ARELLANO UNIVERSITY SCHOOL OF LAW

AGENCY, TRUSTS AND PARTNERSHIP

By: Atty. Wayne A. Tugadi, CCO, LL.M

[email protected]

A. LAW ON PARTNERSHIP

I. Introduction

1. Definition and concept as a medium for economic and business activity

2. Advantages and disadvantages of partnership from a business perspective
3. Law on partnership, then and now
4. Creation of a contract; its elements

II. Art. 1767 – 1770, Civil Code

1. Definition and elements

a. Case: Sunga-Chan vs. Chua, G.R. No. 143340, Aug. 15, 2001
2. Doctrine of delectus personae and mutual agency
3. Partnership as a juridical entity; rights as such
4. Who can form partnerships?
5. Can a corporation become a member of a partnership?
b. Case: Mendiola vs. CA, G.R. No. 159333, July 31, 2006
6. Test and rules in determining the existence of a partnership
7. Effects of an unlawful partnership

III. Art. 1771 – 1775, Civil Code

1. Form of partnership
2. When a partnership should be in writing

IV. Cases:

1. Heirs of Tan AngKee vs. Court of Appeals, G.R. No. 126881, October 3, 2000
2. Tocao vs. Court of Appeals, G.R. No. 127405, October 4, 2000
3. Pascual vs. CIR, L-78133, October 18, 1988
4. Mendiola vs. Court of Appeals, G.R. No. 159333, July 31, 2006
5. WolfangAurbach vs. Sanitary Wares, G.R. No. 75875, December 19, 1989
6. Benjamin Yu vs. NLRC, G.R. No. 97212, June 30, 1993
7. Rojas vs. Maglana, G.R. No. 30616, December 10, 1990
V. Art. 1776 – 1783, Civil Code

1. Classifications of partnership:
a. as to the extent of its subject matter;
b. as to liability of the partners;
c. as to its duration;
d. as to the legality of its existence;
e. as to representation to others;
f. as to publicity;
g. as to purpose.
2. Kinds of partners
3. Universal partnership
4. of all present property (what it includes)
5. of all profits (what it includes)
6. persons prohibited from entering into a universal partnership; exceptions
a. Case: CIR vs. Suter, 27 SCRA 152 (1969)
8. Particular partnership

VI. Art. 1784 – 1799, Civil Code

1. Commencement of partnership
2. Continuation of a partnership beyond its term
• Case: Benjamin Yu vs. NLRC, G.R. No. 97212, June 30, 1993.
3. Partners as debtors of the partnership
• Case: Rojas vs. Maglana, G.R. No. 30616, Dec. 10, 1990
4. Obligation with respect to the partnership capital
5. Liability to pay interest; criminal liability
6. Restrictions imposed on industrial partner
7. Remedies against erring industrial partner
8. Restrictions imposed on capitalist partner (See also Art. 1808)
9. Remedies against erring capitalist partner
10. Rules on sharing in and distribution of profits and losses
11. Duty of managing partner to hold and apply sums collected (for credits
owing to him and to the partnership) in proportion to both obligations.
12. Partner's liability in case of damage caused to the partnership, due to
his fault; how equitably reduced
13. Risk of loss of things contributed

VII. Cases:

1. Tai Tong Chuache vs. Insurance Commission, L-55397, February 29, 1988
2. Mendiola vs. Court of Appeals, G.R. No. 159333, July 31, 2006
3. Information Technology vs. COMELEC, G.R. No. 159139, January 13, 2004
4. Mobil Oil vs. CFI of Rizal, G.R. No. 40457, May 8, 1992
5. Lim Tong Lim vs. Phil. Fishing Gear, G.R. No. 136448, November 3, 1999
6. Ortega vs. Court of Appeals, G.R. No. 109248, July 3, 1995
7. Dan Fue Leung vs. IAC, G.R. No. 70926, January 31, 1989
 8. Emnace vs. Court of Appeals, G.R. No. 126334, November 23, 2001

VIII. Art. 1800 – 1809, Civil Code

1. How a managing partner may be appointed

2. How his appointment revoked
3. Powers of managing partner
4. Powers of two or more managing partners whose respective duties are not
specified
5. When unanimity of action required
6. When there is no stipulation on the management of the partnership
7. Contract of sub-partnership
8. Rules governing partnership books
9. Duty of full disclosure (See also Art. 1821)
10. Right to formal accounting

IX. Art. 1810 – 1814, Civil Code

1. Right to specific partnership property

2. Interest in the partnership
3. Conveyance or assignment of a partner's interest
4. Right to participate in the management
a. Case: Realubit vs. Jaso, G.R. No. 178782, September 21, 2011

