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1. Who is an associate?
Art 1804
He has no rights in relation to the partnership. He only has rights to his share of the profits from partners share who associated him.
As opposed to assignee who has rights to the partnership. (Art. 1813, PRIA; profits, remedies, receive interest of assignor, accounting from last date of account of partnership when it
is dissolved)
2. Can an associate be a new partner?
Yes, but requires the consent of all partners since it changes the terms of the partnership contract (art. 1814)
3. What are the rights of a new partner?
Property rights, art 1810 (SIP)
4. What is the liability of newly added partners?
Art. 1826
Existing contributions; limited only to contribution UNLESS there is a stipulation to the contrary
Subsequent contributions; extends to separate property
5. Dissolution of partnership
Art 1828, change in relation of the partners.
Caused by any partner ceasing to be associated in the carrying on of business
Ex. Death, retirement, withdrawal, addition of new partner
6. If a partnership is dissolved, can partners still enter into contract?
Generally yes, if it's related to the winding up of the partnership business.
If not related, his liability is personal.
7. What are the causes of dissolution?
Art. 1830 for acts in contravention and not in contravention of agreement; operation of law
Art. 1831 for decree of court
8. Situation beteeen luj and aika conducting funeral business. Red civic contributed, lost through fire, is partnership dissolved?
Art. 1830(4). Specific thing where a partner had PROMISED TO CONTRIBUTE THE USE AND ENJOYMENT, and perishes before delivery. Provided that ownership is retained by
partner.
If loss occurs after thing has beem contributed, partnership is not dissolved.WWW September 5, 2013 Consolidated
True or False, does loss of the thing which was promised to be contributed dissolves the partnership?
Loss of the thing dissolves the partnership if loss occurs BEFORE DELIVERY
Loss of the thing dissolves the partnership if loss occurs BEFORE OR AFTER DELIVERY
Reason is because the partner concerned is no longer able to fulfill his undertaking to the partnership
Art. 1831. On application by or for a partner the court shall decree a dissolution whenever:
(1)
(2)
(3)
(4)
(5)
(6)
A partner has been declared insane in any judicial proceeding or is shown to be of unsound mind;
A partner becomes in any other way incapable of performing his part of the partnership contract;
A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business;
A partner wilfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership
business that it is not reasonably practicable to carry on the business in partnership with him;
The business of the partnership can only be carried on at a loss;
Other circumstances render a dissolution equitable.
On the application of the purchaser of a partner's interest under Article 1813 or 1814:
(1)
(2)
No need
If the inability to deliver arose from loss, partnership is dissolved especially if it involves a specific thing.
Apply for a judicial decree when a conduct affect the partnership in a prejudicial manner.
Drunkenness will be prejudicial if it will affect adversely the performance of his obligation.
Insolvency?
-
Civil Interdiction?
-
It is an accessory penalty
o
Rights of the partner is limited. Partner is deprived of civil rights. He is civilly dead. In relation to partnership, he can no longer enter into contracts like
incurring obligations. He can no longer manage, dispose of his property. So, if additional contributions will be required, he can no longer make such
contribution because he no longer has any right to administer and dispose of his property.
Why would this dissolve the partnership? Why should the partnership suffer and the existence be affected when only the partner is suffering civil interdiction?
-
The property rights of the partner are affected and the partnership can no longer bind the partner suffering civil interdiction for any liability. The partner suffering civil
interdiction can no longer be liable for subsequent liabilities especially when the assets of the partnership are not enough. The partner suffering civil interdiction can no
longer convey his personal assets to answer for partnership liability thus he can no longer fulfill his obligation as a partner.
Once dissolution is declared, this would affect the partners themselves and third parties.
What is the effect among partners?
-
Once dissolution happens, the authority to bind the partnership ceases, except:
o
Dissolution is due the act of a partner, yet the acting partner has NO KNOWLEDGE
Dissolution is due to insolvency or death of a partner and the acting partner has NO KNOWLEDGE OR NOTICE
-
What is the effect of dissolution insofar as the third parties are concerned?
-
Inocencio knew that Dom is dead but entered into transaction with Tereso. What is the effect/status of the transaction?
*The transaction was valid and can hold the partnership liable. Although Inocencio had knowledge of death of partner Dom, WE HAVE TO PROTECT THIRD PERSONS
because Tereso was not aware of death. PARTNERSHIP IS BOUND, TERESO CAN COLLECT, but because of bad faith of Inocencio, Partnership can have a recourse
against Inocencio.
