Elnas:
Duwai ko bi, ako pusta. Daog ka, tunga ta. Pildi, ako ray pilde. Are we
3 essential elements of contract: consent, object, and consideration.
In contract of partnership, the phrase two or more persons agree to bind
themselves represents the element of consent; to contribute money, property,
or industry to a common fund is the element of object; with the intention of
dividing the profits among themselves is element of consideration.
Can anyone be a partner?
- Under the Civil Code, there is no express prohibition of who are those
that cannot be a partner. So, the general prohibition pertaining to a
person that cannot enter into a contract applies minor and insanity.
Villabas:
Can a minor enter into a contract of partnership? If so, what can he contribute?
- Yes, as long as the minor is under guardianship. Minor can also own a
property if he is a donee.
Situation: A landowner contributed a land while a monied guy spent for the
construction of a house. They both lived together. Are they partners?
- No. They are co-owners. Dividing the house is not a profit, it is just a
result of their contribution.
Babiera:
Distinguish co-ownership with partnership
Co-ownership exists when the ownership of an undivided thing or right belongs
to different persons. The ff. are their distinctions:
a. Creation Co-ownership is generally created by law. It may exists even
without a contract but partnership is always created by a contract,
either express or implied.
b. Juridical personality a partnership has a distinct and separate juridical
personality with its partners while co-ownership has none.
c. Purpose partnership is intended for the realization of profits while co-
ownership is the common enjoyment of a thing
d. Effect of death the death of a partner results the dissolution of the
partnership while death of the co-owner does not necessarily dissolve
the partnership.
Situation: If you are a good player of mahjong, someone will approach you:
partners?
- Since mahjong is a form of gambling, it is an illegal act for it is against
public policy. Thus, under the Civil Code, if the object of the partnership
is unlawful, such partnership is void. Even though all the elements of
partnership are present, the partnership still does not exist because it
is founded on an illegal act.
Naingue:
What are the principles by which every contract must comply?
a. Liberality of contracts Parties have the freedom to stipulate whatever
they want provided such stipulation is not contrary to law, morals,
public policy or common good.
b. Consensuality of contracts Stipulation by the parties are perfected by
mere consent. This consent may either be express or implied.
Cabading:
Is contract of partnership absolutely consensual?
- No. Consensuality is only the general rule. There are, however, some
exceptions to this rule. These exceptions make the contract of
partnership a formal contract. First is when the contribution of money
is more than 3,000 pesos; second is when an immovable or a real right
has been contributed to the common fund; third is when it falls under
statue of frauds.
c. Privity of contracts The contract shall bind only those who are privy,
those who have expressed their consent to the contract itself.
d. Mutuality of contracts The contract must bind both the contracting
parties; its validity or compliance cannot be left to the will of one of
them.
Ibarra:
Description of contract of partnership:
1. Consensual perfected by mere consent
2. Nominate it has a special name under the law
3. Bilateral it is entered into by two or more persons
4. Onerous parties contribute something to a common fund
5. Commutative the undertaking of each of the partner is considered
equivalent with that of the others
6. Principal not dependent upon the validity of other contracts
 Situation: Mr. Big Boy and Mr. Small Boy both contributed a 10-hectare Rights of an owner:
lands to a common fund. They both decided to live together as a couple.
Are they partners? 1. Right to possess: jus possidendi
2. Right to dispose: jus disponendi
- The most essential element of partnership is the contribution to a 3. Right to fruits: jus fruendi
4. Right to use: jus utendi
common fund and the community of interests in the profits and
lossess. In this case, the couple failed to stipulate as to the division of
Every partner can opt to contribute either of the four rights of an owner.
their profits.
Powao:
Langomez:

A and B entered into a contract of partnership. How many persons will there be?
Situation: Assuming that Mr. A approached the couple and decided to rent
the entire property, an income has already been realized through the
- There are three persons. The first two are A and B. They are natural
rentals. Does this make the couple partners already?
persons. The third person is the partnership itself since it has its own
separate personality. It is a juridical person.
- There is no specific intention from the couple to be partners. The
sharing of their profits was not in the context of partnership, but in the
Distinguish natural from juridical person.
context of personal relationships. This is the concept of Conjugal
Partnerships of Gains.
- Natural persons are those created by God through the intervention of
parents; while juridical persons are those created by law.
Partnership vs Conjugal Partnerships of Gains (CPG)
Lim and Sarucam:
Parties partnership is a voluntary agreement of two or more partners
belonging to either sex, while CPG arises between a man and a woman.
Rights of natural and juridical persons:

Laws which govern partnership is governed by the stipulations of the parties

Natural persons have civil and political rights
while CPG is governed by law.
Civil rights Right to life, liberty and property; right to enter
Juridical personality partnership has a separate personality while CPG has
into contract; right to manage property
none.
Political rights right to vote and be voted upon; freedom of
Purpose Partnership is to obtain profits while CPG is to regulate the property
religion; right to travel and abode; due process of law; right
relation of the married couple.
against illegal search and seizure; right to counsel

Distribution of profits Partners divide the profits in proportion to their

Juridical persons have the right to property, right against illegal search and
contribution while couples divide the profits equally.
seizure, right to remain silent, right to due process of law, right to equal
protection of the law.
Situation: A and B are looking for a space for their business: A to
operate a vulcanizing shop while B to operate a bicycle repair shop. Both of
However, not all rights can be enjoyed by a juridical person. It has no right to
them rented the space owned by C. but their respective businesses were not
vote or be voted upon, no right to life and liberty, no right against involuntary
doing well. X wanted to open a restaurant and so asked both A and B to rent
servitude.
their respective spaces. X will pay both A and B more than what they earn from
their business. X is now in possession of the space. Both A and B receive rentals Tanggor:
from X. Are they partners?
What are the formalities in a contract of partnership?
- They are not partners, but they are co-possessors. Co-possession
exists whenever the possession of an undivided thing belongs to
different persons.
 1. If there is a contribution of money of more than 3000 pesos, this
undertaking should be written in a public instrument and be recorded
in the office of SEC.
2. If an immovable or real rights have been contributed, this should be
written in a public instrument regardless of the value. An inventory of
the property is also required to be attached to the instrument. This
should also be registered with the RD.
3. Those falling under Statues of fraud.

Situation: A contributed a land and B a money so that they could venture to

a fishpond business. Is this partnership consensual?

- No. Since an immovable was contributed, it should comply with the

requisites provided under the law.

What if A did not own the land rather he just leased it to the real owner,
does this need a formality?

- No. the law provides that the partners must be the one contributing the
real property. Moreover, in this case, no real right was involved since A
only leased the land.

What is the effect if the requirements are not complied with?

- With regard to the immovable property, the partnership is void. But

with other formalities such as the contribution of more than 3000,
partnership would still exist.

Ybanez and Palma:

What are the indications/incidents of a partnership?

- Partners share in profits and losses

- They have equal rights in the management of the business
- Every partner is an agent of the partnership and entitled to bind the
other partners by his act
- Fiduciary relations exist between the partners