERNMINATE THINGS – their use or fruits
 IF it continuous as such, it will be considered as a 2. SPECIFIC UNDERTAKING
general partnership and all the partners will be 3. EXERCISE of a PROFESSION or VOCATION
general partners
OBLIGATIONS OF THE PARTNERS
KINDS OF UNIVERSAL PARTNERSHIP RULE:
1. PARTNERSHIP OF ALL PRESENT  a PARTNERSHIP BEGINS from the moment of the
PROPERTY EXECUTION of the CONTRACT
2. PARTNERSHIP OF ALL PROFITS
*  even if contributions have not yet been made the firm
already exists, for partnership is a consensual contract
*UNIVERSAL PARTNERSHIP OF ALL PRESENT
PROPERTY DURATION OF PARTNERSHIP
 CONTRIBUTION of  UNLIMITED
1. ALL the properties actually belonging to the *  MAY BE AGREED UPON
partners 1. EXPRESSLY – definite period
2. the PROFITS acquired with said property 2. IMPLIEDLY – upon achievement of its
 BECOMES COMMON PROPERTY purpose
 EXCEPT all FUTURE PROPERTY
 FRUITS of FUTURE PROPERTY – PARTNERSHIP AT WILL
INCLUDED IF STIPULATED UPON  a partnership wherein its continued existence really
depends upon the will of the partners or even on the will
of any of them
*UNIVERSAL PARTNERSHIP OF PROFITS 2 KINDS:
 comprises all that the partners may acquire by the 1. when there is no term, express or implied
INDUSTRY or WORK of the partners become common 2. when it is continued by the habitual managers
property regardless of within said profits were obtained although the period has ended or the purpose
through the usufruct contributed has been accomplished
 EXCEPT PRIZES and GIFTS
3 IMPORTANT DUTIES OF EVERY PARTNER [C, D-F,
RULE: W]
 articles of universal partnership, entered without 1. duty to CONTRIBUTE what had been promised
specification of its nature, only constitute a universal 2. duty to DELIVER the FRUITS of what should
partnership of PROFITS have been delivered
3. duty to WARRANT
RULE:
RIULES ON THE DUTY TO CONTRIBUTE
 persons who are prohibited from giving each other any
1. the contribution must be made at the time the
donation or advantage cannot enter into universal
partnership is entered into UNLESS a different
partnership
period is stipulated
WHO:
1. HUSBAND and WIFE
2. no demand is needed to put the partner in
2. those guilty of ADULTERY or CONCUBINAGE
default

Notes of hotjurist
in foro conscientiae
 Page 5 of 16

interest and damages from the time he should have

3. the partner must exercise due diligence in
preserving the property to be contributed before
he actually contributes the same
4. a partner who promises to contribute to the
partnership becomes a promissory debtor of the
partnership
RULES ON THE DUTY TO DELIVER THE FRUITS
1. IF property has been promised, the fruits thereof
should also be given
2. the fruits referred to are those arising from the
time they should have been delivered, without a
need of any demand
3. IF the partner is in BAD FAITH, he is liable not
only for the fruits actually produced, BUT also
for those that could have been produced
4. IF MONEY HAS BEEN PROMISED, INTEREST
and DAMAGES from the time he should have
complied with his obligation should be given
5. NO DEMAND is needed to put the partner in
default
6. it is DELIVERY, actual or constructive that
TRANSFERS OWNERSHIP
RULES ON THE DUTY TO WARRANT
1. the warranty in case of eviction refers to specific
and determinate things already contributed
complied with his obligation
CAPITALIST PARTNER
 one who FURNISHES CAPITAL
* NOT EXEMPTED from LOSSES
* he can engage in other business PROVIDED
there is no competition between the partnership
and his business
* share in the profits according to agreements
INDUSTRIAL PARTNER
 one who FURNISHES INDUSTRY or LABOR
* he is EXEMPTED from LOSSES as between
the partner BUT liable to strangers without prejudice
to reimbursement from the capitalist partner
* he CANNOT engage in any other BUSINESS
WITHOUT the express CONSENT of the other
partners, OTHERWISE
1. he can be EXCLUDED from the firm
- plus damages OR
2. the BENEFITS he obtains from the other
businesses CAN BE AVAILED of by the other
partners
- plus damages
 whether or not there is COMPETITION
* in computing always look for ----- NET PROFITS
----- NET
LOSSES
CAPITALIST – INDUSTRIALIST PARTNER
 one who contributes BOTH CAPITAL and INDUSTRY

2. there is EVICTION whenever by a final GENERAL PARTNER

judgment based on a right prior to the sale or an
act imputable to the partner, the partnership is
deprived of the whole or a part of the thing
purchased
RULE WHEN CONTRIBUTION CONSISTS OF GOODS
 APPRAISAL of VALUE is needed to determine
how much was contributed
 one who is liable “beyond” the extent of his
contribution
LIMITED PARTNER
 one who is liable “only” to the extent of his contribution
*** an industrial partner can only be a general partner,
never a limited partner