*On the other hand, if TERESO WAS AWARE OF SUCH DEATH, they cannot hold the partnership liable. Only Inocencio can be held liable.They were IN PARI DELICTO,
thus the law will leave them as it is.
(Ruling: if 3rd partyTereso was not aware, Partners of InocencioSTILL LIABLE but SUBJECT TO RECOURSE/REIMBURSEMENT FROM PARTNER IN BAD FAITH)
When it comes to Dissolution which is caused by any or some of the partners, how could this happen?
-
*(WCULDICD)
When it comes to Dissolution, what are some of the instances where dissolution is caused by one or some of the partners?
When a partner withdraws from the partnership, obligations of the partnership as to third persons have to be satisfied with the partnership assets.
Situation: Partnership X, Y and Z. They owe the creditor C P30million. C goes to Z and says dont worry I will not collect your share of the liability. He goes to X and Y and was only
able to collect P20million. So C goes back to X and says pay me 10million more. Can X refuse to pay the share of Z?
Yes. The condonation is binding because it is beneficial to the partnership. X and Y do not even have to agree. This is situation is not what the Law (Art. 1835) refers to.
Situation: Here is X, Y and Z. This time, it is now C who owes the partnership P30million. Now X and Y goes to C as partners representing the partnership and says pay us
P20million now and well call the whole debt quits. C now goes to Z to collect 10million. May C collect?
Since C is now the debtor of the partnership, the agreement between X, Y and C will not be binding on the partnership. (Apply Art. 1835)
ARTICLE 1835. The dissolution of the partnership does not of itself discharge the existing liability of any partner.
A partner is discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between himself, the partnership creditor and the
person or partnership continuing the business; and such agreement may be inferred from the course of dealing between the creditor having knowledge of the dissolution
and the person or partnership continuing the business.
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 the prior payment of his
separate debts. (n)
Who can be allowed to conduct the dissolution? (Persons authorized to wind up.)
1. Partners designated by the agreement.
2. Absence of agreement, all the partners who have not wrongfully dissolved the partnership.
3. Legal representative of the last surviving partner, not insolvent.
*Court in its discretion may appoint a receiver.
Going back to the previous example, can Z now conduct the dissolution process?
No. The partner who caused the dissolution is not allowed to conduct the dissolution. (Note: He is also not enumerated in Art. 1836)
To who do you think will the partnership be liable to when there is a dissolution? Who gets paid first?
Order of payment of liabilities
(2) The liabilities of the partnership shall rank in order of payment, as follows:
(a) Those owing to creditors other than partners,
(b) Those owing to partners other than for capital and profits,
(c) Those owing to partners in respect of capital,
(d) Those owing to partners in respect of profits.
1.
2.
1.
2.
3.
3.
Art. 1838. Where a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties
thereto, the party entitled to rescind is, without prejudice to any other right, entitled:
(1) To a lien on, or right of retention of, the surplus of the partnership property after satisfying the partnership liabilities to
third persons for any sum of money paid by him for the purchase of an interest in the partnership and for any capital or
advances contributed by him;
(2) To stand, after all liabilities to third persons have been satisfied, in the place of the creditors of the partnership for any
payments made by him in respect of the partnership liabilities; and
(3) To be indemnified by the person guilty of the fraud or making the representation against all debts and liabilities of the
partnership. (n)
An innocent partner who was induced to join a partnership by fraud or misrepresentation is to have the partnership contract rescinded. His rights are:
The innocent partner has preference over the surplus of the partnership property for money paid by him for his interest in the partnership and any capital or
advances contributed by him
The innocent partner steps into the shoes of the partnership creditor so he can go after the partner guilty of fraud / misrepresentation for reimbursement of
any payments he made to satisfy partnership liabilities
Subrogation is a form of novation where, in this instance, there is a change in the person of the creditor
Subrogation can either be real (change in subject matter) or personal (change in creditor / debtor)
4.
5.
6.
Right to receive damages / reimbursed by the guilty partner for his fraud or misrepresentation against all debts and liabilities of the partnership
Art. 1843. A limited partnership is one formed by two or more persons under the provisions of the following article, having
as members one or more general partners and one or more limited partners. The limited partners as such shall not be
bound by the obligations of the partnership.
