PARTNERSHIP, AGENCY AND TRUST LAWSNOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

PART ONE: PARTNERSHIP LAW

I. HISTORICAL CONSIDERATIONS

A. The Evolution of Partnership

1. Development of Partnership Earliest form of conducting business: single entrepreneur. To permit combinations of capital, or capital and experience, and to secure economy by eliminating some of the overhead costs of individual enterprises, the partnership plan of business association was develop. Can be traced back to ancient history

2. Ancient origin of partnership as business organizationa. Romans: capitals, good, talents, and credit of two or more individuals might best be combined to carry on trade or business.b. Babylonian period: Hammurabi (King of Babylon) 2300 B.C., provided for the regulation of the relation called partnership (single transactions or undertakings).c. Jewish Law: partnership as bus. org. concerned with the holding of title to land by two or more persons. hutolin joint ownership of land

3. The relative newness of the law of partnership Partnership had been well and generally established in British commerce. Disputes between merchants were considered and disposed of by special courts (Courts Staple, Admiralty Courts and Courts of Piepoudre).a. The law of merchants: Special courts established- the merchants moved more rapidly than the law and they required that justice be more speedy and that it be in accord with their custom,b. English law of partnership Special courts was discontinued and their function were taken over by the law courts (Chief Justice Lord Mansfield) Establish common law for commercial matters.c. Beginning of law of partnership: the increased use of the partnership as bus. org., together with the increase in the complexity of business, generally has brought forth a rapid succession of decisions involving partnership.

4. America Uniform ActPurpose: to achieve uniformity of decisions in this field of law (partnership).

a. Uniform Partnership Act (enacted: 1914)

b. Uniform Limited Partnership Act

B. Sources of Philippine Partnership Law

1. Code of Commerce (Arts. 116-238) Commercial and mercantile partnerships deal with mercantile transactions.

2. Old Spanish Civil Code (Arts. 1665-1708) non-commercial or civil partnerships engaged in civil purposes; difference was in the desired purpose not the manner of organization.

3. New Civil Code (Title IX, Arts. 1767-1867) no more distinction between commercial and civil partnerships; govern all transactions of all partnership whether the object be civil or mercantileNOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

a. Uniform Partnership Act (Sources of Arts. 1769, 1774, 1785, 1805 to 1907, 1809, 1810 to 1814, 1819 to 1826)

b. Uniform Limited Partnership Act

II. NATURE AND ATTRIBUTES

A. Concept

Art. 1767, 1st par, CC established by a contract but the law fixes the conditions under which it shall operate once established.

Art. 1767. By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves

Two or more persons may also form a partnership for the exercise of a profession.

B. Partnership as a Contractual Relation

Art. 1769 In determining whether a partnership exists, these rules shall apply:

1. Except as otherwise provided by Art. 1825, persons who are not partners as to each other are not partners as to third persons; 2. Co-ownership or co-possession does not of 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;3. The sharing of gross returns does not of itself establish a partnership, WON the persons sharing them have a joint or common right or interest in any property from which the returns are derived; 4. The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment: a. As a debt by installment of otherwise; b. As wages of an employee or rent to a landlord; c. As an annuity to a widow or representative of a deceased partner; NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

d. As interest on a loan, though the amount of payment vary with the profits of the business; NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

e. As the consideration for the sale of a goodwill of a business or other property by instalments or otherwise.

1. Essential Elements Art.1767 Valid contract Parties (two or more persons) Mutual contribution (money, property or industry) Profit Lawful

a. Necessity of Contract Art. 1318 There is no contract unless the following requisites concur:

1. Consent of the contracting parties; 2. Object certain which is the subject matter of the contract; 3. Cause of the obligation which is established.

b. Parties who may become a partner

UNEMANCIPATED AND INSANEArt. 1327 The following cannot give consent to a contract:

1. Unemancipated minors;

2. Insane or demented persons, and deaf-mutes who do not know how to read or write;

Art. 1329 The incapacity declared in Art. 1327 is subject to the modifications determined by law, and is understood to be without prejudice to special disqualifications established in the laws.

Art. 234 FC Emancipation takes place by the attainment of majority. Unless otherwise provided, majority commences at the age of 18 y/o.

Art. 34 RPC Civil Interdiction Civil interdiction shall deprive the offender during the time of his sentence of the right of parental authority, or guardianship, either as to the person or property of any ward, or marital authority, of the right to manage his property, and of the right to dispose of such property by any act or any conveyance inter vivos.

Rule 93 - Appointment of Guardians Rule 94 Bonds of Guardians

DONATION

Art. 1782 Persons who are prohibited from giving each other any donation or advantage cannot enter into universal partnership.

