ARELLANO UNIVERSITY SCHOOL OF LAW
PARTNERSHIP, AGENCY AND TRUST
AY 2024-2025
Atty. Maureen Kay E. Patajo, L.L.M.
Reference: Comments and Cases on Partnership, Agency and Trust (De Leon, Hector)
Latest edition
Grading Requirement:
Class Standing 30 %
Midterm Exam 30%
Final Exam 40%
TOTAL 100 %
COURSE OUTLINE
I. PARTNERSHIP
A. GENERAL PROVISIONS (Art. 1767 - 1783)
Concept of Partnership (Art. 1767- 1768)
Cases: Santos vs. Sps. Reyes 368 SCRA 261
Saludo vs. PNB, G.R. No. 193138, August 20, 2018
Rules determining partnership (Art. 1769)
Case: Yulo vs. Yang Chiao Seng, G.R. No. L-12541 August 28, 1959
Lim vs. Philippine Fishing Gear Industries, Inc., G.R. No. 136448, November 3,
1999
Distinction of partnership vs. co-ownership
Distinction of partnership vs. conjugal partnership of gains
Distinction of partnership vs. voluntary association
Distinction of partnership vs. joint venture
Distinction of partnership vs. corporation
Distinction of partnership vs. employer-employee relationship
Cases: SEC Opinion dated February 29, 1980
Gatchalian vs. CIR, G.R. No. L-45425 April 29, 1939
Pascual vs. CIR, G.R. No. 78133, October 18, 1988
Obillos v. CIR G.R. No. L-68118, 29 October 1985
Tuason vs. Bolanos, 95 Phil 106
Tocao and Belo vs. CA, G.R. No. 127405, October 4, 2000
Santiago vs. Spouses Garcia, G.R. No. 228356, March 9, 2020
Dusol vs. Lazo, G.R. No. 200555, January 20, 2021
Object or purpose of Partnership (Art. 1770)
Case: Arbes vs. Politisco et.al., G.R. No. 31057, September 7, 1929
1
Form of Partnership Contract (Art. 1771, 1772, 1773)
Cases: Magalona vs. Pesayco, 59 Phil 453
Borja vs. Addision et.al., 44 Phil 895
Agad vs. Mabato, G.R. L-24193, June 28, 1968
Angeles vs. Secretary of Justice, G.R. No. 142612, July 29, 2005
Classification of partnership
As to extent of its subject matter
- Universal Partnership - Art. 1776-1782, 739
- Particular Partnership - Art. 1776, 1783
As to liability of the Partner
- General Partnership - Art. 1776
- Limited partnership - Art. 1776
Case: Commissioner of Internal Revenue vs. William Suter, G.R. No. L-25532, February
28, 1969
As to its duration
- Partnership at will - Art. 1785
- Partnership with a fixed term - Art. 1785
Case: Ortega vs. CA, G.R. No. 109248 July 3, 1995
As to legality of its existence
- De jure partnership
- De facto partnership
As to representation of others
- Ordinary or real partnership
- Ostensible partnership or partnership by estoppel - Art 1825
Kinds of partners
a. Capitalist Partner - Arts. 1789, 1790, 1797, 1808
b. Industrial Partner – Art. 1789, 1797
c. General Partner
d. Limited Partner
e. Managing Partner - Arts. 1792, 1800, 1801, 1802
f. Liquidating Partner
g. Partner by Estoppel or Quasi-partner - Art. 1825
h. Continuing partner
i. Surviving partner
j. Subpartner
k. Ostensible partner
l. Secret partner
m. Silent partner
n. Dormant partner
o. Original Partner
p. Incoming Partner
q. Retiring partner
B. OBLIGATIONS OF PARTNERS (ART. 1784-1827)
2
1. Obligations of partners among themselves (Art. 1784-1809)
a. To contribute; distribution of loss and profits - Arts.1786-1788, 1790-1799
b. Management of Partnership (Arts. 1800-1803)
c. Contract of sub-partnership (Art. 1804)
d. Demand of formal accounting of partnership (Art. 1807, 1809)
e. Prohibition against Capitalist partner engaging in business (Art. 1808)
Cases: US vs. Clarin, G.R. No. 5840, September 17, 1910
Catalan vs. Gatchalian, G.R. No. L-11648, April 22, 1959
Pang Lim vs. Lo Seng, G.R. No. L-16318, October 21, 1921
Sancho vs. Lizarraga, G.R. No. L-33580, February 6, 1931
2. Property Rights of a Partner (Arts. 1810 - 1814)
a. Incidents of co-ownership of partners (Art. 1811)
b. Partner's interest in the partnership (Art. 1812)
c. Effect of assignment of partner's whole interest (Art. 1813)
d. Charging order upon partner's interest (Art. 1814)
Case: Dan Fue Leung vs. Intermediate Appellate Court, G.R. No. 70926, January 31, 1989
3. Obligations of the Partners with Regard to Third Persons (Arts. 1815-1827)
a. To have his partnership interest charged for personal debts (Art. 1814, 1827)
b. To be liable pro rata for partnership debts (subsidiary & joint) - (Art. 1816, 1817, 1835)
c. Tort liability; breach of trust liability (primary & solidary) - (Arts. 1822 - 1824)
d. Liability in case of estoppel - (Art. 1825)
e. Liability of new partners - (Art. 1826)
Cases: Pacific Commercial vs. Aboitiz, G.R. No. 25007, March 2, 1926