A partnership formed by two or more persons having as members one or more general partners and one or more limited partners
Generally, no, but there are instances a limited partner may be liable as a general partner such as:
1.
When the name of the limited partner is included in the firm name
2.
If a limited partner is liable as a general partner, his liability extends to his personal assets
7.
False!
Because an industrial partner is a general partner, limited partners cannot contribute industry to the partnership. He can only
contribute money or property
Art. 1845. The contributions of a limited partner may be cash or property, but not services.
8.
Can a person be both a general partner and a limited partner at the same time?
9.
Yes
Art. 1853. A person may be a general partner and a limited partner in the same partnership at the same time, provided that
this fact shall be stated in the certificate provided for in Article 1844.
A person who is a general, and also at the same time a limited partner, shall have all the rights and powers and be subject
to all the restrictions of a general partner; except that, in respect to his contribution, he shall have the rights against the
other members which he would have had if he were not also a general partner.
A limited partner can be a general partner at the same time. He can be both in the sense that he can exercise the rights and
powers of a general partner, but his liabilities remain as that of a limited partner (extends only to his contribution)
Such fact must be stated in the certificate / articles of limited partnership, signed, sworn to, and filed in the SEC
In the list of partners, A B & C contributed 10k each, and in their articles of partnership they stated that C is both a limited and general
partner, signed, sworn to, and certified by the SEC, will that be enough? If only A opted to be a limited and general partner, what
advantage does he have over B and C?
Limited and general partner (1 person ni ha) can recover from general partners the amount he paid to such
third persons. (in excess of his contribution)
And in settling of accounts after dissolution, he shall have priority over general partners in the return of their
respective contributions
Aside from receiving his interest, he has the right to specific partnership property, and to participate in management
Can contribute industry?
rights and powers of a general partner
extent of liability
order of preference in distribution of partnership assets
among limited partners, they can enjoy preferences or priorities of payment (art. 1855)
one can enjoy more profits
insofar as third parties are concerned, his being a general partner does not make him less liable even if he is at the same time a limited partner
o
he will always be considered a general partner
o
does not enjoy reduced risk
What are instances where a limited partner can be liable as a general partner?
-
contributes service
surname is included in firm name
participates in management
fails to comply with legal requirements in formation of limited partnerships
Obeso was hired as legal counsel (limited partner), and from time to time her employer would ask questions from her. Manager asked her recommendations about what
he did to an unruly employee (fired and said I dont want to see you by tomorrow). Do we have a problem here?
If dismissal was constructive, as a limited partner, can NLRC go after your personal property?
-
If obesos actions were merely recommendatory, then NLRC cannot go after her personal property since she is not considered as a general partner but only as a limited
partner
If expressly granted in articles of limited partnership OR with the consent of all partners (limited and general)
art 1850
(1) Do any act in contravention of the certificate;
(2) Do any act which would make it impossible to carry on the ordinary business of the partnership;
(4) Possess partnership property, or assign their rights in specific partnership property, for other than a partnership purpose;
(6) Admit a person as a limited partner, unless the right so to do is given in the certificate;
(7) Continue the business with partnership property on the death, retirement, insanity, civil interdiction or insolvency of a general partner, unless the right so
to do is given in the certificate.
what are the rights of a limited partner similar to that of a general partner?
-
art 1851
(1) Have the partnership books kept at the principal place of business of the partnership, and at a reasonable hour to inspect and copy any of them;
(2) Have on demand true and full information of all things affecting the partnership, and a formal account of partnership affairs whenever circumstances
render it just and reasonable; and
absolute prohibition
o
capital partner
relative prohibition, prohibited only in engaging in business that is competitive with the partnership business
yes, but his prohibition is only relative. Because as a general partner, he is a capital partner since if his contribution is MONEY OR PROPERTY
o
prohibition only extends to engaging in business that is competitive to the partnership business
Can a limited partner extend loans to the partnership or engage in business with the partnership?
