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Partnership Naming and Liability Rules

This article discusses the obligation of partners regarding third parties. It states that every partnership must operate under a firm name, which may include the name of one or more partners. Those who are not partners but have their names included in the firm name will be subject to the same liability as a partner. The article also outlines restrictions on misleading or deceptive firm names and the use of deceased persons' names. It indicates that non-partners should not have their names in the firm name to avoid deceiving the public about their partner status.
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0% found this document useful (0 votes)
299 views9 pages

Partnership Naming and Liability Rules

This article discusses the obligation of partners regarding third parties. It states that every partnership must operate under a firm name, which may include the name of one or more partners. Those who are not partners but have their names included in the firm name will be subject to the same liability as a partner. The article also outlines restrictions on misleading or deceptive firm names and the use of deceased persons' names. It indicates that non-partners should not have their names in the firm name to avoid deceiving the public about their partner status.
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SECTION 3: OBLIGATION OF THE PARTNERS REGARD TO THIRD PERSON

Article 1815:

Every partnership shall operate under a firm name, which may or may
not include the name of one or more of the partners.

Those who, not being members of the partnership, include their names
in the firm name, shall be subject to the liability of a partner.

Ineexplain sa FIRST PARAGRAPH

FIRM

-As the name, title or style under which a company transacts business.

Basically, yun yung pangalan or identity ng isang entity/business.

So bakit mahalaga yung pagkakaroon ng firm?

-To distinguish the partnership which has a distinct and separate juridical
personality.

- Yun yung importance ng pagkakaroon ng firm name ng isang partnership.


Para magkaroon siya ng sariling identity. Syempre kapag wala kang
pangalan, wala ka rin identity for yourself. So giving the part of partnership
yung firm name is yun yung nagbibigay sa partnership ng identity that is
distinct and separate from the partner.

So may legality effects ang pagbibigay ng pangalan sa isang firm.

 Right of the partner to choose firm name

Kase yung mga partners malaki yung freedom nila to choose any firm name
ng kanilang partnership. Pero, may mga certain restriction din.

1. USE OF MISLEADING NAMES


- Yung partnership pwede siyang magadopt ng any name it wishes kase
nga malaki yung freedom nila to choose a partnership name. As long
as hindi siya identifical. So ayon, restriction yon. With or deceptively
similar to a name which previously adopted by another entity or
contrary to the law.

For example:

May Jollibee na tapos papangalanan mo yung form mo ng Jullibee. So your


basically deceiving other person. Kasi related yon kay Jollibee. Which is hindi
pwede.

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So ibig sabihin bawal kopyahin, similar or identical sa pangalan ng isang
establish entity kase you are deceiving the public in that case or contrary sa
law.

2. USE OF NAMES OF DECEASED PERSON


- Kapag deceased partneryan or may kaso sa supreme court.

For example:

Gusto ng mga remaining partners na yung pangalan ng namatay na partner


will remained sa pangalan ng partnership. Kasi diba kapag namatay yung
isang partner, madidisolve na yung partnership then if plan ng mga
remaining partners na i-continue yung business then it will form a new
partnership.

Now in this case kase, gusto ng mga remaining partners is to retained the
name of deceased person kase kunware sikat siya, reliable and kilala siya sa
pagiging magaling niya, tapos kapag ilalagay mo yon sa pangalan ng
partnership mo of course ang perspective or iisipin ng ibang tao na associate
ang kanyang pangalan sa partnership. Baka maganda yung partnership na
ito.

Pero sbai ng Supreme Court bawal. You cannot use the name of a deceased
person. When you formed another partnership when you continue the
partnership.

GENERAL RULE

-yung partners are free to used any names except yung paggamit ng
misleading names and name of deceased person.

SABI NAMAN SA SECOND PARAGRAPH

Those who, not being members of the partnership, include their names
in the firm name, shall be subject to the liability of a partner.

- Baket? Syempre youre not a partner tapos andyan yung pangalan mo


sa partnership. Your deceiving the public. Parang sinasabi na you are a
partner kahit in reality is hindi naman.

