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1810Property Rights of a Partner
interest in the partnershipthe partners shares of the
prots and losses
Right to participate in the managementproperty right
Partnership Capitalconstant and remains unchanged and not
aected by uctuations in the value of partnership property
although it may be increased or decreased by consent of
partners! It represents the aggregate of the individual
contributions made by the partners.
Partnership Propertyvariable it changes! It includes not
only the original capital but all property subsequently
acquired on account of partnership name.
1811Co-ownership in Specic Partnership Property
"a partner is a co"o#ner #ith his partners of specic
partnership property but rules of co"o#nership does not
necessarily apply
Rights of a Partner in Specic Partnership Property
contemplates only tangible things
$! has an e%ual right #ith his partners to possess but
only for partnership purposes¬ for other
purposes' without the consent of other partners.a! (ransmissible to surviving heirs! (hey have
the right to #ind up business!)! he cannot assign his right except if all the other
partners assign their rights in the same
property;violation of this rule renders the
assignment is void!a! Reasonit is impossible to determine the
e*tent of his benecial interest in the
property until after li%uidation of partnership
aairs!A partner has no interest in it but his
share of what remains after all partnership
debts are paid.b! Reason for non-assigna!ility+ prevents
interference by outsiders in partnership
aairs!c! ,n authori-ed assignment by a partner of
his right is void but it may be regarded as a
valid assignment of the partners interest in
the partnership!.! /is right is not sub0ect to attachment or e*ecution
#ithout the consent of all partners &e*cept on a claim
against the partnership'a! 1f there is a partnership debt the specic
property C,2 be attached! (he partners
cannot claim e*emption under homestead
or e*emption la#s!b! Reason why in general" right cannot !e
attache#1f he cannot ma3e a voluntary
assignment neither should his separate
creditors be allo#ed an involuntary
assignment because the benecial rights of
the separate creditors of a partner in
specic partnership property should be no
greaterthan the benecial rights of their
debtor!4! /is right is not sub0ect to legal support &,rt!)5$'
a! Reason+ #ould result to diminution of
property to the e*tent of the e*emption
granted!
b! $ot su!%ect to legal supportbecause
the property belongs to the partnership and
not to the others! 6ut their interest in
partnership is sub0ect to support!
181&Partner's (nterest in the Partnership
, partners interest in the partnership &his share in the prots
and surplus' can in general be assigned be attached and be
sub0ect to legal support!
(ransferee cannot interfere or participate in the management
or administration but he can receive the net prots to #hich
the partner #ould have been entitled!
Protmeans the e*cess of returns over e*penditure in a
transaction or series of transactions7 or the net income of the
partnership
Surplusassets of the partnership after partnership debts
and liabilities are paid and settled and the rights of the
partners among themselves are ad0usted! It is the excess of
assets over liabilities.
) partner is not a cre#itor of the partnership for the
amount of his share*
181+,ects of Con.eyance /y Partner of is interest
in the Partnership
, partner may assign his interest in the partnership to any of
his co"partners or to a third person #ithout the consent of the
other in the absence of agreement!
$! 1f a partner conveys &assigns sells donates' his
#hole interest either t#o things may happena! (he partnership may still remainb! (he partnership may be dissolved
)! (he assignee does not necessarily become a partner!
(he assignor is still the partner #ith a right to
demand accounting and settlement!.! (he assignee cannot e.en interfere in the
management or a#ministration!* (he assignee cannot #eman# information"
accounting2* Cannot inspect any of the partnership !oo3s*
Rights of )ssignee
$! (o get #hatever prots the assignor"partner #ould
have obtained)! (o avail himself of the usual remedies in case of fraud
in the management.! (o as3 for annulment of the contract of assignment if
he #as induced to enter into thru any vices of
consent or he himself #as incapacitated to giveconsent!