Art. 1854. A limited partner also may loan money to and transact other business with the partnership, and, unless he is also a general partner, receive on account of
resulting claims against the partnership, with general creditors, a pro rata share of the assets. No limited partner shall in respect to any such claim:
(1) Receive or hold as collateral security and partnership property, or
(2) Receive from a general partner or the partnership any payment, conveyance, or release from liability if at the time the assets of the partnership are not
sufficient to discharge partnership liabilities to persons not claiming as general or limited partners.
yes, a limited partner can extend loans or engage in business but his rights are limited as opposed to 3 rd persons who perform the same activities
his prohibitions are:
o
this prohibition is absolute, since it results to an undue advantage because of natural tendency of the partners to give preference to each other
Reason for the law: when you hold a collateral, such creditor have a bigger advantage over other creditors whether the loans were extended
before or after other creditors. As a limited partner, the law doesnt want to give the advantage over third party creditors
receive from a general partner or the partnership any payment, conveyance, or release from liability
Prohibition is relative, only if the assets are not enough to discharge liabilities to third parties since the proviso is only written in item number 2
under Art 1854.
when a limited partnership is dissolved, who can claim against the partnership?
-
art. 1863
(1) Those to creditors, in the order of priority as provided by law, except those to limited partners on account of their contributions, and to general partners;
(2) Those to limited partners in respect to their share of the profits and other compensation by way of income on their contributions;
(4) Those to general partners other than for capital and profits;
So far as limited partners are concerns, what could be the nature of their shares?
-
Instances where the limited partner can demand for their contribution:
- limited partner may rightfully demand the return of his contribution:
(1) On the dissolution of a partnership; or
(2) When the date specified in the certificate for its return has arrived, or
(3) After he has six months' notice in writing to all other members, if no time is specified in the certificate, either for the return of the contribution or for the
dissolution of the partnership.
-
PROVIDED:
o
Art. 1857
(2) The other liabilities of the partnership have not been paid, or the partnership property is insufficient for their payment as required by the first paragraph,
No. 1, and the limited partner would otherwise be entitled to the return of his contribution.
Now that the limited partner is entitled to the return of his contributions, it might involve an accounting. He shall not be given all that he is asking but he shall be required to settle what
he owes the partnership. What shall the partner owe the partnership?
-
Pay the difference between his contribution as actually made and that stated in the certificate
2.
3.
2.
if the assignor, being thereunto empowered by the certificate, gives the assignee that right.
An assignee becomes a substituted limited partner when the certificate is appropriately amended in accordance with Article 1865.
Does a substituted limited partner acquire all the rights and liabilities of a limited partner?
Yes. The substituted limited partner has all the rights and powers, and is subject to all the restrictions and liabilities of his assignor, except those liabilities of which he was ignorant at
the time he became a limited partner and which could not be ascertained from the certificate.
Who is a contributor?
Hes a limited partner. The same.
paper exam dayon.
WWW September 14, 2013
1.
Yes, the limited partner can actually lend money to the partnership
o
Art. 1854. A limited partner also may loan money to and transact other business with the partnership, and, unless he is also a general partner, receive on
account of resulting claims against the partnership, with general creditors, a pro rata share of the assets. No limited partner shall in respect to any such
claim:
2.
(1)
(2)
Receive from a general partner or the partnership any payment, conveyance, or release from liability if at the time the assets of the partnership are not
sufficient to discharge partnership liabilities to persons not claiming as general or limited partners.
Yes, but as distinguished to interest of a general partner subject to a charging order, the following are different:
Art. 1862. On due application to a court of competent jurisdiction by any creditor of a limited partner, the court may charge the interest of the indebted limited
partner with payment of the unsatisfied amount of such claim, and may appoint a receiver, and make all other orders, directions and inquiries which the
circumstances of the case may require.
The interest may be redeemed with the separate property of any general partner, but may not be redeemed with partnership property.
The remedies conferred by the first paragraph shall not be deemed exclusive of others which may exist.
Nothing in this Chapter shall be held to deprive a limited partner of his statutory exemption.
3.
As to limited partner
As to general partner
What can the person applying for the charging order entitled to?
-
the applicant can receive the interest of the limited partner subject to a charging order
4.
5.
because a limited partners liability is only limited to his contribution, he has nothing to do with the assets and the obligations of the partnership
Once dissolution happens to the partnership, who may be the claimants to the partnership assets?
-
Art. 1863. In setting accounts after dissolution the liabilities of the partnership shall be entitled to payment in the following order:
(1)
(2)
(3)
(4)
(5)
(6)
Those to creditors, in the order of priority as provided by law, except those to limited partners on account of their contributions, and to general
partners;
Those to limited partners in respect to their share of the profits and other compensation by way of income on their contributions;
Those to limited partners in respect to the capital of their contributions;
Those to general partners other than for capital and profits;
Those to general partners in respect to profits;
Those to general partners in respect to capital.