ARTICLE 739. The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the time of the donation;

(2) Those made between persons found guilty of the same criminal offense, in consideration thereof;NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(3) Those made to a public officer or his wife, descendants and ascendants, by reason of his office.

In the case referred to in No. 1, the action for declaration of nullity may be brought by the spouse of the donor or donee; and the guilt of the donor and donee may be proved by preponderance of evidence in the same action. (n)

c. Consent or Intention to become a partner 1769 (1) 1804

Art. 1769 In determining whether a partnership exists, these rules shall apply:

1. Except as otherwise provided by Art. 1825, persons who are not partners as to each other are not partners as to third persons; x x x x

ARTICLE 1825. When a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to anyone, as a partner in an existing partnership or with one or more persons not actual partners, he is liable to any such persons to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he has made such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made: NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(1) When a partnership liability results, he is liable as though he were an actual member of the partnership;(2) When no partnership liability results, he is liable pro rata with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.

When a person has been thus represented to be a partner in an existing partnership, or with one or more persons not actual partners, he is an agent of the persons consenting to such representation to bind them to the same extent and in the same manner as though he were a partner in fact, with respect to persons who rely upon the representation. When all the members of the existing partnership consent to the representation, a partnership act or obligation results; but in all other cases it is the joint act or obligation of the person acting and the persons consenting to the representation. (n)

ARTICLE 1804. Every partner may associate another person with him in his share, but the associate shall not be admitted into the partnership without the consent of all the other partners, even if the partner having an associate should be a manager. (1696)

d. Lawful subject matter and Cause 1347, 1348, 1770

Art. 1306 The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

Art. 1347 All things which are not outside the commerce of men, including future things, may be the object of a contract. All rights which are not intransmissible may also be the object of contracts.

No contract may be entered into upon future inheritance except in case expressly authorized by law.

Art. 1348 Impossible things or services cannot be the object of contracts.

Art. 1349 The object of every contract must be determinate as to its kind. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Art. 1409 The following contracts are inexistent and void from the beginning:

1. Those whose cause, object of purpose is contrary to law, morals, good customs, public order or public policy; 2. Those which are absolutely simulated or fictitious;3. Those whose cause or object did not exist at the time of the transaction; 4. Those whose object is outside the commerce of men; 5. Those which contemplate an impossible service; 6. Those where the intention of the parties relative to the principal object of the contract cannot be ascertained 7. Those expressly prohibited or declared void by law;These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived.

Art. 1770 A partnership must have a lawful object of purpose, and must established for the common benefit or interest of the partners.

When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the State, without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and effects of a crime.

The pursuit of a particular business for profit; except where the law requires a specific form of business organization such as banking or insurance which only corporations can undertake.

e. Contribution to a common fund 1767

(1) Existence of proprietary interest must contribute MPIa. Money currency which is legal tender in the PH. Nego. Ints.: no contribution until encashed.b. Property real or personal, corporeal or incorporeal. Promissory note, evidence of obligation or goodwill may be contributed.c. Industry means active cooperation, the work of the party associated, which may be either personal ir manual efforts or intellectual, and for which he receives a share in the profits.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(2) Proof of contribution necessary in partnership.

f. Purpose: Business or profession - 1767

Cause of obligation Art. 1350 for each contracting party, the prestation or promise of a thing or service by the other; the undertaking of the other to contribute money, property or industry.

Art. 1350 In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other, in remuneratory ones, the service of benefit which is remunerated; and in contracts of pure beneficence, the mere liberality of the benefactor

PURPOSE:(1) The very reason for existence of partnership A partnership is formed to carry on a business. The idea of obtaining pecuniary profit or gain directly through or as a result of the business to be carrid on is the very reason for the existence of a partnership.(2) Need only be principal, not exclusive aim. It is sufficient that the principal purpose of the partnership is sharing of profits in certain proportions even if there are incidentally, moral, social or spiritual ends. Sharing of profits: Not necessarily in equal shares Not conclusive evidence of partnership Sharing of losses: Necessary corollary of sharing in profits Agreement not necessary-sharing of profit shall be in the same proportion as the sharing of losses.

g. Community of Interest 1767, 1770, 1769 (3), (4)NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

i. co-ownership of capital or propertyii. Joint management and controliii. Co-ownership of profits and participation in profits and losses

Art. 1770 A partnership must have a lawful object of purpose, and must established for the common benefit or interest of the partners.

When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the State, without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and effects of a crime.

Art. 1769. xxx3. The sharing of gross returns does not of itself establish a partnership, WON the persons sharing them have a joint or common right or interest in any property from which the returns are derived; 4. The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment: a. As a debt by installment of otherwise; b. As wages of an employee or rent to a landlord; c. As an annuity to a widow or representative of a deceased partner;d. As interest on a loan, though the amount of payment vary with the profits of the business; e. As the consideration for the sale of a goodwill of a business or other property by instalments or otherwise.

