Arellano University School of Law

BUSINESS ORGANIZATION I
(Partnership, Agency and Trust)
Atty. Joanne L. Ranada
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Week No. 1
I. PARTNERSHIP
A. General Provisions (Art. 1767-1783)
1. What is a contract of partnership? (Art. 1767)
- Santos vs. Sps. Reyes, 368 SCRA 261
2. Determining factors in the existence of partnership (Art. 1769)
-Heirs of Tan Eng Kee vs. CA, 341 SCRA 740
(citing Evangelista vs. Collector of Internal Revenue, 54 O.G. 996)
-Negado vs. Makabenta, 54 O.G. 4082
-Yulo vs. Yang Chiaco Seng, L-12541, Aug. 28, 1959
3. Distinction between partnership and a private corporation
- 1 Fletcher, Cyc. Corp., Sec. 20
4. Formalities required by law for the organization/constitution of partnership
(Art. 1771, 1772, 1773, 1843)
Week No. 2
5. Different kinds of partnership
a) As to object (Art. 1777, 1778, 1780, 1783)
i.
ii.

Universal Partnership
Particular Partnership

b) As to liability of the partners

i.
General Partnership
ii.
Limited Partnership
6. Different kinds of partners
a) Industrial Partner
b) Capitalist Partner
c) General Partner
d) Limited Partner
e) Managing Partner
f) Silent Partner
g) Ostensible Partner
h) Secret Partner
i) Partner by Estoppel

Week No. 3
B. Obligations of the Partners (Art. 1784-1827)
1. Obligations of the partners among themselves (Art. 1784-1809)
a) Distribution of profits and losses of partnership
i.
ii.

With agreement
Without agreement

b) Principle of Delectus Personae (Art. 1804)

-Ortega, et al. v. CA, et al., 245 SCRA 529
-Tocao, et al. v. CA, 342 SCRA 20
-JG Summit Holdings v. CA, Sept. 24, 2003, G.R. No. 124293
c) Management of Partnership (Art. 1800-1803)
d) When partner can demand for a formal accounting of
partnership affairs (Art. 1807, 1809)
Week No. 4
1. Property rights of a partner (Art. 1810-1814)
a) Incidents of co-ownership (Art. 1811)
b) Partners interest in the partnership (Art. 1812)
c) Effect of conveyance of interest in the partnership to third
persons (Art. 1813)
d) Charging order upon partners interest (Art. 1814)
2. Obligations of the partner with regard to third persons (Art. 1815-1827)
a) Requisites prescribed by law in order that a partnership may be
held liable to third persons for the act of one partner (Art. 1816,
1822, 1823, 1824)
b) Concept of Mutual Agency (Art. 1818)
c) Partners liability for partnership obligation (nature)
(Art. 1816 in rel. to 1824)
-Liwanag vs. Workmens Compensation Commission
105 Phil. 741
d) Prohibited acts of partners (unless authorized)
(Art. 1818, par. 3)
Weeks No. 5 and 6
C. Dissolution and Winding Up (Art. 1828-1842)
1. Definition and Effects (Art. 1828, 1829)
-difference between Dissolution and Winding Up

2. Causes of dissolution (Art. 1830,1831)

3. Effect of dissolution caused by act, death or insolvency of a partner (Art. 1833)
4. Residual powers of managing partner and exceptions thereto
(Art. 1832, 1834)
5. Duty to wind up/ liquidate partnership affairs (Art. 1836)
-Aldecoa & Co. vs. Warner, Barnes & Co., 16 Phil. 423
-Po Yeng Cheo vs. Lim Ka Yan, 44 Phil. 172
-Guidote vs. Borja, 53 Phil. 900
6. Order of payment in the winding up of partnership liabilities (Art. 1839)
Week No. 7
D. Limited Partnership (Art. 1843-1867)
1. Definition/ Concept/ Nature
2. Power/ Duties/ Rights of a Limited Partner
3. Entitlements of a limited partner after dissolution

Week No. 8
II. AGENCY
A. Historical Context
1. World Context
2. Philippine Context
-Laws 28 and 32, Title 12, Partida 3
-Spanish Civil Code (Civil Agency)
-Spanish Code of Commerce (Commercial Agency)
-Civil Code Art. 2270 (2)
B. Nature, Concept and Purpose
1. Agency as a contract
a) Definition (Art. 1868)
i. Critique/ Articles
-Espiritu, XV Lawyers Journal 297
- J.B.L. Reyes, XVI Lawyers Journal 138
ii. Other definitions

b) Essential requisites/ elements (Art. 1318)

-Rallos vs. Felix Go Chan & Sons Realty Corp., 81 SCRA 251
c) Characteristics
d) Purpose
2. Agency as a relation
a) Fiduciary character
b) Representative character
Week No. 9
3. Agency distinguished from/ compared with other relations
a) Partnership (Art. 1767)
b) Lease of Work or Service (Art. 1644)
-Nielson & Company, Inc. v. Lepanto Consolidated Mining
Company, 26 SCRA 540
- De la Cruz v. Northern Theatrical Enterprises, 95 Phil. 739
c) Independent Contractor (Art. 1713)
- Fressel v. Mariano Uy Chaco & Co., 34 Phil 122
- Shell Company of the Phil. V. Firemens Insurance, 100 Phil. 757
- Africa v. Caltex Phil., Inc., 16 SCRA 448
d) Negotiorum Gestio (Art. 2144-2145)
-De la Pea v. Hidalgo, 16 Phil. 450
e) Loan (Art. 1933)
-2 C.J.S. 1030
- Jai Alai Corp. v. BPI, 66 SCRA 29
f) Sale (Art. 1458)
- Quiroga v. Persons Hardware, 38 Phil. 501
- Gonzalo Puyat and Sons v. Arco Amusement Co., 72 Phil. 402
- Velasco v. Universal Trading Co. v. Lim Teck Suan, 97 Phil. 171
- Pearl Island Commercial Corp. v. Lim Tiang Tong, 101 Phil. 789
- Lim v. People, 133 SCRA 333
- Green Valley Poultry & allied Products, Inc. v. IAC
133 SCRA 697
- Bert Osmea & Associates v. CA, 120 SCRA 395
g) Trusteeship (Art. 1440)
- 2 C.J.S. 1034

h) Broker
- Pacific Commercial Co. v. Yatco, 68 Phil. 398
i)