HOW APPRAISAL MADE MANAGING PARTNER

1. as PRESCRIBED in the CONTRACT
2. in default, by EXPERTS chosen by the partners,
and at CURRENT PRICES
* necessity of the INVENTORY – APPRAISAL
RULE on RISK of LOSS
 after goods have been contributed, the partnership
bears the risk of subsequent changes in the value
RULE:
 a partner who has undertaken to contribute a sum
of money and fails to do so becomes a debtor for the
 one who manages actively the firms affairs
SILENT PARTNER
 one who does not participate in the management,
though he shares in the PROFITS or LOSSES
LIQUIDATING PARTNER
 one who winds up or liquidates the affairs of the firm
after it has been dissolved
OSTENSIBLE PARTNER
 one whose connection with the firm is public and open

Notes of hotjurist
in foro conscientiae
 Page 6 of 16

SECRET PARTNER 2. the other partners have not collected their part
 one whose connection with the firm is concealed or of the credit
kept secret 3. the debtor subsequently becomes INSOLVENT

DORMANT PARTNER RULE: - the partner shall be obliged to bring to the

 one who is both a secret (hidden) and silent (not
managing) partner
NOMINAL PARTNER
 one who is not really a partner BUT who may become
liable as such insofar as third persons are concerned
RULE:
 partners shall CONTRIBUTE EQUAL SHARES to the
capital of the partnership
* it is permissible to contribute UNEQUAL SHARES
IF there is a stipulation to this effect
* in the absence of proof, the shares are presumed
to be equal
CONDITIONS before a capitalist partner is obliged
to sell his shares / interest to the other partners [IL,
RC, NA]
partnership
capital what he received even though he may have
given receipt for
his share only
* DOES NOT APPLY when debt was collected after
dissolution of the partnership
RULE:
* every partner is responsible to the partnership for
damages suffered by it through his fault
* he cannot compensate them with the profits and
benefits, which he may have earned for the partnership
by his industry
* the courts may equitably lessen his responsibility
“RES PERIT DOMINO”

1. if there is IMMINENT LOSS of the BUSINESS of *RULES ON WHO BEARS THE RISK OF LOSS
the partnership
1. if SPECIFIC and DETERMINATE THINGS NOT
2. he REFUSES to CONTRIBUTE an FUNGIBLE whose USUFRUCT is enjoyed by a
ADDITIONAL SHARE to the CAPITAL firm
 the PARTNER who OWNS it bears the loss
3. there is no agreement to the contrary for ownership was never transferred to the firm

* INDUSTRIAL PARTNER IS EXEMPTED 2. FUNGIBLE or DETERIORABLE

 FIRM bears the loss for it is evident ownership
was transferred
*RULE if MANAGING PARTNER COLLECTS A
CREDIT 3. THINGS CONTRIBUTED to be SOLD
FIRM bears the loss for evidently the firm was
REQUISITES: intended to be the owner
1. existence of at least 2 debts ----
PARTNERSHIP 4. CONTRIBUTED under APPRAISAL
---- PARTNER  FIRM bears the loss because this has the
2. both sums are demandable effect of an implied sale
3. the collecting partner is the managing partner

* the sum thus collected shall be applied to the two

credits in
proportion to their amounts
RULE on RESPONSIBILITY of the FIRM
RULE:
* where a partner receives his share in the partnership 1. to REFUND amounts disbursed on behalf of the
credit firm plus legal interest from the time expenses
CONDITIONS: where made
1. a partner has received his share in the
partnership credit – in whole or in part