Subject to any statement in the certificate or to subsequent agreement, limited partners share in the partnership assets in respect to their claims for capital,
and in respect to their claims for profits or for compensation by way of income on their contribution respectively, in proportion to the respective amounts of
such claims.
-
6.
Order of preference
(1) third party creditors
(2) limited partners other than profits and contributions
(3) limited partners as to profits
(4) limited partners as to contributions
(5) general partners other than profits and contributions
(6) general partners as to profits
(7) general partners as to contributions
For the difference between his contribution as actually made and that stated in the certificate as having been made; and
For any unpaid contribution which he agreed in the certificate to make in the future at the time and on the conditions stated in the certificate.
Specific property stated in the certificate as contributed by him, but which was not contributed or which has been wrongfully returned, and
2.
Money or other property wrongfully paid or conveyed to him on account of his contribution.
The liabilities of a limited partner as set forth in this article can be waived or compromised only by the consent of all members; but a waiver or compromise
shall not affect the right of a creditor of a partnership who extended credit or whose claim arose after the filing and before a cancellation or amendment of the
certificate, to enforce such liabilities.
When a contributor has rightfully received the return in whole or in part of the capital of his contribution, he is nevertheless liable to the partnership for any
sum, not in excess of such return with interest, necessary to discharge its liabilities to all creditors who extended credit or whose claims arose before such
return.
-
Therefore, the limited partner may be liable to the limited partnership for the following:
(1)
(2)
(3)
(4)
(5)
(6)
7.
All that is due from him will be deducted in order to determine the interest of the limited partner in the partnership
After the claims of the 3rd party creditors and limited partners are settled, what happens next?
-
8. How do we distinguish the limited partner, assignee, associate, substituted limited partner, contributor
-
Limited partner
Assignee
Associate
Contributor
He is a limited partner
If based solely in the definition, he can be considered as an agent since the definition provided by law is too broad any person who represents another person.
However, agency in the strict sense, the agent should do a juridical act with third persons that would bind the principal.
Elements of Agency:
Consent
-
Principal is guilty of estoppel when he failed to repudiate the act of the agent in excess of his authority.
Necessity
Ward has no control over the acts of the guardian; Principal manages control over the agent
Guardian does not require consent from the Ward; Agent requires consent from the principal
Administrator vs Agent?
Administrator settles the estate of the deceased; Agent represents the principal
Versoza needed some cash to buy a laptop. He asked his 10- year old neighbor to sell his laptop for 5000. The minor was able to sell only at 500. Can Versoza get back
his laptop on the ground that the agent was a minor?
-
Versoza cannot recover the laptop since in the contract of agency, the requirement of capacity is vested on the principal and not on the agent. The minor can validly sell
the laptop and bind Versoza of such act.
Was the agency agreement between Versoza and the minor valid?
-
The sale was valid since strictly speaking the parties were Versoza and the Third Party.
Reversed Situation: Versoza was authorized by the minor to sell the laptop. Versoza only sold the it for 500. The parents wanted to get back the laptop. What do you think?
-
Versoza cannot validly sell the laptop since the contract of agency is void since the principal had no capacity. The parents can get back the laptop.
(clue: we look at the first contract [agency] W/N void, in order to determine the validity of the second contract [sale])
4. Unilateral if it is gratuitous because it creates obligation for only on the parties (agent); Bilateral if it is for a compensation because it gives rise to reciprocal rights
and obligations
5. Preparatory it is entered into as a means to an end (the creation of other transactions or contracts
It cannot be presumed since the fact of its existence must be shown. Maybe the other person just didnt want to embarrass the principal.
2.
3.
4.
5.
Conveyance of Pasatiempo to Medequiso through SMS: I am appointing you to sell my property in a specific location. Are you now an agent if you do not reply?
Additional information: There was a 5% commission and the Medequiso was able to sell the land. She went to Pasatiempo to get the commission. Pasatiempo denied giving
the commission since Medequiso did not reply.
Will Medequiso be entitled?
-
If she did not reply, she will not be entitled if Medequiso was not engaged in the business which she is habitually engaged as an agent.
If she is habitually engaged, she will be an agent even if she did not reply.