For example:

Poncio Pilato, Pedro, Juan Dela Cruz, Partnership and Company. Now from
that a law, essentially nasabi mo na “Uy may Juan Dela Cruz sa

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partnership baka partner siya, that Juan Dela Cruz you can simply say na
ikaw yon pag ganon or basically deceiving the public na pangalan mo is
nasa partnership pero in reality hindi ka naman partner.

So in that case, marerefer mo yung tao na yon as deceased person. Kase


for example may mga partnership na “Santos”, Santos, Dela Vega.
Syempre maraming Santos sa Pilipinas alangan namang iheld mo ng
accountable lahat ng Santos sa Pilipinas kase yung isang Santos, may
Santos sa isang pangalan ng partnership.

Of course that’s not the case. We are trying to refer is para mapin point
mo yung pangalan ng nasa pangalan ng partnership name is disperson.
Hindi porket may Santos sa pangalan ng partnership sasabihin mo lahat
ng Santos sa Pilipinas is magiging liable na. Syempre, hindi. Basta yung
pangalan ng nasa partnership, mapipin point mo na etong tao na to is
deceased person then that person will be subjected to the second
paragraph.

So PAANO?

-Since hindi talaga siya partner at the first place that person will not
acquire the rights of the partner. Dun papasok yung delectus personae-
which no one can become a partnership, without the consent of each
other.

-Second, wala na nga siyang rights na makukuha, it shall be subjected


partnership to the liability of a partner insofar as third person without
notice. Wala siyang rights na makukuha kase hindi naman talaga siya
partner at the first place but he can be held liable to third person.

TAKE NOTE:

-Third person without notice, ibig sabihin eto yung mga third personal na
hindi nila alam na hindi pala siya partner. Pero kunware alam nila na hindi
talaga sila partner then that walang liability kae bad faith yon, aware sila na
hindi sila partner tapos nag-enter sila sa isang obligation or sa isang
contract. Dapat without notice yan, kase when we say without notice, wala
silang idea na hindi sila talaga part ng isang partnership/good faith.

ARTICLE 1816

All partners, including industrial ones, shall be liable pro rata with all their
property and after all the partnership assets have been exhausted, for the
contracts which may be entered into in the name and for the account of the
partnership, under its signature and by a person authorized to act for the
partnership. However, any partner may enter into a separate obligation to
perform a partnership contract. (n)

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-Yung mga partners including yung mga inductrial one magiging liable sila sa
pro-rata.

Liability for Contractual Obligation of the Partnership (eto yung mga


contractual obligation na napasok ni Partnership)

1. Partnership Liability
-So paano ito magiging liability ng partnership? Stated na siya sa first
sentence. Basta yung general rule niya is that a partner has a right to
make all partners liable for contracts he makes for the partnership in
the name and for the account for the partnership. So pinasok ito, in the
name of the partnership. Ibig sabihin yung partnership magoobligee
and magbebenefit and yung partner na ipinasok yung partnership sa
contracts na yon has the right to do so. May karapatan siyang ipasok
yung partnership to that contractual obligation.

So second sentence,
However, any partners may enter into a separate obligation to perform
a partnership contract. So macoconsider siya dun sa pangalawa.

2. Individual Liability
- Kase yung partner may assume a separate undertaking in his name to
perform a partnership contract with a third person.

For example:

-Service yung inooffer. Kunware Cleaning Service yung inooffer ng isang


partnership. Tapos sabi ng isang partner na ako na yung gagawa niyan. He
will undertake that under his name . He will perform that partnership
contract with the person. Kunware siya na yung maglilinis sa garahe, sa loob
ng bahay he will perform that under his name.

So now in that case, that partner who assumed a separate undertaking in his
name to perform a partnership contract. It will make solidary liable to a
partnership contract. It means martir siya.

Kung natatandaan pa natin yung obligation ang contracts before , na yung


solidary obligations ibig sabihin that each every debtor is liable to the whole
obligation while each every creditor can demand the fulfillment of the
obligation. Ayon yung solidary obligations. As supposed to a joint obligation
na kung saan each debtor in only liable for his share tapos yung creditor
naman is only compelled the fulfillment of obligations as to his share. So
meaning kung ano lang yung share nila, dun lang sila may karapatan.