Notes of hotjurist
in foro conscientiae

2. to ANSWER to each partner for OBLIGATIONS
he may have entered into in good faith in the
interest of the partnership, as well as the risks in
consequence of its management
* REFUND must be made even in case of failure of the
enterprise entered into, provided the partner is not at
fault
* AMOUNT DISBURSED – does not refer to the
ORIGINAL CAPITAL
*HOW PROFITS ARE DISTRIBUTED
1. according to AGREEMENT
2. IF NONE, according to amount
CONTRIBUTION
*HOW LOSSES are DISTRIBUTED
1. according to AGREEMENT as to losses
2. IF NONE, according to agreement as to
PROFITS
3. IF NONE, according to amount of
CONTRIBUTION
* an INDUSTRIAL PARTNER shall receive a JUST and
EQUITABLE share in the profits
*RULE on INDUSTRIAL PARTNERS’ LIABILITIES
- may be held liable by third persons BUT he may
recover what he has paid from the other capitalist
partners
*RULE on DESIGNATION by THIRD PERSON of
SHARES in PROFITS and LOSSES
* third person is NOT a PARTNER -- appointed to only
distribute shares
* the designation of shares by third persons may be
IMPUGNED, IF it is MANIFESTLY INEQUITABLE
* the designation of shares by third persons CANNOT
be IMPUGNED EVEN IF MANIFESTLY INEQUITABLE
IF:
1. the aggrieved partner has already BEGUN to
EXECUTE the decision
2. the aggrieved partner has not IMPUGNED the
distribution within 3 months he had knowledge
*RULE IF APPOINTMENT OTHER THAN in the
ARTICLES of PARTNERSHIP
1. power to act may be REVOKED at ANY TIME
with or without just cause
 REMOVAL should be done by the controlling
interest
2. EXTENT of POWER
 as long as he remains manager, he can perform all
acts of administration
BUT – if others oppose and he persists, he can be
removed
Page 7 of 16
*RULE WHEN there are 2 or MORE MANAGERS
CONDITIONS:
1. 2 or more partners are managers
2. there is no specification of respective duties
3. there is no stipulation requiring UNANIMITY
SPECIFIC RULES:
1. each may separately execute all acts of
administration
 UNLIMITED POWER to ADMINISTER
2. IF any of the managers OPPOSE
of  MAJORITY RULE
 IN CASE OF A TIE
- persons owning controlling interest prevail
provided they are also managers
* right to oppose is not given to NON-MANAGERS
* OPPOSITION should be done BEFORE the acts
produce legal effects insofar as third persons are
concerned
RULE WHEN UNANIMITY is REQUIRED
1. the CONCURRENCE of all shall be necessary
for the validity of the acts
2. the ABSENCE or DISABILITY of ANYONE of
them CANNOT BE ALLEGED UNLESS there is
imminent danger of grave or irreparable injury to
the partnership
RULE ON DUTY of THIRD PERSONS
 third persons are not required to inquire as to whether
or not a partner with whom he transacts has the consent
of all the managers
*RULES to be observed when the manner of
management has not been agreed upon:
1. all the partners are considered AGENTS
 whatever any one of them may do alone shall
not bind the partnership
2. IF the acts of one are opposed by the rest, the
majority shall prevail
3. when a partner acts in his OWN NAME, he does
not bind the partnership
4. authority to bind the firm does not apply if
somebody else has been given authority to
manage in the articles of organization or through
some other means
5. ALTERATIONS REQUIRE UNANIMITY
- IMMOVABLE partnership property
- BUT if the refusal to consent by the others is
prejudicial to the interest of the partnership
Notes of hotjurist
in foro conscientiae

- COURTS INTERVENTION may be sought
RULES on ASSOCIATE of PARTNER
1. every partner may associate another person
with him in his share
2. for a partner to have an associate in his share
 consent of all the other partners is NOT
REQUIRED
3. for the associate to become a partner
 ALL MUST CONSENT
RULES on PARTNERSHIP BOOKS
1. kept at the principal place of business of the
partnership
2. at any reasonable hour, every partner shall have
access to and may inspect and copy any of
them
DUTY of PARTNERS TO GIVE INFORMATION
 good faith not only requires that a partner should not
make any FALSE CONCEALMENT, BUT he should
abstain from all concealment
DUTY to ACCOUNT [B, P, U-P]
 every partner must account to the partnership
1. any benefit acquired
2. any profits received
3. any use of partnership property
RIGHT TO DEMAND a FORMAL ACCOUNT
 any partner shall have the right to a formal account as
to partnership affairs
1. if wrongfully excluded from partnership
BUSINESS
2. if wrongfully excluded from partnership
PROPERTY by his co-partners
3. if the right exists under the terms of agreement
4. if the other partner receives other benefits,
profits or uses partnership property
5. whenever other circumstances render it just and
reasonable
* the right to demand an accounting exists as long as
the partnership exists
* prescription begins to run only upon the dissolution of
the partnership when the final accounting is done
PROPERTY RIGHTS OF PARTNERS [P, I, M]
1. rights in specific PARTNERSHIP PROPERTIES
2. INTERESTS in the PARTNERSHIP
3. right to PARTICIPATE in the MANAGEMENT
RULE:
Page 8 of 16
* a partner is CO-OWNER with his partners of
SPECIFIC PARTNERSHIP PROPERTY
* RIGHTS of a PARTNER in SPECIFIC
PARTNERSHIP PROPERTY
1. he has equal rights with his partners to
POSSESS the property BUT only for
PARTNERSHIP PURPOSES
 he may possess such property for other
purposes PROVIDED the other partners
expressly or impliedly gives their CONSENT
2. he CANNOT ASSIGN his right to the property
EXCEPT if all the other partners assign their
rights in the same property
3. his right to the property is NOT SUBJECT to
ATTACHMENT or EXECUTION, EXCEPT on a
claim against partnership
4. his right to the property is NOT SUBJECT to
LEGAL SUPPORT
* if there is PARTNERSHIP DEBT, the specific property
can be attached
RULE:
* a PARTNERS INTEREST in the partnership is his
SHARE of the PROFITS and SURPLUS
IT CAN BE: [A, A, LS]
1. ASSIGNED
2. ATTACHED
3. be subject to LEGAL SUPPORT
*EFFECTS of CONVEYANCE by PARTNER of his
INTEREST in the PARTNERSHIP
1. IF he conveys his WHOLE INTEREST
A) partnership may still remain
B) partnership may be dissolved
* mere conveyance does not dissolve the
partnership
2. the ASSIGNEE does not necessarily become a
partner
 the ASSIGNOR is still the partner, with a right
to demand accounting and settlement
3. the ASSIGNEE CANNOT interfere in the
MANAGEMENT or ADMINISTRATION of the
firm
 the ASSIGNEE CANNOT also DEMAND [I, A,
I]
A) INFORMATION
B) ACCOUNTING
C) INSPECTION of partnership books
Notes of hotjurist
in foro conscientiae