Art. 1872. Between persons who are absent, the acceptance of the agency cannot be implied from the silence of the agent, except:
(1) When the principal transmits his power of attorney to the agent, who receives it without any objection;
(2) When the principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent,
and he did not reply to the letter or telegram. (n)
2.
when the agent (1) acts in behalf of the principal and (2) within the scope of his authority, and (3) discloses his principal
if in excess of authority
o
if principal ratifies
o
is in estoppel
o
when act of agent is advantageous to the principal
o
when the principals property is involved
o
emergency
o
necessity
o
a blank instrument
3.
one day, mr. blanco issued to ms. Otero a blank check but was not signed, ms. Otero cashed the check for 100k. When confronted by the bank, Mr. Blanco
said to honor the check and admitted that it was his. Can Mr. Blanco demand recovery?
No, because Mr. Blanco ratified the act of Ms. Otero of encashing the check
4.
promissory note
o
maker and payee
5.
In the previous situation, if Ms. Otero had instead a promissory note for 100k and went to Mr. Amores, where the latter verified with Mr. Blanco and said that
he will pay provided that he pays in installments. When Mr. Amores comes to collect to Mr. Blanco, is Mr. Blanco liable?
6.
no, since you have to perform your act strictly in accordance with the authority granted
7.
If you are authorized to buy, can the agent sell his own lot?
8.
If the agent were authorized to sell the property of the principal, can the agent buy the property?
9.
if express
oral
in writing
10.
no
11.
although at first it is advantageous, it would be more dangerous in the long run since the mortgagee might be unable to pay
12.
no, because the authority to mortgage is different from the authority to sell because the authority to sell is an act of strict dominion
since sale totally deprives the principal of the property and is more onerous to the principal
-
13.
One day, a friend of Ms. Baya, who was in a hurry to leave, decided to leave with her 2 truckloads of mango fruits that were just harvested. She was called up
to inform her, and the fruits were unloaded in her backyard. If the mangoes arent sold within two days, they would spoil. What can Baya do?
art. 1885
o
in case a person declines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods
forwarded to him by the owner until the latter should appoint and agent. The owner shall as soon as practicable either appoint an agent or take charge of
the goods
declining person need not go beyond ordinary diligence, the person who declined agency is not obligated to put his life on hold on account for the preservation and
custody of the goods.
14.
Another friend of Ms. Baya wanted her to sell a piece of land located in Santander where she had to be there at 6 A.M. to meet the buyer and take the first
available means of transportation. At 3 A.M. a tartanilla arrives, should Ms. Baya take it since it is the first means of transportation?
15.
If Ms. Olvis, as agent of a Principal, wanted her to sell a Mercedes Benz for 10k. But then the principal gave her instructions to sell for not less than 10k. If
Olvis sold the car at 8k, can the owner recover the car sold by Olvis?
No, since the sale is valid and binding between the principal and the 3rd person.
The 3rd person is not bound by the secret instruction between Olvis and the owner.
The owner, however, can recover from the agent the difference of the selling price of P2,000.00 by failing to follow the instructions
16.
In the previous example, why isnt Ms. Baya liable for damages for not following the instructions of the principal?
because if Baya followed the instructions, it would manifestly result in loss or damage to the principal (Art. 1888)
as distinguished with number 15, Olvis would be liable since failure to follow resulted in loss or damage to the principal
17.
18.
Ms. Lao was a fish vendor, her friend felt sick and asked her if she could sell his fish for her, should Law sell her friends fish first?
19.
You were asked by your principal to sell land and says give 100k if he is able to sell. Lim sold property for 1M but only gave 900k to his principal considering
his commission Should Lim have given to his principal the entire amount first?
20.
If Jessa was an agent, and buyer was impressed with her performance that she was given a bonus of 50k. When Jessa delivered the 1M and demanded her
commission of 100k, the principal only gave her 50k. Can Jessa demand the difference?
no, Art. 1891, the agent should render a full accounting and give the principal a full disclosure of what he received by virtue of the partnership. The 50k bonus from the
buyer, then, should have been given to the principal first.
21.
a substituted agent is a person to whom the agent delegates, as his agent, the performance of an act for the principal which the agent has been empowered to perform
through his representative
Art. 1892
The agent may appoint a substitute if the principal has not prohibited him from doing so; but he shall be responsible for the acts of the substitute:
(1)
(2)
all acts of the substitute appointed against the prohibition of the principal shall be void.
22.
when is the agent not liable for the acts for the sub-agent?
False
Article 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he shall be responsible for the acts of the
substitute:
(1) When he was not given the power to appoint one;
(2) When he was given such power, but without designating the person, and the person appointed was notoriously incompetent or insolvent.