NATURE OF INDIVIDUAL LIABILITY OF PARTNERS

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Liability of partnership, in substance, also the liability of the partners.

-Of course, yung partnership is co-owned by the partners. Yung mga partners
may co-ownership yan sa partnership. Pero hindi yon automatic na
mangyayari. Kase yung liability is either:

1. Pro-Rata

- magiging pro rata siya kase it is equally or jointly. It means proportionately


siya. Pero in essence of law hindi proportionately yung meaning ng pro-rata.

For example:

May limang partner sa isang partnership tapos may liability ang partnership
na yan ng P100,000. Tapos yung isang partner tumakas, hindi niya
babayaran yung kaniyang share dun sa P100,000. Now if we are going to say
na it is proportionately, kawawa yung mga partners kase apat nalang sila. So
yung magiging obligation nila for that P100,000 is P25,000 so hindi yun yung
pinepertain ng law kase apat nalang sila at yung isa is tinakasan niya yung
obligation niya, ipinasa nya yung obligation niya sa isang partner.

Kapag yung pro-rata is stated by the law, it refers equally or jointly. So kahit
tumakas yung isang partner hindi nya babayaran yung kaniyang obligation
yung remaining partners hindi nila sasaluhin yon kapag good faith sila
syempre. So bali P20,000 parin yung kanilang shares. Ayon yung equally or
jointly.

2.Subsidiary or Secondary

-nagiging liable lang ang mga partners kapag naexhaust na mga assets ni
partnership. Hahabulin lang sila kapag naubos na yung assets ni partnership
tapos may natitira pang mga utang. Pero may exceptions, unless yung
partner makes himself solidarily liable to a partnership contract. Hindi
magiging secondary yan kase yung isang partner na naging martir ginawa
niyang solidarily liable siya sa isang partnership contract.

So in particular contract, hindi mahahabol yung isang partners, siya lang.

3. Liability of Industrial Partner


- Sabi nga dun sa article 1816, lahat ng partners magiging liable to third
person kahit na si Industrial one.

As we know nung nadiscuss natin na yung losses lang ang hindi liable. Dun
lang hindi liable si Industrial partner kase gaya nga ng sinabi ko na kapag
losses yan, si Industrial partner ang ininvest niya lang is yung kanyang time
or yung kanyang service.

So sa losses na yon ano yung babawiin don? Syempre wala. Kase action,
service and time hindi monayon mababawi. Kaya yung industrial partner, is

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exempted when it comes sa losses. Pero pagdating sa liability ng partnership
hindi na siya exempted. Kase iba yung losses, iba yung liability.

But TAKE NOTE:

Unless otherwise stipulated, pwede siyang mareimburse ng ibang capitalist


partners. Sinabi siya ng Supreme Court decision na kapag yung isang
industrial partner binayaran niya yung kaniyang liability, syempre may share
siya don it means na obligado siya, unless otherwise stipulated na sa
kanilang agreement, pwede siyang mareimburse ng ibang partners pero
kapag may nakalagay sa kanilang agreement na hindi marereimburse si
Industrial Partner then hindi siya marereimburse ng capitalist partners.

ARTICLE 1817

Any stipulation against the liability laid down in the preceding article shall be
void, except as among the partners.

For example:

Sa partnership agreement nila. Si A, B and C pinagusapan nila na si B kapag


may liability yung partnership exempted siya. Pero in the eyes of the third
person that provision is void. Pwede pa rin mahabol ng third person si B. Pero
in between the partners that provision is valid. Meaning yung mangyayari
irereimburse lang si B. Kahit si B is Capitalist Partner.

ARTICLE 1818

Every partner is an agent of the partnership for the purpose of its business,
and the act of every partner, including the execution in the partnership name
of any instrument, for apparently carrying on in the usual way the business
of the partnership of which he is a member binds the partnership, unless the
partner so acting has in fact no authority to act for the partnership in the
particular matter, and the person with whom he is dealing has knowledge of
the fact that he has no such authority.