*** while a partners INTEREST in the firm may be
CHARGED or LEVIED upon, his INTEREST in a specific
firm PROPERTY CANNOT be attached.
RIGHTS of the ASSIGNEE
1. to get whatever profits the assignor-partner
would have obtained
2. to avail himself of the usual remedies in case of
fraud in the management
3. to ask for ANNULMENT of the contract of
assignment IF:
A) he was induced to enter into it through any of
the vices of consent OR
B) he himself was incapacitated to give consent
4. to demand an accounting BUT only if the
partnership is dissolved
PREFERENTIAL RIGHTS of PARTNERSHIP
CREDITORS
* partnership creditors are entitled to PRIORITY over
partnership assets, including the partners interest in the
profits
** SEPARATE or INDIVIDUAL creditors have
PREFERENCE in separate or individual properties
* when the CHARGING ORDER is applied for and
granted, the court may appoint a receiver of the partners
share in the profits
 the receiver appointed is entitled to any relief
necessary to conserve the partnership assets for
partnership purposes
* interest charged may be redeemed at any time
before foreclosure
* AFTER FORECLOSURE the interest may still be
redeemed by (without causing dissolution)
1. with separate property, by any one or more of the
partners OR
2. with partnership property, by any one or more
partners with the consent of all the partners whose
interests are not so charged or sold
* consent of the delinquent partner not needed
RULE:
 every partnership shall operate under a FIRM NAME
* the firm name may or may not include the name of
one or more of the partners
** STRANGERS who include their names in the firm
are liable as partners because of ESTOPPEL, BUT do
NOT have the RIGHTS of partners
Page 9 of 16
** IF a LIMITED PARTNER includes his name in the
firm name, he has obligations BUT not the rights of a
general partner
RULE on LIABILITY for CONTRACTUAL
OBLIGATIONS
* all partners, including industrial ones, shall be liable
pro-rata with all their property and after all the
partnership assets have been exhausted
* NOT APPLICABLE for TORTS or CRIMES -----
LOSS
----- INJURY
-----
MISAPPROPRIATION
** while an INDUSTRIAL PARTNER is exempted by
law from LOSSES as between the partners, he is NOT
EXEMPTED from liability insofar as third persons are
concerned
 he may recover what he has paid from the
CAPITALIST partners
* under the law the liability of the partners is subsidiary
and joint NOT principal and solidary
*RULE on LIABILITY of a PARTNER who has
WITHDRAWN
1. a partner who withdraws is not liable for
liabilities contracted after he has withdrawn
2. if his interest has not yet been paid him
 his right to the same is that of a mere creditor
** a stipulation exempting liability to third persons is
VOID
* any partner may enter into a separate obligation to
perform a partnership contract
RULE:
* every partner is an “agent” of the partnership for the
purpose of its business
G.R.- the act of every partner for apparently carrying on
in the USUAL WAY the business of the partnership of
which he is member binds the partnership
EXCEPT:
1. if he has NO AUTHORITY and
2. the person with whom he was dealing with HAS
KNOWLEDGE of the fact that he has no such authority
RULE:
 an act of a partner which is not apparently for the
carrying on of business of the partnership in the usual
Notes of hotjurist
in foro conscientiae