2. Principles Governing PartnershipNOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

a. Contractual in nature 1767, 1784

Art. 1784 A partnership begins from the moment of execution of the contract, unless it is otherwise stipulated.

b. Separate Juridical Personality 1768, 46, 51, 1775

Article 1768. The partnership has a juridical personality separate and distinct from that of each of the partners, even in case of failure to comply with the requirements of article 1772, first paragraph.

Article 1772. Every contract of partnership having a capital of three thousand pesos or more, in money or property, shall appear in a public instrument, which must be recorded in the Office of the Securities and Exchange Commission.Failure to comply with the requirements of the preceding paragraph shall not affect the liability of the partnership and the members thereof to third persons.

ARTICLE 46.Juridical persons may acquire and possess property of all kinds, as well as incur obligations and bring civil or criminal actions, in conformity with the laws and regulations of their organization. (38a)

ARTICLE 51.When the law creating or recognizing them, or any other provision does not fix the domicile of juridical persons, the same shall be understood to be the place where their legal representation is established or where they exercise their principal functions. (41a)

ARTICLE 1775.Associations and societies, whose articles are kept secret among the members, and wherein any one of the members may contract in his own name with third persons, shall have no juridical personality, and shall be governed by the provisions relating to co-ownership. (1669) NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

c. Delectus Personae 1804, 1813

Means choice of the person or choice of the persons. Partnership relation fiduciary in nature. Partnership is a form of voluntary association entered into by the associates. It is a personal relation in which the element of delectus personae exists, involving as it does trust and confidence between the partners.

ARTICLE 1804. Every partner may associate another person with him in his share, but the associate shall not be admitted into the partnership without the consent of all the other partners, even if the partner having an associate should be a manager. (1696)

ARTICLE 1813.A conveyance by a partner of his whole interest in the partnership does not of itself dissolve the partnership, or, as against the other partners in the absence of agreement, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any information or account of partnership transactions, or to inspect the partnership books; but it merely entitles the assignee to receive in accordance with his contract the profits to which the assigning partner would otherwise be entitled. However, in case of fraud in the management of the partnership, the assignee may avail himself of the usual remedies. In case of a dissolution of the partnership, the assignee is entitled to receive his assignor's interest and may require an account from the date only of the last account agreed to by all the partners. (n)

NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

CASE:

ORTEGA vs. CAG.R. No. 109248, July 3, 1995, Vitug, J;p

FACTS: Ortega, then a senior partner in the law firm Bito, Misa, and Lozada withdrew in said firm. He filed with SEC a petition for dissolution and liquidation of partnership. SEC en banc ruled that withdrawal of Misa from the firm had dissolved the partnership. Reason: since it is partnership at will, the law firm could be dissolved by any partner at anytime, such as by withdrawal there from, regardless of good faith or bad faith, since no partner can be forced to continue in the partnership against his will.

ISSUE: 1. WON the partnership of Bito, Misa & Lozada (now Bito, Lozada, Ortega & Castillo) is a partnership at will;

2. WON the withdrawal of Misa dissolved the partnership regardless of his good or bad faith;

HELD: 1. Yes. The partnership agreement of the firm provides that [t]he partnership shall continue so long as mutually satisfactory and upon the death or legal incapacity of one of the partners, shall be continued by the surviving partners.

2. Yes. Any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will (e.g. by way of withdrawal of a partner). He must, however, act in good faith, not that the attendance of bad faith can prevent the dissolution of the partnership but that it can result in a liability for damages.

d. Mutual Agency 1803, 1818, 1822NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

ARTICLE 1803.When the manner of management has not been agreed upon, the following rules shall be observed:(1)All the partners shall be considered agents and whatever any one of them may do alone shall bind the partnership, without prejudice to the provisions of article 1801.(2)None of the partners may, without the consent of the others, make any important alteration in the immovable property of the partnership, even if it may be useful to the partnership. But if the refusal of consent by the other partners is manifestly prejudicial to the interest of the partnership, the court's intervention may be sought. (1695a)

ARTICLE 1818.Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority. An act of a partner which is not apparently for the carrying on of business of the partnership in the usual way does not bind the partnership unless authorized by the other partners. Except when authorized by the other partners or unless they have abandoned the business, one or more but less than all the partners have no authority to:(1)Assign the partnership property in trust for creditors or on the assignee's promise to pay the debts of the partnership;(2)Dispose of the good-will of the business;(3)Do any other act which would make it impossible to carry on the ordinary business of a partnership;(4)Confess a judgment;(5)Enter into a compromise concerning a partnership claim or liability; meiriw(6)Submit a partnership claim or liability to arbitration;NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(7)Renounce a claim of the partnership.No act of a partner in contravention of a restriction on authority shall bind the partnership to persons having knowledge of the restriction. (n)