An act of a partner which is not apparently for the carrying on of business of


the partnership in the usual way does not bind the partnership unless
authorized by the other partners.

FIRST PARAGRAPH

Meaning lang nyan, in usual carrying business hindi maba-bind si partnership


ng acts ng partner kase as we know that partners are agents of the
partnership.

Yun yung general rule, yung exeption niya is kapag yung partner na yon is
walang authority to act for the partnership in the particular matter at yung
person na kinausap niya o tinransact niya, alam nung person na yon na wala
siyang authority to do so. Then it will not bind the partnership. So magiging
bad faith on his part.

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SECOND PARAGRAPH

- Sinabi sa batas na si partner, na yung partnership yung inooffer


niyang service Is cleaning service, yun yung usually carrying business
but here comes a contract, saying na yung lilinisin nila is kotse. That is
not the usual way of carrying the business of the partnership. So hindi
siya mababind ng partnership pero in such of transaction in cleaning
the car is authorized by other partners. For example sinabi ng other na,
osige linisin total same lang naman siya sa paglilinis. Pwede siya
mabind kase may authorization naman siya from the other partners.

Except when authorized by the other partners or unless they ghave


abandoned the business, one or more but less than all the partners have
no authority to:

1. Assign the partnership property in trust for creditors or on the assignee's


promise to pay the debts of the partnership;

(2) dispose of the good-will of the business;

(3) Do any other act which would make it impossible to carry on the ordinary
business of a partnership;

(4) Confess a judgment;

(5) Enter into a compromise concerning a partnership claim or liability;

(6) Submit a partnership claim or liability to arbitration;

(7) Renounce a claim of the partnership.

(Kase one or more partners generally wala silang authority para gawin to.
Kailangan lahat ng partner mag-agree. Because this seven enumerated
case pertains to ownership.)

However, when such partners are authorized by other partners or they are
abandoned the business, then yung remaining partners can do this act of
dominion or acts of ownership.

GENERAL RULE:

One or more partner hindi nila pwedeng pasukan to. Pero kapag may
authorization ang ibang partners, then yung one or more partners can
enter in this transaction of ownership.

No acts of a partner in contravention of a restriction on authority shall


bind the partnership to person having knowledge of the restriction.

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- Kase third person has knowledge of the restriction. Nakipasok parin
and that is bad faith on the third person so it means it will now bind the
partnership.

Power of Partner as Agent of Partnership

-Absence of Agreement, all partners have equal right in the management


and conduct of the partnership business.

-Kapag walang agreement, syempre. Pero kung may agreement like


managing partner or iba na yung magiging kaso dito.

In the absence of agreement may equal right yung mga partners when it
comes in management and conduct of the partnership.

1. As among themselves
-Since yung mga partners is agent sila ng partnership, it will bind the
partnership.

` 2. As to third person

-when it comes sa third person yung foundation nila is mutual agency.

Mutual agency- basicall pertaining to a partner since he his an agent of a


partnership. So he will bind the other partnership and all the other partner
into the other transactions into that obligation because of mutual agency.
Kasi agent siya e. Representative siya kumbaga.

Third person

- the right to assume that every general partner has power to bind the
partnership. In this case, in favor to sa mga third person.

1. No duty to make inquiries as to acting partners authority

- Basta yung third person any size na yung partnership is goods na. Ayon
lang, hindi na niya kailangan or hindi na sila oblige na imbestigahan na yung
partner ba nato is my authority to transact. Hindi na siya kailangan as long
as that third person is a partner to that partnership.

2. Presumption that acting partner has authority to bind partnership

- Ibig sabihin ang importante lang kase dito na yung partner sa partnership
yung kinakausap ni third person, so parang goods na.

3. No right assume that acting partner has unlimited authority.

- For example, yung partner na to is pwede niyang gawin lahat or ibenta


yung mga acts of dominion/ownership. Ang pwede niya lang i-assume is ung
partners na to yung kinakausap niya may authority siya to transact business.
So ayon lang, wala siyang unlimited authority.

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