ATP ASSIGNMENT

1. Define/Explain:
a. Partnership – As provided in Article 1767 of the Civil Code 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.

b. Delectus Personae - This Latin phrase may be literally translated as choice of the
person or choice of the persons. It is because of this delectus personae that the law
gives such wide authority to one partner, to bind another by contract or otherwise.

c. Ostensible Partnership - or partnership by estoppel or one which in reality is not a

partnership, but is considered a partnership only in relation to those who, by their
conduct or admission, are precluded to deny or disprove its existence.

d. Secret Partnership - or one wherein the existence of certain persons as partners is not
avowed or made known to the public by any of the partners.

e. Universal Partnership - or one which refers to all the present property or to all profits.

f. Partner’s interest in a partnership –

g. Profit –
h. Surplus –
i. Partnership Capital - represents the aggregate of the individual contributions made by
the partners in establishing or continuing the partnership. Moreover, it is constant – it
remains unchanged as the amount fixed by agreement of the partners, and is not
affected by fluctuations in the value of partnership property, although it may be
increased or diminished by unanimous consent of the partners.

2. What are the essential features of a partnership contract? Explain each briefly.
3. Explain and illustrate: “A partnership is a juridical person.”
4. Give the cases when a person who is not a person who is not a partner has a right to share
in the profits of a partnership.
5. Explain the importance of giving publicity to the articles of partnership.
6. Give effects where a partnership is formed for an unlawful purpose.
7. What are the property rights of a partner in a partnership?
8. What are the only rights acquired by an assignee or transferee of a partner who conveys all
his interests in a partnership, if any?
9. What is considered as the extent of a partner’s interest in a partnership?
10. Explain or state briefly the rule or reason for your answers:
a. Anton, Berna, and Charlie formed a partnership to which they contributed a total
capital of P30,000.00. The partnership is not registered with the Securities and
Exchange Commission. Does the partnership have a juridical personality?

YES, the partnership has a juridical personality as provided under Article 1768
which expressly provides that even in case of failure to comply with the
requirements of Article 1772, with reference to the execution of a public instrument
and registration of the same with the Securities and Exchange Commission in
cases when the partnership capital exceeds P3,000.00, such partnership acquires
juridical personality.

b. Suppose the partners in situation (a) agreed on the sharing of profits but not of
losses. Is there a valid partnership?
 YES, there is a valid partnership because agreement as to the system of sharing is
not necessary between the partners. The essence of a partnership is that the
profits and losses arising form the undertaking will be shared between and among
the partners. However where a partnership has been validly created, a subsequent
stipulation which excludes one or more partners from any share in the profits (or
losses) will not affect its existence. Only the stipulation is void.

c. Suppose among the purposes of the partnership in situation (a) is the promotion of
social and religious ends. Will this prevent the creation of a valid partnership in
view of Article 1767?

YES. For a partnership to be valid there must be a valid contract. Partnership is a

form of voluntary association entered into by the associates. Partnership,
therefore, excludes from its concept all other associations which do not have their
origin in a contract, express or implied. Religious societies, conjugal or community
partnership, and others of a similar nature are not therefore, included as they are
not created by the expressed or implied contract of the parties.

NO. Article 1767 provides that there must be an intention of dividing the profit
among the partners therefore the object of the contract of partnership must be for
profit and not merely for common enjoyment. However, pecuniary profit need not
be the only aim; it is enough that it is the principal purpose. Thus, other ends – like
social, moral or spiritual objectives – may also properly exist.

d. Suppose the partnership in situation (a) was orally formed without the contract
being put in writing signed by the partners. Is the contract of partnership valid?

YES, As a general rule, no special form is required for the validity or existence of
the contract of partnership. The contract may be made orally or in writing
regardless of the value of the contributions unless immovable property or real
rights are contributed. Since there is no real property contributed in the instant
case, the partnership orally formed is valid.

e. Neo donated a condominium unit to Anton, Berna, and Charlie who agreed among
themselves to lease it to William and share in the rentals. Are Anton, Berna, and
Charlie partners?

No. Where immovable property, regardless of its value, is contributed, the failure to
comply with the requirements provided in Article 1773 that is the contract must be
in a public instrument and an inventory of the property contributed must be made,
signed by the parties, and attached to the public instrument will render the
partnership contract void in so far as the contracting parties are concerned.

f. Suppose Anton, Berna, and Charlie are partners in a partnership which owns a
parcel of land. May Anton transfer his right as a partner to said property to Berna?

NO. Article 1181(2) states that a partner’s right in specific partnership property is
not assignable except in connection with the assignment of rights of all the
partners in the same property. The rationale behind this rule is that it is impossible
to determine the extent of his beneficial interest in the property until after the
liquidation of partnership affairs.