Chapter 1 GENERAL PROVISIONS 1767-1783

Question 1

TRUE OR FALSE. A partnership may be constituted in any form even where the immovable property or real rights are contributed in which case a public instrument is needed. (1771)

Answer 1

FALSE. A PARTNERSHIP MAY BE CONSTITUTED IN ANY FORM EXCEPT A PARTNERSHIP WITH IMMOVABLE PROPERTY CONTRIBUTED THERETO, MUST COMPLY A PUBLIC INSTRUMENT.

Question 2

TRUE OR FALSE. Partnership with immovable property contributed if without requisite inventory signed and attached to a public instrument shall still acquire any juridical personality.

Answer 2

FALSE. If a partnership has an immovable property contributed, it shall comply with the requirements of inventory signed and attached to the public instrument, if it does not comply with the requirements, the partnership has no juridical personality.

Question 3

It is the contract of 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.

Answer 3

PARTNERSHIP

Question 4

TRUE OR FALSE. General rule - future properties cannot be contributed.

Answer 4

TRUE

Question 5

TRUE OR FALSE. A universal partnership has its object determinate things, their use for fruits, or a specific undertaking, or the exercise of a profession or vocation. (1783)

Answer 5

FALSE. PARTICULAR PARTNERSHIP HAS ITS OBJECT DETERMINATE THINGS.

Question 6

What is the classification of partners?

Answer 6

As to contribution
 1. Capitalist partner
2. Industrial partner
3. Capitalist-Industrial partner
As to liability
1. Limited partner
2. General partner
As to the management viewpoint
1. Managing partner
2. Silent partner 
3. Ostensible Partner
4. Liquidating partner
As to miscellaneous classification
1. Dormant partner
2. Nominal partner
3. Secret partner
Other classification
1. Original
2. Incoming
3. Retiring

Question 7

Who are the persons that are prohibited to donate to each other?

Answer 7

1. Spouses during marriage and couples living together.
2. persons guilty of adultery
3. persons guilty of a criminal offense
4. public officer, his wife, descendants, and ascendants.

Question 8

TRUE OR FALSE. In a universal partnership of all present property, the property which belongs to each partner at the time of the constitution of the partnership becomes the common property of all the partners, as well as all the profits which they may acquire therewith.

Answer 8

TRUE

Question 9

What are the manners of the creation of a partnership?

Answer 9

1. created orally
2. created in a public instrument
3. registered in SEC

Question 10

TRUE OR FALSE. Every contract of partnership having a capital of 3,000 pesos, in money or property, must appear in the public instrument, recorded in SEC and failure to comply affect the liability and formation of the partnership.

Answer 10

FALSE. THE FAILURE OF THE PARTNERSHIP WITH A CAPITAL OF NOT LESS THAN 3,000 PESOS TO SHOW IT AND RECORDED ON THE PUBLIC INSTRUMENT TO BE PASSED TO SEC DOES NOT AFFECT THE FORMATION, VALIDITY, AND LIABILITY OF THE PARTNERS TO 3RD PERSONS.

Question 11

What if the partnership is unlawful?

Answer 11

1. The contract is void
2. The profits shall be confiscated in favor of the state
3. The instrument, tools, and profits derived from crime shall be forfeited in favor of the state.
4. The contribution of the partners shall not be confiscated unless they fall in #3.

Question 12

What are the essential features of partnership?

Answer 12

1. There must be a valid contract.
2. The parties must have the legal capacity to enter into a contract.
3. There must be mutual contribution among partners.
4. The object must be lawful
5. The purpose is to obtain profit and divide the same among themselves.

Question 13

What are the Characteristics of a Partnership?

Answer 13

1. Consensual - perfected with mere consent of the partners
2. object must be lawful
3. intention to divide profit and losses among partners

Question 14

TRUE OR FALSE. A partnership must have a lawful object or purpose and must be established for the common benefit or interest of the partners (1770)

Answer 14

TRUE

Question 15

TRUE OR FALSE. General rule- a special form required for validity or existence of the contract of the partnership it may be made orally or in writing.

Answer 15

FALSE. A PARTNERSHIP IS NOT REQUIRED TO HAVE THE SPECIAL FORM THAT COMPLIES INTO THE REQUIREMENTS OF 1772.

Question 16

TRUE OR FALSE. A contract of partnership is void, whenever an immovable property is contributed thereto if an inventory of the said property is not made, signed by the partners, and appear on the public instrument.