way does not bind the partnership UNLESS authorized
by the other partners
* a partnership is a CONTARCT of MUTUAL AGENCY,
each partner acting as a principal on his own behalf and
as an agent for his co-partners or the firm
REQUISITES on WHEN can a partner BIND the
partnership
1. expressly or impliedly AUTHORIZED
2. when he acts in BEHALF AND IN THE NAME of
the partnership
INSTANCES of IMPLIED AUTHORIZATION
1. when the other partners DO NOT OBJECT,
although they have knowledge of the act
2. when the act is for “apparently carrying on in the
usual way the business of the partnership
* this is binding on the firm even if the partner
was not really authorized PROVIDED that the third
party is in GOOD FAITH
RULE on UNUSUAL ACTS
 one or more but less than all the partners HAVE NO
AUTHORITY TO:
[AP, DG, AI, CJ, EC, SA, RC]
1. ASSIGN the PARTNERS PROPERTY
2. DISPOSE of GOODWILL
3. do any other act which would make it impossible
to carry on the ordinary business of the
partnership
4. CONFESS a judgment
5. ENTER into a COMPROMISE
6. SUBMIT to ARBITRATION
7. RENOUNCE to CLAIM
*RULES on CONVEYANCE of REAL PROPERTY
1. where title to real property is in the partnership
name
 any partner may convey title to such property
by a conveyance executed in the partnership
name
* PARTNERSHIP MAY RECOVER SUCH
PROPERTY
EXCEPT:
1. if the firm is engaged in the buying and
selling of land (USUAL BUSINESS)
2. if property was conveyed to a HOLDER
for VALUE and who had NO
KNOWLEDGE of the partners LACK of
AUTHORITY
2. where title is in the name of the partnership and
partner sold in his OWN NAME
Page 10 of 16
 IF DONE IN USUAL BUSINESS
 buyer does not become owner BUT
ACQUIRES EQUITABLE INTEREST
 IF NOT DONE IN USUAL BUSINESS
 buyer does not become owner and is not
even entitled to equitable interest
3. where title is in the name of one or more BUT not
all the partners
 partners in whose name the title is named MAY
CONVEY BUT the PARTNERSHIP may RECOVER
such property IF done not in its USUAL BUSINESS
EXCEPT if he had transferred it to a Holder for value
4. when property “held in trust” by partner
 a sale only conveys EQUITABLE INTEREST
5. when title is in the name of all partners
 conveyance executed by all partners possess all
rights of such property
EQUITABLE INTEREST
-BENEFICIAL INTEREST, BUT NOT NAKED
OWNERSHIP
*RULE on ADMISSION or REPRESENTATION MADE
by a PARTNER
 an admission by a partner is an admission against the
partnersip,under the following conditions:
1. the admissions must concern partnership affairs
2. must be within the scope of his authority
RESTRICTIONS ON THE RULE:
1. admissions made BEFORE DISSOLUTION are
binding only when the partner has authority to
act on the particular matter
2. admissions made AFTER DISSOLUTION are
binding only if the admissions were necessary to
WIND UP the business
3. an admission made by a former partner made
after he has RETIRED from the partnership is
not evidence against the firm
EFFECT of NOTICE to a PARTNER
 notice to a partner is notice to the partnership
*notice to a partner, given while already a partner is a
notice to the partnership PROVIDED it relates to
partnership affairs
Notes of hotjurist
in foro conscientiae

EFFECT of KNOWLEDGE ALTHOUGH NO NOTICE
WAS GIVEN:
* knowledge of the partner is also knowledge of the
firm PROVIDED THAT:
1. the knowledge was acquired by a partner who is
acting in the particular matter involved;and
2. the partner having knowledge, had reason to
believe that the fact related to a matter which
had some possibility of being the subject of the
partnership business AND he was so situated
that he could communicate it to the partner
acting on that particular matter
* SERVICE of PLEADINGS on the partner in a law
firm is also service on the whole firm and the other
partners
LOSS OR INJURY
RULE on WRONGFUL ACT or OMISSION of a
PARTNER (SOLIDARY LIABILITY)
* the partnership is solidarily liable with the partner if
the wrongful act or omission
1. the partner is acting in the ordinary course of
business of the partnership OR
2. with authority of his co-partners
* innocent partners have right to recover from the
guilty partner
* When the firm and other partners not liable:
1. if the wrongful act or omission was NOT DONE
A) within scope of partnership business
B) with authority of the other co-partners
2. if the act or omission is NOT WRONGFUL
3. if the act or omission, although wrongful did not
make the partner concern liable
- DAMNUN ABSQUE INSURIA
4. if the wrongful act or omission was committed
after the firm had been dissolved and the same
was not in connection with the process of
winding up.
LIABILITY of PARTNERSHIP for
MISAPPROPRIATION – (SOLIDARY LIABILITY)
1. RECEIVING PARTY MISAPPROPRIATES
2. ANY PARTNER MISAPPPROPRIATES
- money or property in custody of
partnership
PARTNER BY ESTOPPEL
Page 11 of 16
 a person who represents himself or consents to
another / others representing him to anyone as a partner
either in an existing partnership or in one that is fictitious
or apparent
PARTNERSHIP BY ESTOPPEL
 when all the members of the existing partnership
consent to such representation of a partner by estoppel
RULES AND SITUATIONS:
1. if a third person is misled and acts because of
such misrepresentation
 the deceiver is a partner by estoppel
2. if the partnership consented to such
misrepresentation
 partnership liability results
3. if the firm had not consented
 no partnership liability results BUT the
deceiver is considered still as a “partner by
estoppel” with all the obligations but not the
rights of a partner
4. when a person represents himself as a partner
of a NON-EXISTENT partnership
 NO partnership liability results BUT the
deceiver and all persons who may have aided
him in the misrepresentation are still liable
 liability would be JOINT or PRO-RATA
* when although there is misrepresentation, if the third
party is not deceived, the doctrine of estoppel does not
apply
BURDEN of PROOF
 the creditor or whoever alleges the existence of a
partner or partnership by estoppel has the burden of
proving the existence of the MISREPRESENTATION
AND INNOCENT RELIANCE on it
ENTRY OF A NEW PARTNER into an EXISTING
PARTNERSHIP
RULE:
* he shall be liable for all the obligations of the
partnership BUT his liability will extend only to his share
in the partnership property
* his own individual property shall be excluded
* same liability of a limited partner
PREFERENCE of PARTNERSHIP CREDITORS
RULE:
* the creditors of the partnership shall be preferred to
those of such partner as regards the partnership
property
Notes of hotjurist
in foro conscientiae

