Partnership and Trust Bar Questions

PARTNERSHIP and TRUSR BAR EXAM Partnership (2009 Bar Question  TRUE or FALSE. FALSE. An oral partnership is valid. SU!!ESTE" ANS#ER$  TRUE. Partnership Partnership is is a consensual consensual contract, hence, it is valid even though not in writing. AN%THER SU!!ESTE" ANS#ER$  TRUE. An oral oral contract of of partnership partnership is valid even though not in writing. However, if it involves contriution of an i!!ovale propert" or a real right, an oral contract of partnership partnersh ip is void. #n such a case, the contract of partnership to e valid, !ust e in a pulic instru!ent $Art. %&&%, '((), and the inventor" of said propert" signed " the parties !ust e attached to said pulic instru!ent $Art. %&&*, '((.). AN%THER SU!!ESTE" ANS#ER$  TRUE. Partnership Partnership is is a consensual consensual contract, hence, it is valid even though not in writing.  The oral contract contract of partnership partnership is also also valid even if an i!!ovale propert" or real right is contriuted thereto. +hile the law in such a case, reuires the partnership to e in a pulic docu!ent, the law does not e-pressl" declare the contract void if not e-ecuted in the reuired for! $Article %/01&2, '((). And there eing nothing in the law fro! which it can e inferred that the said reuire!ent is prohiitor" prohiitor" or !andator" $Article 3, '((), the said oral contract of partnership !ust also e valid. The interested part" !a" si!pl" reuire reuire the contract to e !ade into a pulic docu!ent in order to co!pl" with the reuired for! $Article %*3&, '((). The purpose of the law in reuiring a pulic docu!ent is si!pl" to notif" the pulic aout the contriution. contriution. (&99' Bar Question %. (an two cor corpora porations tions org organi4 ani4e ea general partnership under the (ivil (ode of the Philippin Philippines5 es5 6. (an a corpor corporatio ation n and and an ind individu ividual al for! a general partnership5 SU!!ESTE" ANS#ER$ %.

a. 'o. A corpor corporatio ation n is !ana !anaged ged " " its oard of directors. #f the corporation were were to eco!e a partner, co7partners would have the power to !a8e the corporation part" to transactions in an irregular !anner since the partners are not agents su9ect to the control of the :oard of ;irectors. :ut a corporation !a" enter into a cers of the corporatio corporation. n. However, a corporation !a" for! a general partnership with another corporation or an individual provided the following conditions are !et? %) The Articles of #ncorporatio #ncorporation n of the corporation e-pressl" allows the corporation to enter into partnerships@ 6) The Articles of Partnership !ust provide that all partners will !anage the partnership, and the" shall e 9ointl" and severall" liale@ and *) #n case of a foreign corporation, it !ust e licensed to do usiness in the Philippines. c.

'o. A corp 'o. corpora oratio tion n !a" !a" not not e a general partner ecause the principle of !utual agenc" in general partnership allowing the other general partner to ind the corporation will violate the corporation law principle that onl" the oard of directors !a" ind the corporation.

Pae ) &

PARTNERSHIP and TRUSR BAR EXAM 6. 'o, for the sa!e reasons given in the Answer to 'u!er 6 aove.

(&9** Bar Question ;istinguish co7ownership fro! partnership. SU!!ESTE" ANS#ER$ (o7ownership is distinguished fro! an ordinar" partnership in the following wa"s? $%) As to creation? +hereas co7ownership !a" e created " law, contract, succession, fortuitous event, or occupanc", partnership is alwa"s created " contract. $6) As to purpose? +hereas the purpose of  co7ownership is the co!!on en9o"!ent of the thing or right owned in co!!on, the purpose of a partnership is to otain prots. $*) As to personalit"? +hereas a co7 ownership has no 9uridical personalit" which is separate and distinct fro! that of the owners, a partnership has. $) As to duration? +hereas an agree!ent not to divide the co!!unit" propert" for !ore than ten "ears is not allowed " law such an agree!ent would e perfectl" valid in the case of partnerships. This is so, ecause under the law, there is no li!itation upon the duration of partnerships. $3) As to power of !e!ers? +hereas a co7owner has no power to represent the co7ownership unless there is an agree!ent to that eBect, a partner has the power to represent the partnership, unless there is a stipulation to the contrar". $=) As to eBect of disposition of shares? #f a co7owner transfers his share to a third person, the latter eco!es auto!aticall" a co7owner, ut if a partner transfers his share to a third person, the latter does not eco!e a partner, unless agreed upon " all of the partners. $&) As to division of prots? +hereas in co7 ownership the division of the enets and charges is -ed " law, in a partnership the division of prots arid

losses !a" e su9ect to the agree!ent of the partners. $C) As to eBect of death? +hereas the death of a co7owner has no eBect upon the e-istence of the co7 ownership, the death of a partner shall result in. the dissolution of the partnership.

Rihts and %+,iations o- Partners A.on The.se,/es (20&2 Bar Question A partner cannot de!and the return of his share $contriution) during the e-istence of a partnership. ;o "ou agree5 E-plain "our answer. SU!!ESTE" ANS#ER$  Des, he is not entitled to the return of his contriution to the capital of the partnership, ut onl" to the net prots fro! the partnership usiness during the life of the partnership period. #f he is a li!ited partner, however, he !a" as8 for the return of his contriutions as provided in Art %C3= and %C3&, (ivil (ode. (20&0 Bar Question A, :, and ( entered into a partnership to operate a restaurant usiness. +hen the restaurant had gone past rea87even stage and started to ga!er considerale prots, ( died. A and : continued the usiness without dissolving the partnership. The" in fact opened a ranch of the restaurant, incurring oligations in the process. (reditors started de!anding for the pa"!ent of their oligations. +ho are liale for the settle!ent of the partnerships oligations5 E-plain5

SU!!ESTE" ANS#ER$  The two re!aining partners, A and :, are liale. +hen an" partner dies and the usiness is continued without an" settle!ent of accounts as etween hi! or his estate, the surviving partners are held liale for continuing the usiness despite the death of ( (Articles 1841, 1785, par. 2, and 1833 of the e! Civil Code". Pae ) 2

PARTNERSHIP and TRUSR BAR EXAM (200& Bar Question