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condition:
partnership obligation
a) dead partner
1) entered in the firm name, under its signature
b) no more partnership assets
2) by a person authorized (ex: employee)
(1) Where one partner acting within the scope of his PARTNERSHIP BY ESTOPPEL
apparent authority receives money or property of a
third person and misapplies it; and
liability
(2) Where the partnership in the course of its business - liable as a partner: pro rata and subsidiary
receives money or property of a third person and the ONLY WHEN it results in a partnership liability
money or property so received is misapplied by any There is partnership liability when all the partners
partner while it is in the custody of the partnership. (n) consent to the representation
Subject to contrary agreement, express or implied, Art. 1810. The property rights of a partner are:
the partnership books belong to all partners and (1) His rights in specific partnership property;
each one of them has equal rights thereto. (2) His interest in the partnership; and
Every partner has the right, at any reasonable (3) His right to participate in the management. (n)
hour to have access to and inspect and copy any of
said books. 1. To possess specific partnership property
reasonable hour any reasonable hour on
business days throughout the year, and not merely Art. 1811. A partner is co-owner with his partners of
during some arbitrary period of a few days chosen specific partnership property.
by some or one of the partners.
The right in this Article is granted to enable the The incidents of this co-ownership are such that:
partner to obtain true and full information of the (1) A partner, subject to the provisions of this Title and
partnership affairs, for after all, he is a co-owner of to any agreement between the partners, has an equal
the properties, including the books. right with his partners to possess specific partnership
property for partnership purposes; but he has no right
to possess such property for any other purpose without
the consent of his partners;
C. To have a formal account (2) A partner's right in specific partnership property is
not assignable except in connection with the
Art. 1809. Any partner shall have the right to a formal assignment of rights of all the partners in the same
account as to partnership affairs: property;
(1) If he is wrongfully excluded from the partnership (3) A partner's right in specific partnership property is
business or possession of its property by his co- not subject to attachment or execution, except on a
partners; claim against the partnership. When partnership
(2) If the right exists under the terms of any agreement; property is attached for a partnership debt the
partners, or any of them, or the representatives of a
deceased partner, cannot claim any right under the 2. To convey partnership interest
homestead or exemption laws;
(4) A partner's right in specific partnership property is Art. 1812. A partner's interest in the partnership is
not subject to legal support under Article 291. (n) his share of the profits and surplus. (n)
Each partner has been said to be possessed of a Profit the gain realized from the business or
joint interest in the whole of partnership property, investment over and above expenditures or the
but does not own individually any particular article excess of the value of returns over the value of
or any separate part or aliquot part thereof. advances.
(1) The right of equal possession includes use and Surplus- the excess of assets over liabilities; simply
control, including the power of sale and what is left of the assets of a firm after all its
disposition, such as applying partnership property liabilities have been satisfied.
to partnership debts, even without the consent of The interest of the partner in the partnership has
the other partners. It is however subject to several been otherwise described as the net balance
limitations. remaining to him; after all partnership debts or
One limitation: extends only to partnership claims against it have been paid and the equities
purposes. He has no right to possess it for any and accounts between such partner and his
other purpose without the consent of his partners. copartners have been adjusted.
If he does, he is accountable for the value of such Unlike his rights in specific partnership property, a
use as well as for any profits he may have derived partners interest in the partnership is assignable
therefrom. If he converts partnership money to his irrespective of the consent of the other partners.
own use, he shall be liable not only for the amount It may be reached by the partners separate
converted but also for interest and damages from creditors by means of a charging order and the
the time of such conversion. other remedies specified in Art 1814. And the
(2) This rule obtains even if the assignment is partner can, with respect to it, claim rights under
made after dissolution of the partnership but the exemption laws.