4! (o demand accounting
8, partners conveyance operates as #issolutiononly #hen
it is clear that the parties contemplated and intended the
#ithdra#al from the partnership of such partner and the
termination of the partnership as bet#een the partners!
181Charging of (nterst of a partner
Charging 4r#ersub0ecting the interest of the debtor in the
partnership #ith the payment of unsatised amount of
0udgment!
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6R 9hile a partners interest in the partnership may be
charged or levied upon his interest in a specic rm property
cannot as a rule be attached!
Preferential Rights of Partnership Cre#itors
(he claims of partnership creditors must be satised
rst before the separate creditors of the partners can
be paid out of the interest charge!
Separate or in#i.i#ual cre#itors ha.e
preference in separate or in#i.i#ual properties*
Re#emption of interest charge#
Re#emptionmeans the e*tinguishment of the
charge or attachment on the partners interest in the
prots!
ow ma#e7$! :ay be redeemed or purchased #ith the
separate property of any one or more of the
partners ;R)! #ith partnership property #ith the consent
of all the partners #hose interests are not so
charged or sold!
(he charge may be redeemed or bought at
anytime 6 $)>,
=irmname title or style under #hich a company transacts
business &to distinguish the partnership #hich is a distinct and
separate 0uridical personality from individuals composing the
partnership!
>R+ (he partners may adopt any rm desired!
(he partners cannot use a name that is i#entical or
#ecepti.ely confusingly similar to that of any existing
or corporation or to any other namealready protected by
la# or is patently deceptive confusing or contrary to e*isting
la#s!
(he continued use of the name of a deceased partner is
permissible provided that the rm indicates in all its
communications that said partner is deceased! &CPR'
ia!ility for inclusion of name in rm name+ Persons
#ho not being partners include their names in the rm name
do not ac%uire the rights of a partner!
$! (he fact that the partner is an agent)! (he instances #hen he can bind the partnership
a! 2o duty on third persons as to acting
partners authority!b! (here is presumption that he has authority
to bind partnership!c! 6ut third parties ha# no right to assume
that partner has unlimited authority! 9hen a
partner #ho has no e*press implied or
apparent authority the partnership is not
liable for his acts!.! (he instances #hen he cannot bind the partnership
&he alone should be liable'
Partnership is a mutual agency!
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)! )cts of #ominion or ownership&par ) and .'a! Par+ limitations to the authority granted to
bind the partnershipb! Reasons
i! ,ssign the propertythe rm #ill
virtually be dissolvedii! @ispose of the good#illgood#ill is
valuable propertyiii! @o any other act #hich #ould ma3e
it impossible to carry onevidently
pre0udicial
iv! Confess a 0udgmentif done beforea case is led it is null and void
v! Compromisean act of o#nership
and may be e%uivalent to
alienationvi! ,rbitrationvii! Renounce a claimthe claim
belongs to the partnership.! )cts in contra.ention of a restriction on
authority DparEa! Partnership is not liable to third persons
having actual or presumptive 3no#ledge of
the restrictions #hether or not the acts are
for apparently carrying on in the usual #ay
the business of the partnership!
1818con.eyance of real property !elonging to the
partnership
,pplicable to real property only
9o con.ey or con.eyance means a sale or
donation or mortgage
Real property must !e registere# or owne# in the
name of
(he partnership
;ne or more but not all the partners
;ne or more or all the partners or in a third person
in trust for the partnership!
Par 1F& #hat is conveyed is the title
Par +F#hat is conveyed is eGuita!le interestall
interest #hich the partnership had e*cept title! (hese are
benecial interest li3e use fruits but not the na3ed
o#nership!
$! (itle in partnership name conveyance in partnership
name ithout authority'passes the title to
!uyere*cepta! (he conveyance is not in the usual #ay of
businessb! /ad 3no#ledge of the fact of no authority
)! (itle in partnership name conveyance in partnersnamee%uitable interest
.! (itle in name of one or more partners conveyance in
name of partner or partners in #hose name title
stands, and 6 sold the land in their o#n name!