without prejudice to this right
 the private creditors of each partner may ask the
attachment and public sale of the share of the latter in
the partnership assets
**IF a partner sells his share to a third party, BUT the
firm itself still remains SOLVENT, partnership creditors
CANNOT assail the validity of the sale by alleging that it
is made in fraud of them, since they have not really been
prejudiced
DISSOLUTION AND WINDING UP
 the change in the relation of the partners caused by
any partner causing to be associated in the carrying on
of the business
 it is the point of time the partners cease to carry on
the business together
WINDING UP
 the process settling business affairs after dissolution
TERMINATION
 the point in time after all the partnership affairs have
been wound up
RULE ON DISSOLUTION
* on dissolution the partnership is not terminated BUT
continues until the winding up of partnership affairs is
completed
*EFFECT on OBLIGATIONS
1. just because a partnership is dissolved this does
not necessarily mean that a partner can evade
previous obligations entered into by the
partnership
2. dissolution saves the former partners from new
obligations to which they have not expressly or
impliedly consented UNLESS the same be
essential for winding up
*CAUSES OF DISSOLUTION
1. without VIOLATION of the AGREEMENT
between the partners
A) TERMINATION of the DEFINITE TERM
or PARTICULAR UNDERTAKING
B) EXPRESS WILL or ANY PARTY in
GOOD FAITH (PARTNERSHIP by
WILL)
C) EXPRESS WILL of ALL of the
PARTNERS except those who have
(interests) ASSIGNED or whose
interests have been (separate debts)
CHARGED
D) EXPULSION in good faith of a member
2. in CONTRAVENTION of the agreement
between the partners
Page 12 of 16
 by the EXPRESS WILL of ANY PARTNER at
any time
3. UNLAWFULNESS of the BUSINESS
4. LOSS – thing promised
A) SPECIFIC THING – PERISHES before
delivery
B) USUFRUCT is lost EXCEPT if
ownership had been transferred to the
partnership
5. DEATH of ANY partner
6. INSOLVENCY of any partner or of the
partnership
7. CIVIL INTERDICTION of any partner
8. DECREE of COURT
*** if the cause is not justified or no cause was given,
the withdrawing partner is liable for DAMAGES BUT in
no case can he be compelled to remain in the firm
* the insolvency need not be judicially declared, it is
enough that the assets be less than the liabilities
DISSOLUTION by JUDICIAL DECREE WHEN
ALOWED:
(I, UM, I-PP, C, PB, BL, OC)
1. partner declared “insane” in any judicial
proceeding or is shown to be of UNSOUND
MIND
2. partner becomes INCAPABLE of performing his
part of the partnership contract
3. partner has been guilty of such CONDUCT as
tends to affect prejudicially the business
4. partners PERSISTENT BREACH of agreement
5. the business of the partnership can only be
denied on at a loss
6. other circumstances which render dissolution
equitable
IN CASE OF PURCHASER of PARTNERS INTEREST
1. after the termination of the specified term or
particular undertaking
2. AT ANY TIME, if the partnership was a
“partnership at will” when the interest was
assigned or when the charging ordered was
issued
* proof as to the existence of the firm must first be
given
* even if a partner has not yet been previously
declared insane by the court, dissolution may be asked,
as long as the insanity is duly proved in court
* in a suit for dissolution, the court may appoint a
RECEIVER at its discretion
Notes of hotjurist
in foro conscientiae