ARTICLE 1822.Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co-partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act. (n)

e. Unlimited Liability 1816, 1817, 1824, 1826, 1827, 1839 (4), (7)

ARTICLE 1816.All partners, including industrial ones, shall be liable pro rata with all their property and after all the partnership assets have been exhausted, for the contracts which may be entered into in the name and for the account of the partnership, under its signature and by a person authorized to act for the partnership. However, any partner may enter into a separate obligation to perform a partnership contract. (n) ARTICLE 1817.Any stipulation against the liability laid down in the preceding article shall be void, except as among the partners. (n)ARTICLE 1824.All partners are liable solidarily with the partnership for everything chargeable to the partnership under articles 1822 and 1823. (n)

ARTICLE 1826.A person admitted as a partner into an existing partnership is liable for all the obligations of the partnership arising before his admission as though he had been a partner when such obligations were incurred, except that this liability shall be satisfied only out of partnership property, unless there is a stipulation to the contrary. (n)ARTICLE 1827.The creditors of the partnership shall be preferred to those of each partner as regards the partnership property. 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. (n) NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

ARTICLE 1839.In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary: wItwsi(1)The assets of the partnership are:(a)The partnership property,(b) The contributions of the partners necessary for the payment of all the liabilities specified in No. 2.(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.(3)The assets shall be applied in the order of their declaration in No. 1 of this article to the satisfaction of the liabilities.(4)The partners shall contribute, as provided by article 1797, the amount necessary to satisfy the liabilities.(5)An assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in the preceding number. (6)Any partner or his legal representative shall have the right to enforce the contributions specified in No. 4, to the extent of the amount which he has paid in excess of his share of the liability.(7)The individual property of a deceased partner shall be liable for the contributions specified in No. 4.(8)When partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(9)Where a partner has become insolvent or his estate is insolvent, the claims against his separate property shall rank in the following order:(a)Those owing to separate creditors;(b)Those owing to partnership creditors; (c)Those owing to partners by way of contribution. (n)

3. Distinguished from other combinations and relations

a. Joint Venture A commercial undertaking by two or more persons, differing from a partnership in that it relates to the disposition of a single lot of goods or the completion of a single project. Its duration is limited to a period in which the goods are sold or the project is carried on. A corporation may enter into joint venture partnership with another where the nature of the venture is in line with the business authorized by its charter.

CASE(S):

Aurbach vs. Sanitary Wares180 scra 130 (1989)

Facts:This consolidated petition assailed the decision of the CA directing a certain MANNER OF ELECTION OFOFFICERS IN THE BOARD OF DIRECTORS. (Noted: There was a disagreement about the election of Board of Members, wherein the no. of nominees exceeded to the prescribe no. that should have been nominated. For foreigner,3 nominees only, while the Filipino group shall have a 6 nominees. During the election, there are 3 nominees from the foreign group while the Filipino group have 8 nominees. The Chairman ruled that the first 9 nominees will be the winner in the said election *There are two groups in this case, theLagdameo group composed of Filipino investors and the American Standard Inc. (ASI) composed of foreign investors.The ASI Group and petitioner Salazar (G.R. Nos. 75975-76) contend that the actual intention of theparties should be viewed strictly on the "Agreement" dated August 15,1962 wherein it is clearly statedthat the parties' intention was to form a corporation and not a joint venture.Issue:The main issue hinges on who were the duly elected directors of Saniwares for the year 1983 during itsannual stockholders' meeting held on March 8, 1983. Ruling:NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

While certain provisions of the Agreement would make it appear that the parties theretodisclaim being partners or joint venturers such disclaimer is directed at third parties and is notinconsistent with, and does not preclude, the existence of two distinct groups of stockholders inSaniwares one of which (the Philippine Investors) shall constitute the majority, and the other ASIshall constitute the minority stockholder. In any event, the evident intention of the PhilippineInvestors and ASI in entering into the Agreement is to enter into a joint venture enterpriseAn examination of the Agreement shows that certain provisions were included to protect theinterests of ASI as the minority. For example, the vote of 7 out of 9 directors is required incertain enumerated corporate acts. ASI is contractually entitled to designate a member of theExecutive Committee and the vote of this member is required for certain transactionsThe Agreement also requires a 75% super-majority vote for the amendment of the articles andby-laws of Saniwares. ASI is also given the right to designate the president and plant manager.The Agreement further provides that the sales policy of Saniwares shall be that which isnormally followed by ASI and that Saniwares should not export "Standard" products otherwisethan through ASI's Export Marketing Services. Under the Agreement, ASI agreed to providetechnology and know-how to Saniwares and the latter paid royalties for the same.The legal concept of a joint venture is of common law origin. It has no precise legal definitionbut it has been generally understood to mean an organization formed for some temporary purpose. It is in fact hardly distinguishable from the partnership, since their elements are similar community of interest in the business, sharing of profits and losses, and a mutual right of control.The main distinction cited by most opinions in common law jurisdictions is that the partnershipcontemplates a general business with some degree of continuity , while the joint venture is formedfor the execution of a single transaction, and is thus of a temporary nature