before its termination by the completion of the
winding up of its business. Art. 1813. A conveyance by a partner of his whole
Any separate assignment of such right, or any interest in the partnership does not of itself dissolve
attempt at such assignment is null and void, the partnership, or, as against the other partners in
except when real property is involved and the the absence of agreement, entitle the assignee, during
provisions of Art 1819 relative to the interest of an the continuance of the partnership, to interfere in the
innocent purchaser apply. management or administration of the partnership
If the law recognized the right of a partner to business or affairs, or to require any information or
assign his right in particular partnership property account of partnership transactions, or to inspect the
to a third person, the assignee would pro tanto partnership books; but it merely entitles the assignee
become a partner, since he would have the right to to receive in accordance with his contract the profits to
possess the property for partnership purposes which the assigning partner would otherwise be
irrespective of the desires of the other partners. entitled. However, in case of fraud in the management
But partnership is a voluntary relation, and the of the partnership, the assignee may avail himself of
other partners cannot have a new partner thrust the usual remedies.
upon them without their consent.
(3) A partners interest in specific property of the In case of a dissolution of the partnership, the assignee
firm is taken out of the reach of his individual is entitled to receive his assignor's interest and may
creditors. require an account from the date only of the last
While a partners right in specific partnership account agreed to by all the partners. (n)
property may not be attached, executed upon, or
garnished by his separate creditors, partnership If partner conveys (assigns, sells, donates) his
creditors may do so. WHOLE interest in the partnership (his share in
(4) This incident follows from the nature of such the profits and surplus), the partnership remains,
right and the basic policy of the law to keep intact in general.
partnership property for creditors and for WoN a dissolution results from the assignment
partnership purposes. depends on its nature as much as on the intent or
A partner has no personal property in any specific agreement of the parties, as may be gathered from
property of the partnership, and he has no right to the original partnership agreement, the written
possess or use it except for a partnership purpose. assignment, or from their subsequent conduct.
The assignee does not necessarily become a (2) At any time if the partnership was a partnership at
partner. The assignor is still the partner, with a will when the interest was assigned or when the
right to demand accounting and settlement. charging order was issued. (n)
Rights of assignee: (5) loss means operating loss for an extended
o To get whatever profits the assignor-partner period of time
would have obtained.
o To avail himself of the usual remedies in case of Dan Fue Leung v. IAC
fraud in the management. Arts. 1806-1809 show that the right to demand an
o To ask for annulment of the contract of accounting exists as long as the partnership exists.
assignment if he was induced to enter it thru any Partnership begins to run only upon the dissolution of
of the vices of consent or if he himself was the partnership when the final accounting is done.
incapacitated to give consent.
o To demand accounting but only if indeed the
US v. Clarin supra
partnership is dissolved, but even then, the
account can cover the period only from the date
Emnace v. CA
of the last accounting which has been agreed to
by all the partners. Action for accounting, payment of partnership shares,
division of assets and damages is a personal action
o Assignee can demand dissolution of the
which may be commenced and tried where the
partnership when the partnership has become a
defendant resides or may be found, or where the
partnership at will.
plaintiffs reside, at the election of the latter.
If an action is against a partner, on the basis of his
E. To ask for dissolution
personal liability, it is an action in personam, and the
fact that two of the assets of the partnership are
Art. 1830. Dissolution is caused: [xxx]
parcels of land does not materially change the nature
(2) In contravention of the agreement between the
of the action.
partners, where the circumstances do not permit a
dissolution under any other provision of this article, by
The heirs, as successors who stepped into the shoes of
the express will of any partner at any time;
their decedent upon his death, can bring an action for
Art. 1831. On application by or for a partner the court
accounting originally pertaining to the decedent. This
shall decree a dissolution whenever: right is transmitted by law. The heirs are complainants
in their own right as successors.
(1) A partner has been declared insane in any judicial
proceeding or is shown to be of unsound mind; For as long as the partnership exists, any of the
partners may demand an accounting of the
(2) A partner becomes in any other way incapable of partnerships business, and prescription of the said
performing his part of the partnership contract; right starts to run only upon the dissolution of the
partnership when the final accounting is done.
(3) A partner has been guilty of such conduct as tends Prescriptive period: 10 years
to affect prejudicially the carrying on of the business;