(itle is conveyeda! If without authority:
i! 1f buyer is in good faith and had no
3no#ledgetitle passesii! 1f buyer is in bad faith the rm can
recover!4! (itle in name of one or more or all partners or a third
person in trust for partnership conveyance e*ecuted
in partnership name or in name of the partner
e%uitable interest in both casesA! (itle in name of all partners conveyance in name of
,BB partnerstitle passes
18&0a#mission !y a partner
6R a person is not bound by the act admission statement or
agreement of another of #hich he has no 3no#ledge or to
#hich he has not given is consent e*cept by virtue of a
particular relation bet#een them!
,n admission made by a partner is an admission against the
partnership under the conditions given+
$! (he admission must concern partnership aairs)! 9ithin the scope of his authority
9hen a partner ma3es admission for himself only he alone
shall be chargeable #ith his admissions!
Restriction
1* (he admission made before dissolution are binding
only when the partner has authority to act on
the particular matter*&* ,dmissions made after dissolution are binding only if
the admissions #ere necessary to #ind up the
business
18&1$49(C, 94" 4R H$4,6, 4:" ) P)R9$,R 4:
>)99,R )::,C9($6 P)R9$,RS(PS
(SS(4$ 4R /R,)C 4: 9R=S9 -- ,(1;2E D2@
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Partnership is not lia!leif the partner acted on his o#n
and not for the benet of the partnership in the course of
some transaction not connected #ith the partnership
business!
Criminal lia!ilitynon"acting partner is not liable unless the
partnership is engaged in an unla#ful enterprise!
hen the rm an# partners are not lia!le DParasE
1* 1f the #rongful act or omission #as not done #ithin
the scope of the partnership business and for its
benet!&* 1f the act or omission #as not #rongful!+* 1f the act or omission although #rongful did not
ma3e the partner concerned liable himself!* 1f committed after the rm has been dissolved!
>isapplication of money or property
1* #as received #ithin the scope of partner authority&* or by any other partner after it #as received by the
partnership in the ordinary course of business #hile
in its custody!
18&2partner !y estoppels
$! 1t is not a partnership!)!
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a! of ma3ing good all outstanding
engagementsb! of ta3ing and settling all accountsc! collecting all the property means and
assets for the benet of all interested!.! (ransaction of ne# business prohibited
18+0-C)=S,S 4: (SS4=9(4$ DautomaticE e*clusive
categories
1* ,ct of parties not in violation of their agreement1E (ermination of the denite term or particular
underta3ing&E 6y the e*press #ill of any partner #ho must
act in good faith #hen there is no denite
term and no specied underta3ing+E 6y e*press #ill of all the partners &e*cept
those #ho have assigned or #hose
interests have been charged'E
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18+2,::,C9 4: (SS4=9(4$ 4$ P)R9$,R'S
,L(S9($6 ()/((9?
@oes not of itself discharge the e*isting liability of a partner!
18+5($($6 =P
$! Ku#iciallyunder the control and direction of the
proper court upon cause sho#n by any partner his
legal representative or his assignee)! ,xtra%u#icially
a! by the partners themselves #ithoutintervention of the court
b! or by the legal representative of the last
surviving partner
Persons authoriMe# to win# up
1* (he partners designated by agreement!&* 1n the absence of such all the partners #ho not
#rongfully dissolved the partnership7 or+* (he legal representative of the last surviving partner* 8(he court may appoint a receiver to #ind up!
Powers of liGui#ating partner
1* :a3e ne# contracts&* Raise money to pay partnership debts+* 1ncur obligations to complete e*isting contracts or
preserve partnership assets!* 1ncur e*penses necessary in the conduct of litigation8the surviving partner has the full authority to do
everything that may be necessary but his po#er is
limited to the performance of acts #hich are
indispensable to that end!
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