HEIRS OF TAN ENG KEE vs.CANOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

341 SCRA 740, G.R. No. 126881, October 3, 2000, De Leon, Jr.:p FACTS: The complaint alleged that after the second World War, Tan EngKee and Tan Eng Lay, pooling their resources and industry together, entered into a partnership engaged in the business of selling lumber and hardware and construction supplies. They named their enterprise "Benguet Lumber" which they jointly managed until Tan EngKee's death. Petitioners claimed that Tan Eng Lay and his children caused the conversion of the partnership "Benguet Lumber" into a corporation called "Benguet Lumber Company" allegedly to deprive Tan Eng Kee and his heirs of their rightful participation in the profits of the business. After Tang Eng Kees death petitioners prayed for accounting of the partnership assets, and the dissolution, winding up and liquidation thereof, and the equal division of the net assets of Benguet Lumber. The RTC ruled in favor of petitioners, declaring that Benguet Lumber is a joint venture which is akin to a particular partnership. The Court of Appeals rendered the assailed decision reversing the judgment of the trial court.

ISSUE: Whether or not Tan Eng Kee and Tan Eng Lay were partners in Benguet Lumber.

HELD:NO. The trial court determined that Tan EngKee and Tan Eng Lay had entered into a joint venture, which it said is akin to a particular partnership. A particular partnership is distinguished from a joint adventure, to wit:(a) A joint adventure (an American concept similar to our joint accounts) is a sort of informal partnership, with no firm name and no legal personality. In a joint account, the participating merchants can transact business under their own name, and can be individually liable therefor.(b) Usually, but not necessarily a joint adventure is limited to a SINGLE TRANSACTION, although the business of pursuing to a successful termination may continue for a number of years; a partnership generally relates to a continuing business of various transactions of a certain kind. A joint venture "presupposes generally a parity of standing between the joint co-ventures or partners, in which each party has an equal proprietary interest in the capital or property contributed, and where each party exercises equal rights in the conduct of the business. The evidence presented by petitioners falls short of the quantum of proof required to establish a partnership. In the absence of evidence, we cannot accept as an established fact that Tan Eng Kee allegedly contributed his resources to a common fund for the purpose of establishing a partnership. Besides, it is indeed odd, if not unnatural, that despite the forty years the partnership was allegedly in existence, Tan Eng Kee never asked for an accounting. The essence of a partnership is that the partners share in the profits and losses. Each has the right to demand an accounting as long as the partnership exists. A demand for periodic accounting is evidence of a partnership. During his lifetime, Tan Eng Kee appeared never to have made any such demand for accounting from hisbrother, Tang Eng Lay. We conclude that Tan Eng Kee was only an employee, not a partner since they did not present and offer evidence that would show that Tan Eng Kee received amounts of money allegedly representing his share in the profits of the enterprise.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

There being no partnership, it follows that there is no dissolution, winding up or liquidation to speak of. Hence, the petition must fail.

b. AgencyARTICLE 1868.By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. (1709a)

c. EmploymentNOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

CASE(S):

RUGA VS. NLRCG.R. No. 72654-81 January 22, 1990

FACTS:Private respondent's regular business of "trawl" fishing, petitioners were paid on percentage commission basis in cash by one Mrs. Pilar de Guzman, cashier of private respondent. As agreed upon, they received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil consumed during the fishing trip, otherwise, they received ten percent (10%) of the total proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a minimum income of P350.00 per week while the assistant engineer, second fisherman, and fisherman-winchman received a minimum income of P260.00 per week.

ISSUE:Whether or not the fishermen-crew members of the trawl fishing vessel are employees of its owner-operator, De Guzman Fishing Enterprises.

HELD:The hiring of petitioners to perform work which is necessary or desirable in the usual business or trade of private respondent for a period of 8-15 years since 1968 qualify them as regular employees within the meaning of Article 281 of the Labor Code as they were indeed engaged to perform activities usually necessary or desirable in the usual fishing business or occupation of private respondent.