Answer 16

TRUE

Question 17

It is a partnership wherein the objects are determinate things, their use or fruits; a specific undertaking or practice of the profession

Answer 17

PARTICULAR PARTNERSHIP

Question 18

TRUE OR FALSE. Articles of universal partnership entered into without specification of its nature, only constitute a universal partnership of all properties. (1781)

Answer 18

FALSE. IF THERE IS NO STIPULATION, THEN IT IS A UNIVERSAL PARTNERSHIP OF ALL PROFITS.

Question 19

TRUE OR FALSE. Persons who are prohibited from giving each other any donation or advantage cannot enter into a universal partnership. (1782)

Answer 19

TRUE

Question 20

TRUE OR FALSE. Associations and societies, whose articles are kept secret among the members, wherein one of the members may contract in his own name with the 3rd person, shall have juridical personality

Answer 20

FALSE. A SECRET PARTNERSHIP HAS NO JURIDICAL PERSONALITY AND THE ACTION OF ONE PARTNER OF THE PARTNERSHIP WHOSE ARTICLES ARE KEPT SECRET FROM THE PARTNERS DOES NOT BIND THE PARTNERSHIP BUT THE LATTER IS STILL LIABLE AS ESTOPPEL.

Question 21

What are the classifications of the Partnership?

Answer 21

As to its object
- Universal partnership
    1. Universal Partnership of all Property
    2. Universal Partnership of all Profit
- Particular partner
As to liability
1. General partnership
2. Limited partnership
As to legality
1. De Jure Partnership (Legal)
2. De Facto Partnership (Illegal)
As to duration
1. Partnership at will 
2. Partnership at a fixed term
As to representation to others
1. Ordinary partnership 
2. Partnership by Estoppel
As to purpose
1. Commercial
2. Professional
As to publicity
1. Secret
2. Open
As to the manner of creation
1. Created orally
2. created by public instrument
3. recorded in SEC

Question 22

It is a partnership that consists of all properties belonging to the partners to a common fund and the profits derived from it. (1778)

Answer 22

The universal partnership of all property

Question 23

What is the requisite for the partnership with immovable property contributed thereto?

Answer 23

1. The contract must be in a public instrument.

2. The inventory of the property must be made, signed by the partners, and attached to the public instrument.

Question 24

TRUE OR FALSE. Any immovable property or an interest therein may be acquired in the partnership name.

Answer 24

TRUE

Question 25

TRUE OR FALSE. A partnership is dissolved by operation of law upon the happening of an event which makes it unlawful.

Answer 25

TRUE. A JURIDICAL DECREE IS NOT NECESSARY TO DISSOLVE AN UNLAWFUL PARTNERSHIP.

Question 26

How to determine if the partnership does exist or not?

Answer 26

1. Persons who are not partners as to 3rd persons. 2. Co-ownership or co-possession does not establish itself as a partnership even with or without sharing of profits derived from the use of the property. 3. Sharing of gross return does not equate to partnership 4. The receipt of profits is prima facie evidence that he is a partner but if it from the debt of installment, wages of an employee, an annuity of a widow, interest on a loan, sale of goodwill, he is not a partner.

Question 27

It is a partner that does not participate in the management.

Answer 27

silent partner

Question 28

It is a partner that is both silent and secret partner

Answer 28

dormant partner

Question 29

It is a partner who is exempted from the losses but prohibited from engaging in any business in relation to or without relation to the partnership.

Answer 29

industrial partner

Question 30

TRUE OR FALSE. A universal partnership may refer to all present property or to particular. (1777)

Answer 30

FALSE. UNIVERSAL PARTNERSHIP MAY REFER TO ALL PROPERTY OR ALL PROFITS

Question 31

TRUE OR FALSE. A universal partnership of profits imposes more obligations on the partners.

Answer 31

FALSE. IT IMPOSES LESS SINCE THE PARTNERS PRESERVE THEIR OWNERSHIP ON THE PROPERTY CONTRIBUTED.

Question 32

It is a partnership that consists of properties contributed except for the ownership and only the usufruct and use of the properties belong to the partnership. (1780)

Answer 32

The universal partnership of all profits

Question 33

What are the tests and incidents of partnership? (1769)

Answer 33

1. Terms of agreement control 2. Typical incidents: 3. the partners share profits and losses 4. they have equal rights in the management and conduct of the partnership. 5. every partner is an agent of the partnership 6. every partner is liable up to the extent of their separate property except limited partners. 7. There is a fiduciary relationship among partners 8. in dissolution, the partnership is not yet terminated until the winding-up is completed.

Question 34

Who are the persons not allowed to give their consent to the contract of a partnership?

Answer 34

1. Insane or demented persons 2. Deaf-mute who don't know how to write 3. Unemancipated minors 4. Persons under civil interdiction 5. Incompetents who are under guardianship 6. Persons under people who are prohibited from giving each other a donation.