Island Sales vs. United Pioneers, G.R. No. L-22493, July 31, 1975
Munasque vs. Court of Appeals, G.R. No. L-39780, November 11, 1985
Guy vs. Gascott, G.R. No. 206147, January 13, 2016
C. DISSOLUTION AND WINDING UP (Art. 1828 - 1842)
1. Definition and effects of dissolution and winding up (Art. 1828-1829)
2. Causes of dissolution (Art. 1830, 1831)
3. Effect of dissolution caused by act, death, or insolvency of partner (Art. 1833)
4. Residual powers of managing partner and exceptions (Art. 1832, 1834)
5. Right to wind up the partnership affairs (Art. 1836)
6. Rules in settling accounts between partners after dissolution (Art. 1839)
Cases: Sy vs. CA, G.R. No. 94285, August 31, 1999
Yu vs. NLRC, G.R. No. 97212, June 30, 1993
D. LIMITED PARTNERSHIP (Art. 1843-1867)
a. Concept of limited partnership
b. Rights, powers and liabilities of limited partner
c. Dissolution of a limited partnership
3
II. AGENCY
A. NATURE, FORM AND KINDS OF AGENCY (Art. 1868 – 1883)
Concept of agency (Art. 1868)
Characteristics of a contract of agency
Parties to a contract of agency
Elements of agency
- Consent
- Object
- Consideration
Cases: Rallos vs. Felix Go Chan & Sons Realty Corp., 81 SCRA 251
Loadmasters vs. Glodel, G.R. No. 179446, January 10, 2011
Manila Memorial vs. Linsangan, G.R. No. 151319, November 22, 2004
Eurotech vs. Cuison, G.R. No. 167552, April 23, 2007
Tuazon vs. Heirs of Ramos, G.R. No. 156262, July 14, 2005
Orient Air Service vs. CA, G.R. No. 76931, May 29, 1991
Victorias Milling vs. CA, G.R. No. 117356, June 19, 2000
Capacity of the parties
Form of contract of agency (Art. 1869, 1874)
- Oral
- Written
Nature of relations between principal and agent
- Relations fiduciary in character
- Agent estopped from asserting interest adverse to his principal
- Agent must not act as an adverse party
- Agent must not act for an adverse party
- Agent must not use or disclose secret information
- Agent must give notice of material facts
Distinction of agency vs. similar contracts or relations
Distinction of agency vs. loan
Distinction of agency vs. lease of service
Distinction of agency vs. independent contract
Distinction of agency vs. partnership
Distinction of agency vs. negotiorum gestio
Distinction of agency vs. brokerage
Distinction of agency vs. sale
Distinction of agency vs. bailment
Distinction of agency vs. guardianship
Distinction of agency vs. trust
Distinction of agency vs. judicial administration
Case: Jai Alai Corp vs. BPI, 66 SCRA 29
Fressel vs. Mariano Uy Chaco Sons, G.R. No. L-10918, March 4, 1916
De la Pena vs. Hidalgo, 16 Phil 450
4
Kinds of 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)
B. OBLIGATIONS OF THE AGENT (Art. 1884 – 1909)
Cases: PNB vs. Agudelo, 58 Phil. 655
Tuazon vs. Orosco, 5 Phil 596
Cervantes vs. CA, 304 SCRA 25
Bank of the Philippine Islands and FGU Insurance vs. Laingo, G.R. No. 205206,
March 16, 2016
Oliver vs. PS Bank, G.R. No. 214567, April 4, 2016
V.Gent Inc vs. Morning Star Travel and Tours, G.R. No. 186305, July 22, 2015
C. OBLIGATIONS OF THE PRINCIPAL (Art. 1910- 1918)
Cases: Gonzales & Gomez vs. Haberer, G.R. No. L-22604, February 3, 1925
Albaladejo y Cia S. en. C. vs. Phil Refining Co, G.R. No. L-20726 December 20, 1923
D. MODES OF EXTINGUISHMENT OF AGENCY (Arts. 1919 – 1932)
Cases: Austria vs. CA, 39 SCRA 527
PNB vs. Manila Surety, 14 SCRA 776
Domingo vs. Domingo, 42 SCRA 131
Severino vs. Severino, 44 Phil 343
Green Valley Poultry vs. IAC, 133 SCRA 697
Municipal Council of Iloilo vs. Evangelista, 55 Phil 290
Valera vs. Velasco, 51 Phil 695
Pasno vs. Ravina, 54 Phil 378
Herrera vs. Luy Kim Guan, 1 SCRA 406
Mercado vs. Allied Banking Corp, G.R. No. 171460. July 24, 2007
III. TRUST
A. GENERAL PROVISIONS (Arts. 1440 – 1442)
B. EXPRESS TRUSTS (Arts. 1443- 1446)
Case: Ramos vs. Ramos, 61 SCRA 284
C. IMPLIED TRUSTS (Arts. 1447 – 1457)
Cases: Cuaycong vs. Cuaycong, G.R. No. L-21616, December 11, 1967
Carantes vs. CA, 76 SCRA 514
Alarcon vs. Bidin, 120 SCRA 390
Tongoy vs. CA, 123 SCRA 99
Caragay-Lagno vs. CA, 133 SCRA 718
Goyangco vs. UCPB, G.R No. 179096, February 6, 2013
Canezo vs. Rojas, G.R. No. 148788, November 23, 2007
Cabacungan vs. Laigo, G.R. No. 175073, August 15, 2011
Tong vs. Kun, G.R. No. 196023, April 21, 2014
Pigao vs. Rabanillo, G.R. No. 150712, May 2, 2006
Spouses Rosario vs. CA, G.R. No. 127005, July 19, 1999
Brito Sr. vs. Dianala, G.R. No. 171717, December 15, 2010
