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Week 2 - General Provisions & Kinds of Partnership

The document distinguishes partnerships from co-ownership, conjugal partnerships of gains, voluntary associations, and contracts of employment, highlighting their definitions, purposes, formations, management, profit sharing, and durations. It also includes case digests of various rulings that clarify the legal implications of partnerships in different scenarios. The cases illustrate the principles of partnership liability, tax implications, and asset ownership within partnerships.

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12 views5 pages

Week 2 - General Provisions & Kinds of Partnership

The document distinguishes partnerships from co-ownership, conjugal partnerships of gains, voluntary associations, and contracts of employment, highlighting their definitions, purposes, formations, management, profit sharing, and durations. It also includes case digests of various rulings that clarify the legal implications of partnerships in different scenarios. The cases illustrate the principles of partnership liability, tax implications, and asset ownership within partnerships.

Uploaded by

arrvrr13
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Ramirez, Jann Simone River V.

COBLAW2 – C38B

I.​ Distinguish Partnership from: Co-ownership, Conjugal Partnership of


Gains, Voluntary Association, and Contract of Employment

Aspect Partnership Co-ownership Conjugal Voluntary Contract of


Partnership Association Employment
of Gains

Definition Contract Relationship Property Group Contract


where two where regime organized where
or more multiple between for common employee
persons persons own spouses non-profit renders
contribute property with placing in purpose. service to
money, undivided common employer
property, or interests. their under
industry to a profits, supervision
common income, for
fund with and fruits compensati
intent to of on.
divide separate
profits. properties.
Purpose Profit-makin Ownership Economic Civic, Performanc
g and and support religious, e of
business enjoyment of and educational services in
operation. property. security for or other exchange
the family. non-profit for wages.
objectives.
Formation By By contract, By By By
express/impl succession, operation agreement employmen
ied contract law, or of law among t agreement
with intent to chance upon members establishing
form without marriage. with employer-e
business business registration mployee
and share intent. requirement relationship
profits. s .
Management Equal rights Independent Joint By elected Exclusive
among use by administrat officers or control by
partners co-owners ion by both as specified employer
unless without spouses; in bylaws. over means
otherwise prejudicing important and
agreed. others' transaction methods of
Partners act interests. s require work.
as agents of mutual
partnership. consent.
Profit According to Proportionat Equal Not Fixed
Sharing agreement e to benefit to necessary salary/wage
or equally if ownership both as it may s
none. interests. spouses not involve regardless
Incidental, regardless profit at all. of
not of employer's
essential. contributio profit/loss.
n.
Duration Fixed term, Until During Until For
particular partition or marriage dissolved specified
undertaking, property until by member period or at
or at will transfer. dissolution vote, will, subject
(dissolvable by death, purpose to labor
by any annulment, accomplish laws.
partner). separation, ed, or by
or regime law.
change.

II.​ Case Digests

G.R. No. 136448 (1999)


Lim Tong Lim v. Philippine Fishing Gear Industries, Inc.

FACTS:
Antonio Chua, Peter Yao, and Lim Tong Lim collaborated in a fishing business under
the name "Ocean Quest Fishing Corporation," which was never formally registered.
Chua and Yao purchased fishing nets on credit and failed to pay, prompting a lawsuit
from the supplier. Lim argued he shouldn't be liable since he didn’t sign the purchase
contract.

ISSUE:
Whether Lim Tong Lim can be held liable for the partnership’s debt despite not
signing the credit contract.

RULING:
Yes. The Court ruled that a partnership existed based on their shared contributions
and profit-sharing intent, making Lim jointly liable for obligations incurred for the
business.
G.R. No. 112675 (1999)
AFISCO Insurance Corporation v. Court of Appeals

FACTS:
A group of non-life insurance companies formed a pool to collectively manage
risk-sharing treaties. The BIR assessed the pool for taxes, arguing it was an
unregistered partnership conducting business for profit. The companies contested,
claiming the pool wasn’t a taxable entity.

ISSUE:
Whether the insurance pool constituted a taxable partnership under Philippine tax
law.

RULING:
Yes. The Court found the pool had elements of a partnership—such as a common
fund and profit motive—making it taxable like a corporation.

G.R. No. 109248 (1995)


Ortega v. Court of Appeals

FACTS:
Teodoro Ortega invested capital and equipment in a logging venture with Elias
Manigbas, who applied for a timber license in his own name. After business
operations started, Manigbas excluded Ortega and formed new agreements with
others. Ortega filed a case to assert his rights as a partner.

ISSUE:
Whether a partnership existed between Ortega and Manigbas even though the
timber license was solely in Manigbas’s name.

RULING:
Yes. The Court held that their agreement showed mutual contributions and intent to
share profits, which are key indicators of a valid partnership, making the license
ownership irrelevant.
G.R. No. 75875 (1989)
Aurbach v. Sanitary Wares Manufacturing Corp.

FACTS:
Foreign and local investors in a corporation had a shareholders’ agreement
regarding board composition and management. Aurbach later acquired a majority of
shares and changed the board. The other shareholders claimed this breached their
earlier agreement.

ISSUE:
Whether the shareholders’ agreement created a partnership that limited Aurbach’s
right to exercise control as majority stockholder.

RULING:
No. The Court ruled that the agreement regulated shareholder relations within a
corporation, not a separate partnership, so Aurbach's actions were valid under
corporate law.

G.R. No. L-33580 (1931)


Sancho v. Lizarraga Hermanos

FACTS:
Sancho and Lizarraga formed a partnership where Sancho invested capital and
Lizarraga would manage the business. Sancho later sued for rescission and
reimbursement after Lizarraga failed to contribute his share. The court ordered
liquidation instead.

ISSUE:
Whether Sancho was entitled to reimbursement and rescission of the partnership
due to Lizarraga’s non-compliance.

RULING:
No. The Court found that rescission was premature since liquidation had not been
completed, and specific partnership rules governed over general contract law
provisions.
G.R. No. L-24968 (1981)
Saura v. Saura

FACTS:
Brothers Delfin and Emilio Saura were partners in a business, but Emilio began
acquiring assets under his name using partnership resources. Delfin filed suit for
accounting, dissolution, and his rightful share.

ISSUE:
Whether assets acquired in Emilio's name using partnership resources are
considered part of the partnership.

RULING:
Yes. The Court held that Emilio held those assets in trust for the partnership, and
Delfin was entitled to an accounting and his proportional share since no formal
dissolution had taken place.

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