EFFECTS OF DISSOLUTION
RULE:
* when the firm is dissolved, a partner can no longer
bind the partnership
* a dissolved partnership still has the personality for
the winding up of its affairs
 the firm is still allowed to collect previously
acquired credits
 the firm is still bound to pay of its debts
DISSOLUTION CAUSED by A-I-D
RULE: (STILL BOUND) – as to each partners
G.R. where the dissolution is caused by the ACT,
INSOLVENCY or DEATH of a partner, each partner is
liable to his co-partners for his share of any liability
created by any partner acting for the partnership
EXCEPTION: - individual liabilities
1. if dissolution by ACT
 the partner acting for the partnership HAD
KNOWLEDGE of the dissolution OR
2. if dissolution by DEATH or INSOLVENCY
 the partner acting for the partnership HAD
“knowledge or notice” of the death or insolvency
* only the partner acting assumes liability
*AFTER DISSOLUTION, a partner can still “bind” the
PARTNERSHIP
(WU, UT, TB)
1. By any ACT appropriate for WINDING UP
partnership affairs
2. By COMPLETING transactions UNFINISHED at
dissolution
3. By any TRANSACTION which could bind the
partnership IF dissolution had not taken place
PROVIDED the other party is:
A) PREVIOUS CREDITOR and had NO
KNOWLEDGE or NOTICE of the
dissolution OR
B) NOT a PREVIOUS CREDITOR, had NO
KNOWLEDGE or NOTICE and
dissolution was NOT PUBLISHED
* if there was publication of the dissolution it is
presumed he already knows, regardless of actual
knowledge on non knowledge
WHEN is the PARTNERSHIP NOT BOUND
1. new business with third parties who are in bad
faith
2. firm dissolved because UNLAWFUL except for
acts of winding up
3. partner who acted became INSOLVENT
4. partner not authorized to wind up EXCEPT if
customer in good faith
Page 13 of 16
* if after dissolution, if a stranger will represent himself
as a partner although he is not one he will be a partner
by estoppel
RULE:
* the dissolution of the partnership does not itself
discharge the “existing liability” of any partner
 NEED for an AGREEMENT BETWEEN
1. partner concerned
2. other partners
3. creditors
RULE:
* the INDIVIDUAL PROPERTY of a DECEASED
PARTNER shall be liable for all obligations of the
partnership incurred while he was a partner BUT subject
to prior payments of his separate debts
* IF there be a NOVATION of the OLD
PARTNERSHIP DEBTS and such novation is done after
one of the partners has “retired” and without the consent
of such partner
 said partner cannot be held liable by creditors
who made the novation with knowledge of the firms
dissolution
EXTRAJUDUCIAL AND JUDICIAL WINDING-UP
EXTRAJUDICIAL:
1. by the partners who have not wrongfully
dissolved the partnership
2. by the legal representative of the last surviving
partners
JUDICIAL:
 under the control and direction of the court, upon
proper cause that is shown to the court
* profits that will actually enter the firm after dissolution
as a consequence of transactions already made before
dissolution are included because they are considered as
profits existing at the time of dissolution
* any other income earned after the time, like interest
or dividends on stock owned by the partners or
partnership at the time of dissolution should not be
distributed as profits BUT as merely additional income to
the capital
BETTER RIGHTS of INNOCENT PARTNERS
 innocent partners have better rights than guilty
partners and that the guilty partners are required to
indemnify for the damages caused
Notes of hotjurist
in foro conscientiae

* RIGHT of INOCENT PARTNERS TO CONTINUE the
BUSINESS
 in essence this is a new partnership
 can use the same firm name
 can ask new members to join
BUT shall: for protection of guilty partners
1. give a BOND approved by the court
2. to PAY guilty partners his interests at the time of
dissolution MINUS DAMAGES
* a guilty partner who is EXCLUDED will be
indemnified against all present or future partnership
liabilities
RIGHT TO GET CASH
 in case on non-continuance of the business, the
interest of the partner should if he desires be given in
cash
 assets may be sold
 a guilty partner, in ascertaining the value of his
interest is not entitled to a proportional share of the value
of GOOD WIL
RIGHTS OF INNOCENT PARTNERS IN CASE of
RESCISSION based on FRAUD AND
MISREPRESENTATION
1. Right to LIEN or RETENTION  SURPLUS
 CAPITAL
 ADVANCES
2. Right of SUBROGATION – as creditor
3. Right of INDEMNIFICATION
*ORDER of PAYMENT in WINDING-UP of
PARTNERSHIP LIABILITIES
GENERAL PARTNERSHIP: [C, R, C, P]
1. those owing to “creditors” other than partners
2. those owing to “partners” other than for capital
or profits – REIMBURSEMENTS
3. those owing to partners in respect to CAPITAL
4. those owing to partners in respect to PROFITS
* IF the partnership assets are insufficient, the other
partners must contribute more money or property
PREFERENCE with RESPECT to the ASSETS
1. regarding partnership property
 partnership creditors have preference
2. regarding individual properties of partners
 individual creditors are preferred
RULE if PARTNER is INSOLVENT
- How INDIVIDUAL PROPERTY is DISTRIBUTED
Page 14 of 16
ORDER OF PREFERENCE:
1. INDIVIDUAL or SEPARATE CREDITORS
2. PARTNERSHIP CREDITORS
3. those owing to other partners by way of
contribution
*When creditors of the dissolved partnership are
also creditors of the partnership continuing
business:
1. new partner is admitted without liquidation
2. a partner retires and assigns his rights IF the
business is continued without liquidation of the
partnership affairs
3. all but one partner retire without liquidation
4. when all partner assign their right to a person
who will assume their debt
5. after wrongful dissolution, remaining partners
continue the business without liquidation
6. when partner expelled and remaining partners
continue the business without liquidation
* liability of third person becoming a partner in the
partnership continuing the business to the creditors of
the dissolved partnership shall be satisfied out of the
partnership property ONLY
G.R. – when a partner retires, he is entitled what is due
him after liquidation BUT no liquidation is needed if there
is already a settlement at the date of dissolution
JURISPRUDENCE
BASTIDA vs. MENZI
* articles of association by which 2 or more persons
obligate themselves to place in a common fund any
property, industry, or any of these things, in order to
obtain profit, shall be COMMERCIAL
BORJA vs. ADDISON
* a surviving husband may form a partnership with the
heirs of the deceased wife for the management and
control of the community property
 BUT in the absence of the formalities prescribed by
the Civil Code, knowledge of the existence of the new
partnership or community of property must at least be
brought home to third persons dealing with the surviving
husband in regard to the community real property in
order to bind them by the community agreement
KIEL vs. SABERT
* the declarations of one partner, not made in the
presence of his co-partner, are not competent to prove
the existence of a partnership between them as against
such partner
* the existence of a partnership cannot be established
by general reputation, rumor or hearsay
Notes of hotjurist
in foro conscientiae