1. LABOR LAW; EMPLOYER-EMPLOYEE RELATIONSHIP; ELEMENTS IN DETERMINING EXISTENCE THEREOF. We have consistently ruled that in determining the existence of an employer-employee relationship, the elements that are generally considered are the following (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. The employment relation arises from contract of hire, express or implied. In the absence of hiring, no actual employer-employee relation could exist.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. ID.; ID.; PRESENT IN THE CASE AT BAR. To stress that there is an employer-employee relationship between them and private respondent, petitioners invite attention to the following: that they were directly hired by private respondent through its general manager, Arsenio de Guzman, and its operations manager, Conrado de Guzman; that, except for Laurente Bautu, they had been employed by private respondent from 8 to 15 years in various capacities; that private respondent, through its operations manager, supervised and controlled the conduct of their fishing operations as to the fixing of the schedule of the fishing trips, the direction of the fishing vessel, the volume or number of tubes of the fish-catch, the time to return to the fishing port, which were communicated to the patron/pilot by radio (single side band) that they were not allowed to join other outfits even the other vessels owned by private respondent without the permission of the operations manager; that they were compensated on percentage commission basis of the gross sales of the fish-catch which were delivered to them in cash by private respondent's cashier, Mrs. Pilar de Guzman; and that they have to follow company policies, rules and regulations imposed on them by private respondent. Furthermore, the fact that on mere suspicion based on the reports that petitioners allegedly sold their fish-catch at midsea without the knowledge and consent of private respondent, petitioners were unjustifiably not allowed to board the fishing vessel on September 11, 1983 to resume their activities without giving them the opportunity to air their side on the accusation against them unmistakably reveals the disciplinary power exercised by private respondent over them and the corresponding sanction imposed in case of violation of any of its rules and regulations.

3. ID.; ID.; REGULAR EMPLOYEE, CONSTRUED. While tenure or length of employment is not considered as the test of employment, nevertheless the hiring of petitioners to perform work which is necessary or desirable in the usual business or trade of private respondent for a period of 8-15 years since 1968 qualify them as regular employees within the meaning of Article 281 of the Labor Code as they were indeed engaged to perform activities usually necessary or desirable in the usual fishing business or occupation of private respondent.

4. ID.; WAGE, DEFINED; COMPENSATION ON A PERCENTAGE COMMISSION BASED ON THE GROSS SALE OF THE FISH-CATCH TANTAMOUNT TO WAGE. Aside from performing activities usually necessary and desirable in the business of private respondent, it must be noted that petitioners received compensation on a percentage commission based on the gross sale of the fish-catch, i.e. 13% of the proceeds of the sale if the total proceeds exceeded the cost of the crude oil consumed during the fishing trip, otherwise only 10% of the proceeds of the sale. Such compensation falls within the scope and meaning of the term "wage" as defined under Article 97(f) of the Labor Code, thus: "(f) 'Wage' paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered, and included the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. . . . "NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

ARSENIO T. MENDIOLA, petitioner, vs.COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, PACIFIC FOREST RESOURCES, PHILS., INC. and/or CELLMARK AB, respondents

Facts:Private respondent Pacific Forest Resources, Phils., Inc. (Pacfor) is a corporation organized and existing under the laws of California, USA. Private respondent Pacfor entered into a "Side Agreement on Representative Office known as Pacific Forest Resources (Phils.), Inc."5 with petitioner Arsenio T. Mendiola (ATM), effective May 1, 1995, "assuming that Pacfor-Phils. is already approved by the Securities and Exchange Commission [SEC] on the said date. etitioner is not a part-owner of Pacfor Phils. because the latter is merely Pacfor-USA's representative office and not an entity separate and distinct from Pacfor-USA. "It's simply a 'theoretical company' with the purpose of dividing the income 50-50."11 Petitioner presumably knew of this arrangement from the start, having been the one to propose to private respondent Pacfor the setting up of a representative office, and "not a branch office" in the Philippines to save on taxes.12On November 27, 2000, private respondent Pacfor, through counsel, ordered petitioner to turn over to it all papers, documents, files, records, and other materials in his or ATM Marketing Corporation's possession that belong to Pacfor or Pacfor Phils. Petitioner construed these directives as a severance of the "unregistered partnership" between him and Pacfor, and the termination of his employment as resident manager of Pacfor Phils private respondent Pacfor placed petitioner on preventive suspension and ordered him to show cause why no disciplinary action should be taken against him. Petioner was dismissed. NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

ISSUEWON there is partnership or employer-employee relationship?