All acts of the substitute appointed against the prohibition of the principal shall be void. (1721)
2.
Agent is bound
1.
2.
3.
2.
3.
Principal gave authority, but did not designate, and the agent appointed a sub-agent who is NOT notoriously incompetent or insolvent
Agent acted within the scope of his authority
3.
it would depend upon whom the sub-agent has his powers of authority from
if he gets his instructions from the agent, then he is a stranger or 3rd party to the contract of agency between agent and principal
if he gets his instructions from the principal, then the sub-agent will be an agent of the principal
4.
5.
If two or more agents are appointed, what is the nature of their liability?
6.
Can the principal sue the sub-agent based on the agreement between the agent and the sub-agent?
YES, the principal can sue based on the agreement even if he is not party to the contract. This is an exception to the principle of privity of contracts
7.
Only parties to the contract are bound by it. Strangers to the contract cant be bound by it
8.
this is practically a summary of chapter 2, see pp. 451-452; Atty. Only asked ANYTHING YOU COULD REMEMBER. So you probably dont have to remember everything.
1.
2.
answer for damages which through his performance the principal may suffer
3.
finish the business already begun on the death of the principal should delay entail any danger
4.
observe diligence of a good father of a family in the custody and preservation of goods forwarded to him when he declines an agency
5.
6.
to act in accordance with the instructions of the principal, and in default thereof, to do all that a good father of a family would do
7.
not to carry out the agency if its execution would manifestly result in loss or damage to the principal
8.
to answer for damages if there being a conflict between his interests and those of the principal, he should prefer his own
9.
10.
to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency
11.
distinguish goods by countermarks and designate the merchandise respectively belonging to each principal, in the case of a commission agent who handles
goods of the same kind and mark, which belong to different owners
12.
to be responsible in certain cases for the acts of the substitute appointed by him
13.
14.
to inform the principal, where an authorized sale of credit has been made, of such sale
15.
to bear the risk of collection, should he receive also on a sale, a guarantee commission
16.
to indemnify the principal for damages for his failure to collect the credits of his principal at the time that they become due
17.
9.
10.
the commission agent takes possession of the property of the principal to sell
the ordinary agent, on the other hand, does not necessarily take possession of the property of the principal to carry out his duties
11.
12.
If the commission agent doesnt sell in cash, what can the principal do?
Unless there is a stipulation to the contrary, the principal can demand from the commission agent the entire amount as if the sale was made in cash
Article 1905. The commission agent cannot, without the express or implied consent of the principal, sell on credit. Should he do so, the principal may demand
from him payment in cash, but the commission agent shall be entitled to any interest or benefit, which may result from such sale. (n)
13.
the commission agent should inform the principal of such sale on credit, and furnish him with a statement of the names of the buyers
Article 1906. Should the commission agent, with authority of the principal, sell on credit, he shall so inform the principal, with a statement of the names of the
buyers. Should he fail to do so, the sale shall be deemed to have been made for cash insofar as the principal is concerned. (n)
1.
can a commission agent who is employed by a principal, engage to be an agent of other principal/s?
if there were 5 farmers, both having 20 truckloads of rice, can the commission agent engage all 5 farmers?
-yes, if principals consent, provided agent countermarks the said goods.
2.
3.
Custom
Special laws
If 10 farmers bring each 10 sacks equals 100 sacks. Buyer from city bought 20 sacks. Which of the farmers can collect?
5.
does not guarantee success. Only required to exercise due diligence. Liable for damages in case of agents negligence.
6.
considering that a commission agent does not guarantee success, can a commission agent demand for his commission even if there was an unsuccessful sale?
-
No, see page 394, a broker is never entitled to commission for unsuccessful efforts
Compensation, therefore, is dependent on success
The commission agent does not guarantee success
However, the guarantee commission guarantees success
7.
Summary:
Commission Agent, as to liability for damages, does not guarantee success, only due diligence required.
Commission Agent, as to entitlement for compensation, must be successful.
8.
here is a principal, authorized his agent to sell a parcel of land. Diligently, he goes the extra mile. One day, he was approached by a potential buyer, but his child
was sick with a very high fever. The agent, tried to cure the sick child with traditional medicine (TUTHO). The child died. Is the principal liable for the acts of the
agent?