EVENGELISTA vs. C.I.R.
* By the contract of partnership 2 or more persons
bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing
the profits among themselves
ESSENTIAL ELEMENTS of a PARTNERSHIP
1. an agreement to CONTRIBUTE money,
property, or industry to a COMMON FUND
2. intent to divide the profits among the contracting
parties
* when our internal Revenue Code includes
“partnerships” among the entities subject to the tax on
“corporations”, said code which are not necessarily
“partnerships” in the technical sense of the term
* PARTNERSHIPS – includes a SYNDICATE,
GROUP, POOL, JOINT VENTURE, or other
unincorporated organization, through or by the means of
which any business, financial operation, or venture is
carried on
* a joint venture need not be undertaken in any of the
standard forms,
or in conformity with the usual requirements of the law
on partnerships, in order that one could be deemed
constituted for purposes of the TAX on corporations
PASCUAL vs. C.I.R.
* co-ownership or co-possession does not itself
establish a partnership, whether such co-owners or co-
possessors do or do not share any profits made by the
use of the property
* the sharing of gross returns does not itself establish
a partnership, within the persons sharing them have a
joint or common right or interest in any property from
which the returns are derived
* aside from the circumstances of profit, the presence
of other elements constituting partnership is necessary,
such as:
1. the clear intent to form a partnership
2. the existence of a juridical personality different
from that of the individual partners AND
3. the freedom to transfer or assign any interest in
the property by one with the consent of the
others
* an isolated transaction whereby 2 or more persons
contribute funds to buy certain real estate for profit in the
absence of other circumstances showing a contrary
intention cannot be considered a partnership
* persons who contribute property or funds for a
common enterprise and agree to share the gross returns
Page 15 of 16
of that enterprise in proportion to their contribution, BUT
who severally retain the title to their respective
contribution, are not thereby rendered partners
 they have no common stock or capital and no
community of interest as principal proprietors in the
business itself which the proceeds derived
* a joint purchase of land, by two does not constitute a
co-partnership in respect thereto, NOR does an
agreement to share the profits and losses on the sale of
land create a partnership
* in order to constitute a PARTNERSHIP INTER
SESE there must be:
A) an intent to form the same
B) generally participating in both profits and
losses AND
C) such a community of interest, as far as
third persons are concerned as enables
each party to make a contract, manage
the business, and dispose of the whole
property
* the common ownership of property does not itself
create a partnership between the owners, though they
may use it for the purpose of making gains AND they
may without becoming partners, agree among
themselves as to the management and use of such
property and the application of the proceeds therefrom
* the sharing of returns does not in itself establish a
partnership within the persons sharing therein have a
joint or common right or interest in the property
 there must be:
1. clear intent to form a partnership
2. the existence of a juridical personality different
from the individual partners AND
3. the freedom of each party to transfer or assign
the whole property
DUTERTE vs. RALLOS
* an agreement between 2 persons to operate a
cockpit, by which one is to contribute his services and
the other to provide the capital, the profits to be divided
between them, constitutes a partnership
DELUAO vs. CASTEEL
* a contract of partnership to exploit a fishpond
pending its award to any qualified party or applicant is
VALID BUT a contract of partnership to divide the
fishpond after such award is ILLEGAL
* one of the causes of dissolution is – any event which
make it unlawful for the business of the partnership to be
carried on or for the members to carry it on in
partnership
Notes of hotjurist
in foro conscientiae
 Page 16 of 16

C.I.R. vs. SUTER

* a UNIVERSAL PARTNERSHIP requires either that
the object of the association be:
1. all the present property of the partners as
contributed by them to the common fund
OR
2. all that the partners may acquire by their
industry or work during the existence of the
partnership

* the subsequent marriage of the partners could not

operate to dissolve the partnership because it is not one
of the causes provided for dissolution by law with
regards to limited partnerships

* partnership has distinct and separate personality

from that of its partners

* a husband and wife may not enter into a contract of

general co-partnership/ UNIVERSAL partnership

ACOAD vs. MABATO

* a 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

* A CONTRACT of PARTNERSHIP is VOID

 whenever immovable property is contributed
thereto, if “inventory” of said property is not made,
signed by the parties and attached to the public
instrument

EVANGELISTA vs. ABAD SANTOS

* an INDUSTRIAL PARTNER cannot engage in
BUSINESS FOR HIMSELF, UNLESS the partnership
expressly permits him to do so
 IF HE SHOULD DO SO, the capitalist partners may
either:
1. EXCLUDE him from the firm OR
2. AVAIL themselves of the benefits which he may
have obtained in violation of this provision
 with a right to DAMAGES in either case

* the prohibition against an industrial partner engaging

in business for himself seeks to prevent any conflict of
interest between the industrial partner and the
partnership and to ensure faithful compliance by said
partner with his prostation

Notes of hotjurist
in foro conscientiae