X. Art. 1815 – 1827, Civil Code

1. Liability for contractual obligations

2. Liability arising from partner's tort or breach of trust
3. Criminal liability of partnership
4. Partnership by estoppel
a. Case: Guy vs. Gacott, G.R. No. 206147, January 13, 2016

XI. Art. 1828 – 1842, Civil Code

1. Definition and distinctions between dissolution and winding up

2. Causes of dissolution
3. When an assignee or purchaser may ask for judicial dissolution
4. When a partner can still bind the partnership after dissolution
5. What is the procedure for winding up or liquidation of assets
6. When a partner may be liable to partnership obligations with his own
property
a. Case: Villareal vs. Ramirez, G.R. No. 144214, July 14, 2003

XII. Art. Art. 1843 – 1867, Civil Code

1. Definition of limited partnership

2. Characteristics and distinctions with general partnership
 3. Rights of a limited partner
4. Liabilities of a limited partner
5. Substituted limited partner
6. Transactions between limited partner and the partnership

B. LAW ON AGENCY

I. Introductory Concepts

1. Definition; Elements
2. Parties to a contract of agency
3. Agency as a means of allowing persons to do indirectly what may be done
indirectly
1. or to do through another what may be done personally; Exceptions
4. Doctrine of imputed knowledge or liability

II. Form of a contract of agency

Case: Alcantara vs. Nido, G.R. No. 165133, April 19, 2010

III. Agency by estoppel

IV. General and Special Power of Attorney

Cases:

1. Absolute Management vs. Metrobank, G.R. No. 190277, July 23, 2014
2. Gozun vs. Mercado, G.R. No. 167812, December 19, 2006
3. Bravo-Guerrero vs. Bravo, G.R. No. 152658, July 29, 2005

V. Obligations of the Principal and the Agent

VI. Contracting with the principal and the agent; Rule

VII. Modes of Extinguishment of Agency

1. Common causes under Art. 1919; Other causes

2. Rule on Confidentiality
3. Irrevocable agency and agency coupled with interest; how revoked
4. Continuing agency, implied agency or agency by operation of law

VIII. Cases:

1. San Juan Structural vs. Court of Appeals, G.R. No. 129459, September 29,
1998
2. Tuazon vs. Ramos, G.R. No. 156262, July 14, 2005
3. Manila Memorial Park vs. Linsangan, G.R. No. 151319, November 22, 2004
4. Air France vs. Court of Appeals, L-57339, December 29, 1983
5. Sunace International vs. NLRC, G.R. No. 161757, January 25, 2006
 6. Fieldman's Insurance vs. Songco, L-24833, September 23, 1968
7. New Life Enterprises vs. Court of Appeals, G.R. No. 94071, March 31, 1992
8. Manila Remnant Co. vs. Court of Appeals, G.R. No. 82978, November 22,
1990
9. Fontanilla vs. Maliaman, G.R. No. 55963, December 1, 1989
10. People vs. Chowdury, G.R. Nos. 129577-80, February 15, 2000
11. First Philippine Int'l Bank vs. Court of Appeals, G.R. No. 115849,
January 24, 1996
12. Republic vs. Evangelista, G.R. No. 156015, August 11, 2005
13. Sevilla vs. Court of Appeals, 160 SCRA 171 (1988)

C. LAW ON TRUST

I. Definition and Types

Cases:

a. PNB vs. Court of Appeals, G.R. No. 97995, January 21, 1995
(difference between solutio indebiti and constructive trust)

II. Parties to a Trust

III. Effect of trust relationship on trust property

1. legal ownership
2. beneficial ownership
3. administration

IV. Implied Trusts

1. constructive trusts vs. resulting trusts

V. Prescriptive period of actions arising from trusts

VI. Cases:

1. Yap vs. Court of Appeals, G.R. No. 133047, August 17, 1999
2. Tala Realty Services vs. Banco Filipino, G.R. No. 137533, November 22, 2002
3. Buan vda de Esconde vs. Court of Appeals, G.R. No. 103635, February 1,
1996
4. Lopez vs. Court of Appeals, G.R. No. 157784, December 16, 2008
5. Heirs of Labiste vs. Heirs of Labiste, G.R. No. 162033, May 8, 2009
6. Ringor vs. Ringor, G.R. No. 147863, August 13, 2004
7. Ty vs. Court of Appeals, G.R. No. 112872, April 19, 2001
8. GSIS vs. Santiago, G.R. No. 155206, October 28, 2003
9. Aniceto Uy vs. Court of Appeals, G.R. No. 173186, September 16, 2015