-
9.
if the agent, instead, brought the child to the hospital. And as a result, the agent had to pay a deposit for such admission. Can the agent demand
reimbursement?
yes, but atty. Did not continue with this line of questioning
10.
If you were an agent of a principal who wanted to sell a parcel of land, but there were squatters living there, you opened fire on the squatters with your
armalite. When the heirs claim for damages, is the principal liable?
11.
If you were an agent selling jewelry, and a burglar poked a gun at you, and you fought back and eventually killed the burglar, is the principal liable?
12.
for tort liability, the principal is not bound of the acts of the agent constitute an extreme deviation from the normal conduct of such an employee
13.
when the same agent finally was able to sell the parcel of land, he celebrated in the beach with food and drinks. On his was home, the agent hit a pedestrian
with his car. Is the principal liable?
no, because this was no longer connected with the contract of agency.
14.
if there is more than one principal, what is the nature of their liability?
15.
16.
If you were authorized by a principal to sell a parcel of land, the principal however sold the parcel to another buyer without notifying the agent. Subsequently,
the agent was able to sell it to another person. Which of the buyers is entitled to the parcel of land?
if registered at the same time, first took possession of the property in good faith
if possession at the same time, buyer who could present oldest title in good faith
ART. 1916. When two persons contract with regard to the same thing, one of them with the agent and the other with the principal, and the two contracts are
incompatible with each other, that of prior date shall be preferred, without prejudice to the provisions of Art. 1544.
17.
In double sale, what can the buyer do if his contract was rejected?
depends on whom among the agent and principal acted in bad faith
ART. 1917 In the case referred to in the preceding article (1916), if the agent has acted in good faith, the principal shall be liable in damages to the third person
whose contract must be rejected. If the agent acted in bad faith, he alone shall be responsible.
18.
if the principal himself made the sale, what is its effect to the contract of agency?
19.
if the agent had knowledge, he should not have continued with the sale
20.
if the agent, instead, brought the child to the hospital. And as a result, the agent had to pay a deposit for such admission. Can the agent demand
reimbursement?
yes, the agent can demand reimbursement for advances made provided the agent was free from fault
21.
if in bringing the sick boy to the hospital, the agent, who was drunk, hit a pedestrian on his way home, can the agent demand reimbursement from the
principal for the expenses incurred because of the accident?
Art 1918(2), When the expenses were due to the fault of the agent
22.
under what circumstances may the principal be free from reimbursing the agent?
(1)
if the agent acted in contravention of the principals instructions, unless the latter should with to avail himself of the benefits derived from the contract
(2)
(3)
when the agent incurred them with the knowledge that an unfavorable result would ensue, if the principal was not aware thereof
(4)
when it was stipulated that the expenses would be borne by the agent, or that the latter would be allowed only a certain sum
23.
Revocation
Withdrawal of the agent
Death, civil interdiction, insolvency, or insanity of the principal or of the agent
Dissolution of the firm or corporation which entrusted or accepted the agency
By the accomplishment of the object or purpose of the agency
By the expiration of the period for which the agency was constituted
24.
when is a principal bound by the acts of the agent who acted beyond the scope of the authority?
by ratification
o
ratification is where the principal adopts a prior act of the agent which was originally done beyond the scope of his authority
25.
if a check was encashed by an agent of albete valued at 100k, but the agent altered the check and made the amount to 1M. Albete, when asked by the bank
about the amount, Albete asked if it could just be 500k instead. Is there ratification?
yes, there is only partial, however it is not enough to cure the defect
what the law requires for a valid ratification is a TOTAL RATIFICATION
26.
27.
28.
Continue to act in order to give the principal (RO TNS TMS) Reasonable Opportunity To Take Necessary Steps To Meet the Situation
PERIOD: even if the subject matter or purpose is not accomplished, as long as the period has ended.
REVOCATION: by principal, may be express or implied.
Implied if: 1. Employs agent whose functions are inconsistent with the prior agent
2. Principal directly manages the business
DEATH: of either party extinguishes the agency, except:
1. Agency coupled with interest
Art. 1927. An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted, or if a partner is appointed
manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. (n)
2. Stipulation pour autrui (stipulation in favor of third person)
Stipulation 403 can be revoked, but if 3rd person already accepted then it cant be revoked.
3. Death of principal without knowledge of agent and- third party in good faith
Death of principal Ps heirs have no duty to notify Agent
Death of agent As heirs have the duty to notify Principal