Held:We hold that petitioner is an employee of private respondent Pacfor and that no partnership or co-ownership exists between the parties.In a partnership, the members become co-owners of what is contributed to the firm capital and of all property that may be acquired thereby and through the efforts of the members.36 The property or stock of the partnership forms a community of goods, a common fund, in which each party has a proprietary interest.37 In fact, the New Civil Code regards a partner as a co-owner of specific partnership property.38 Each partner possesses a joint interest in the whole of partnership property. If the relation does not have this feature, it is not one of partnership.39 This essential element, the community of interest, or co-ownership of, or joint interest in partnership property is absent in the relations between petitioner and private respondent Pacfor. Petitioner is not a part-owner of Pacfor Phils. William Gleason, private respondent Pacfor's President established this fact when he said that Pacfor Phils. is simply a "theoretical company" for the purpose of dividing the income 50-50. He stressed that petitioner knew of this arrangement from the very start, having been the one to propose to private respondent Pacfor the setting up of a representative office, and "not a branch office" in the Philippines to save on taxes. Thus, the parties in this case, merely shared profits. This alone does not make a partnership.40Besides, a corporation cannot become a member of a partnership in the absence of express authorization by statute or charter.41 This doctrine is based on the following considerations: (1) that the mutual agency between the partners, whereby the corporation would be bound by the acts of persons who are not its duly appointed and authorized agents and officers, would be inconsistent with the policy of the law that the corporation shall manage its own affairs separately and exclusively; and, (2) that such an arrangement would improperly allow corporate property to become subject to risks not contemplated by the stockholders when they originally invested in the corporation.42 No such authorization has been proved in the case at bar. NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

d. Co-ownership

There is a co-ownership whenever the ownership of an undivided thing or right belongs to different persons. (Art. 484.) It is the right of common dominion which two or more persons have in a spiritual part of a thing which is not physically divided.

The following are the distinctions between a partnership and a co-ownership:

(1) Creation. Co-ownership is generally created by law.It may exist even without a contract, but partnership is always created by a contract (Art. 1767.), either express or implied;

(2) Juridical personality. A partnership has a juridical personality separate and distinct from that of each partner (Art.1768.), while a co-ownership has none;

(3) Purpose. The purpose of a partnership is the realization of profits (Art. 1767.), while in co-ownership, it is the common enjoyment of a thing or right (see Art. 486.) which does not necessarily involve the sharing of profits;

(4) Duration. Under the law, there is no limitation upon the duration of a partnership (see Arts. 1767, 1785.) while in co-ownership, an agreement to keep the thing undivided for more than ten years is not allowed (see Art. 494.);

(5) Disposal of interests. A partner may not dispose of his individual interest in the partnership (Art. 1812.) so as to make the assignee a partner unless agreed upon by all of the partners;

(6) Power to act with third persons. In the absence of any stipulation to the contrary (Art. 1803.), a partner may bind the partnership, while a co-owner cannot represent the co-ownership; and

(7) Effect of death. The death of a partner results in thedissolution of the partnership (Art. 1830[5].), but the death of a co-owner does not necessarily dissolve the co-ownership.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

e. Corporation

i.Manner of Creation Art. 1787 vs. Sec. 2 Corporation Code

Art. 1787 When the capital or a part thereof which a partner is bound to contribute consists of goods, their appraisal must be made in the manner prescribed in the contract of partnership, and in the absence if stipulation, it shall be made by experts chosen by the partners, and according to current prices, the subsequent changes thereof being for the account of partnership.

Sec. 2 Corp. Code - Corporation defined. - A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.

ii.Number of Incorporators Art. 1767 vs. Sec 10 Corp Code

Art. 1767 By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.

Two or more persons may also form a partnership for the exercise of a profession.

Sec. 10 Corp. Code

iii.Start of Existence Art. 1784 vs. Sec. 19 Corp Code

Art. 1784 A partnership begins from the moment of execution of the contract, unless it is otherwise stipulated.

Sec. 19 Corp Code Commencement of corporate existence. - A private corporation formed or organized under this Code commences to have corporate existence and juridical personality and is deemed incorporated from the date the Securities and Exchange Commission issues a certificate of incorporation under its official seal; and thereupon the incorporators, stockholders/members and their successors shall constitute a body politic and corporate under the name stated in the articles of incorporation for the period of time mentioned therein, unless said period is extended or the corporation is sooner dissolved in accordance with law.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

iv.Powers Art. 1306 vs. Sec 2, 36 Corp. Code

Art. 1306 The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

Sec 2 Corp Code - Corporation defined. - A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.