Guardianship
- 2 C.J.S. 1027
- 3 AmJur 2d 421
- Fessenden v. Jones, 75 Am. Dec. 445
- McDonald v. spring Valley, 120 N.E. 476, 2 ALR 1355

j)

Bailment
- 2 C.J.S. 1027

k) Ship Agent
- Switzerland Genral Insurance Co., Ltd. v. Ramirez, 96 SCRA 297
Week No.10
C. Kinds, Creation and Existence
1. General Classification
a) Actual Agency (Art. 1868)
b) Apparent or Ostensible Agency (Art. 1873)
-J.B.L. Reyes 16 Lawyers Journal 138
-Rallos v. Yangco, 20 Phil. 269
-Compaia General de Tabacos v. Diaba, 20 Phil. 321
c) Agency by Estoppel
- 2 C.J. 444-445
- 2 C.J. 464-466
- Macke v. Camps, 7 Phil. 553
2. Kinds of Actual Agency
a) As to manner of creation (Art. 1869)
b) As to character (Art. 1875)
c) As to extent (Art. 1876)
d) As to scope of authority (Art. 1877, 1878)
3. Creation and Elements of Actual Agency
a) Consent/ Mandate
i. Manifestation of Mandate
- Express (Art. 1869, 1874)

- Implied
- Conde v. CA, 199 SCRA 245
ii. Manifestation of Acceptance
-Express (Art. 1869, 1870)
-Implied (Art. 1870-1872)
- Jimenez v. Rabot, 38 Phil. 357
- Lian v. Puno, 31 Phil. 259
- Katigbak v. Tai Hing Co., 52 Phil. 622
- Amigo v. Teves, 96 Phil. 252
- Villa v. Garcia Bosque, 49 Phil. 126
- Dir. Of Public Works v. Sing Juco, 53 Phil. 205
- BPI v. De Coster, 47 Phil. 594
- Germann & Co. v. Donaldson, 1 Phil. 63
- Macke v. Camps, 7 Phil. 533
- Municipal Council of Iloilo v. Evangelista, 55 Phil.290
- Yu Chuck v. Kong Li Po, 46 Phil. 608
- Insular Drug v. PNB, 58 Phil. 683
Week No. 11
D. Obligations of the Agent
-Intl Films (China) v. Lyric Films Exchange, 63 Phil. 778
-Nepomuceno, et al. v. Heredia, 7 Phil. 563
-Domingo v. Domingo, 42 SCRA 131
-U.S. vs. Kiene, 7 Phil. 736
-U.S. v. Reyes, 36 Phil. 791
-Ojinaga v. Estate of Perez, 9 Phil. 185
-De Borja v. De Borja, 58 Phil. 811
-PNB v. Welch,Ffairchild, & Co., 44 Phil. 780
-Harry Keeler Electric Co. v. Rodriguez, 44 Phil. 19
-Austria v. CA, 39 SCRA 527
E. Obligations of the Principal
-Gonzales & Gomez v. Haberer, 47 Phil. 380
-Albaladejo y Cia. Phil. Refining Co., 45 Phil. 556
Week 12
F. Modes of Extinguishment of Agency
-Barretto v. Santa Maria, 26 Phil. 440
-Coleongco v. Claparols, 10 SCRA 577
-De Buncio & Co. v. Ong Guan Gan, 60 Phil. 696
-New Manila Lumber Co., Inc. v. Republic, 107 Phil. 824
-Infante v. Cunanan, 93 Phil. 693
-Valera v. Velasco, 51 Phil. 695
-Buason and Reyes v. Panuyas, 105 Phil. 795
-Herrera, et al. v. Luy Kim Guam, 110 Phil. 1020
-Del Rosario v. Abad, 104 Phil. 648

-Pasno v. Ravina, 54 Phil. 378

-Perez v. PNB, 17 SCRA 834
Week No. 13
III. TRUSTS
A. Definition
B. Parties
C. Different Kinds of Trusts
1. Express Trust (Art. 1443-1446)
-Ramos v. Ramos, 61 SCRA 284
2. Implied Trust (Art. 1447-1457)
-CUAYCONG V. Cuaycong, 21 SCRA 1192
3. Resulting Trust
4. Constructive Trust
Week No. 14
D. Enforcement of Trust
1. In relation to laches
a) Fabian v. Fabian, 21 SCRA 213
b) Sotto v. Teves, 86 SCRA 154
2. In relation to Statute of Limitations
a) Gerona v. De Guzman, 11 SCRA 163
E. Period of Prescription for Reconveyance of Real Property Based on Implied Trust
-Carantes v. CA, 76 SCRA 514
-Alarcon v. Bidin, 120 SCRA 390
-Bueno v. Reyes, 27 SCRA 1179
-Varsity Hills, Inc. v. Navarro, 43 SCRA 503
-Ecsay v. CA, 61 SCRA 369
-Jaramil v. CA, 78 SCRA 420
-Vda. De Nacalaban vs. CA, 80 SCRA 428
-Duque v. Domingo, 80 SCRA 654
-Tongoy v. CA, 123 SCRA 99
-Caragay-Lagno v. CA, 133 SCRA 718