Sec. 36 Corp. Code - Corporate powers and capacity. - Every corporation incorporated under this Code has the power and capacity:1.To sue and be sued in its corporate name;

2.Of succession by its corporate name for the period of time stated in the articles of incorporation and the certificate of incorporation;

3.To adopt and use a corporate seal;

4.To amend its articles of incorporation in accordance with the provisions of this Code;

5.To adopt by-laws, not contrary to law, morals, or public policy, and to amend or repeal the same in accordance with this Code; NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

6.In case of stock corporations, to issue or sell stocks to subscribers and to sell stocks to subscribers and to sell treasury stocks in accordance with the provisions of this Code; and to admit members to the corporation if it be a non-stock corporation;

7.To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage and otherwise deal with such real and personal property, including securities and bonds of other corporations, as the transaction of the lawful business of the corporation may reasonably and necessarily require, subject to the limitations prescribed by law and the Constitution;

8.To enter into merger or consolidation with other corporations as provided in this Code;

9.To make reasonable donations, including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, That no corporation, domestic or foreign, shall give donations in aid of any political party or candidate or for purposes of partisan political activity;

10.To establish pension, retirement, and other plans for the benefit of its directors, trustees, officers and employees; and 11. To exercise such other powers as may be essential or necessary to carry out its purpose or purposes as stated in the articles of incorporation.

v.Name Art. 1844 (l,a) vs. Sec. 11 Corp Code

(Limited Partnerships)Art. 1844 Two or more persons desiring to form a limited partnership shall:

I.Sign and swear to a certificate, which shall state a.The name of the partnership, adding thereto the word Limited; NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Sec. 11 Corp Code - Corporate term. - A corporation shall exist for a period not exceeding fifty (50) years from the date of incorporation unless sooner dissolved or unless said period is extended. The corporate term as originally stated in the articles of incorporation may be extended for periods not exceeding fifty (50) years in any single instance by an amendment of the articles of incorporation, in accordance with this Code; Provided, That no extension can be made earlier than five (5) years prior to the original or subsequent expiry date(s) unless there are justifiable reasons for an earlier extension as may be determined by the Securities and Exchange Commission

vi.Term of existence Art. 1767 vs. Sec. 11 Corp Code

Art. 1767 - By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.Two or more persons may also form a partnership for the exercise of a profession.

Sec. 11 Corp Code- A corporation shall exist for a period not exceeding fifty (50) years from the date of incorporation unless sooner dissolved or unless said period is extended. The corporate term as originally stated in the articles of incorporation may be extended for periods not exceeding fifty (50) years in any single instance by an amendment of the articles of incorporation, in accordance with this Code; Provided, That no extension can be made earlier than five (5) years prior to the original or subsequent expiry date(s) unless there are justifiable reasons for an earlier extension as may be determined by the Securities and Exchange Commission.

vii.Liability to third parties Art. 1816, 1822-1824 vs. Sec. 64. 37 Corp

Art. 1816 All partners, including industrial ones, shall be liable pro rata with all their property and after all partnership assets have been exhausted, for the contracts which may be entered into the name and for the partnership. However, any partner may enter into a separate obligation to perform a partnership contract.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Art. 1822 Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co-partners, loss or injury is caused to any person, bot being a partner in the partnership , or any penalty incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act.Art. 1823 The partnership is bound to make good the loss:

1.Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and

2.Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner where it is in the custody of the partnership.

Art. 1824 All partners are liable solidarily with the partnership for everything chargeable to the partnership under Articles 1822 and 1823.

Sec. 64. Corp Code - Issuance of stock certificates. - No certificate of stock shall be issued to a subscriber until the full amount of his subscription together with interest and expenses (in case of delinquent shares), if any is due, has been paid.

Sec. 37 Corp Code- Power to extend or shorten corporate term. - A private corporation may extend or shorten its term as stated in the articles of incorporation when approved by a majority vote of the board of directors or trustees and ratified at a meeting by the stockholders representing at least two-thirds (2/3) of the outstanding capital stock or by at least two-thirds (2/3) of the members in case of non-stock corporations. Written notice of the proposed action and of the time and place of the meeting shall be addressed to each stockholder or member at his place of residence as shown on the books of the corporation and deposited to the addressee in the post office with postage prepaid, or served personally: Provided, That in case of extension of corporate term, any dissenting stockholder may exercise his appraisal right under the conditions provided in this code.NOTES:________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

viii.Transferability of Interest Art. 1767, 1804 vs. Sec. 63 Corp Code

Art. 1767 (supra)

Art. 1804 Every partner may associate another person with him in his share, but the associate shall not be admitted into the partnership without the consent of all the other partners, even if the partner having an associate should be a manager.

Sec. 63 Corp Code - Certificate of stock and transfer of shares. - The capital stock of stock corporations shall be divided into shares for which certificates signed by the president or vice president, countersigned by the secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance with the by-laws. Shares o