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The document discusses two petitions filed by law firms seeking to continue using the names of deceased partners in their firm names. The court held that law firm names cannot include the names of deceased partners. The court discussed how law partnerships differ from commercial partnerships in that they have no goodwill or assets to transfer, and a lawyer's reputation depends on their individual qualifications and character rather than the firm name. Allowing deceased partner names in law firm names could provide undue advantages and disadvantages and affect the integrity of the legal profession.
The document discusses two petitions filed by law firms seeking to continue using the names of deceased partners in their firm names. The court held that law firm names cannot include the names of deceased partners. The court discussed how law partnerships differ from commercial partnerships in that they have no goodwill or assets to transfer, and a lawyer's reputation depends on their individual qualifications and character rather than the firm name. Allowing deceased partner names in law firm names could provide undue advantages and disadvantages and affect the integrity of the legal profession.
The document discusses two petitions filed by law firms seeking to continue using the names of deceased partners in their firm names. The court held that law firm names cannot include the names of deceased partners. The court discussed how law partnerships differ from commercial partnerships in that they have no goodwill or assets to transfer, and a lawyer's reputation depends on their individual qualifications and character rather than the firm name. Allowing deceased partner names in law firm names could provide undue advantages and disadvantages and affect the integrity of the legal profession.
of the Civil Code cited by petitioners, the first factor to consider is that it is within Chapter 3 of FACTS: Two separate Petitions were filed before Title IX of the Code entitled "Dissolution and the Court 1) by the surviving partners of Atty. Winding Up." The Article primarily deals with the Alexander Sycip, who died on May 5, 1975, and 2) exemption from liability in cases of a dissolved by the surviving partners of Atty. Herminio Ozaeta, partnership, of the individual property of the who died on February 14, 1976, praying that they deceased partner for debts contracted by the person be allowed to continue using, in the names of their or partnership which continues the business using firms, the names of partners who had passed away. the partnership name or the name of the deceased partner as part thereof. What the law contemplates ISSUE: Whether or not the name of a deceased therein is a hold-over situation preparatory to partner may still be continued to be used by a formal reorganization. partnership engaged in a legal profession. (Note: This ruling is focused only in law firms as Secondly, Article 1840 treats more of a commercial distinguished from other professional partnerships partnership with a good will to protect rather than such as those engaged in accounting/auditing and of a professional partnership, with no saleable good engineering professions.) will but whose reputation depends on the personal qualifications of its individual members. Thus, it HELD: No. has been held that a saleable goodwill can exist only in a commercial partnership and cannot arise A. Inasmuch as "Sycip, Salazar, Feliciano, in a professional partnership consisting of lawyers. Hernandez and Castillo" and "Ozaeta, Romulo, De Leon, Mabanta and Reyes" are partnerships, the As a general rule, upon the dissolution of use in their partnership names of the names of a commercial partnership the succeeding partners deceased partners will run counter to Article 1815 or parties have the right to carry on the business of the Civil Code which provides: under the old name, in the absence of a stipulation forbidding it, (s)ince the name of a Art. 1815. Every partnership shall operate under a commercial partnership is a partnership asset firm name, which may or may not include the name inseparable from the good will of the firm. On the of one or more of the partners. other hand, a professional partnership the reputation of which depends or; the individual Those who, not being members of the partnership, skill of the members, such as partnerships of include their names in the firm name, shall be attorneys or physicians, has no good win to be subject to the liability, of a partner. distributed as a firm asset on its dissolution, however intrinsically valuable such skill and It is clearly tacit in the above provision reputation may be, especially where there is no that names in a firm name of a partnership must provision in the partnership agreement relating to either be those of living partners and. in the case of good will as an asset. non-partners, should be living persons who can be subjected to liability. In fact, Article 1825 of the C. A partnership for the practice of law cannot be Civil Code prohibits a third person from including likened to partnerships formed by other his name in the firm name under pain of assuming professionals or for business. For one thing, the law the liability of a partner. The heirs of a deceased on accountancy specifically allows the use of a partner in a law firm cannot be held liable as the trade name in connection with the practice of old members to the creditors of a firm particularly accountancy. A partnership for the practice of law where they are non-lawyers. is not a legal entity. It is a mere relationship or association for a particular purpose. ... It is not a Prescinding the law, there could be partnership formed for the purpose of carrying on practical objections to allowing the use by law trade or business or of holding property." Thus, it firms of the names of deceased partners. The public has been stated that "the use of a nom de plume, relations value of the use of an old firm name can assumed or trade name in law practice is improper. tend to create undue advantages and disadvantages The usual reason given for different standards of in the practice of the profession. An able lawyer conduct being applicable to the practice of law without connections will have to make a name for from those pertaining to business is that the law is a himself starting from scratch. Another able lawyer, profession. who can join an old firm, can initially ride on that old firm's reputation established by deceased Primary characteristics which distinguish the legal partners. profession from business are: 1. A duty of public service, of which the amount of the debts incurred by the partnership, but emolument is a byproduct, and in which one may only in pro rata. attain the highest eminence without making much money. Therefore, in this case, Yulo is only responsible for 2. A relation as an "officer of court" to the one half (1/2) of the debt, notwithstanding the fact administration of justice involving thorough that Palacios can no longer be found in the sincerity, integrity, and reliability. Philippines. 3. A relation to clients in the highest degree fiduciary. 4. A relation to colleagues at the bar characterized by candor, fairness, and unwillingness to resort to current business methods of advertising and LIWANAG VS CA encroachment on their practice, or dealing directly FACTS: with their clients. "The right to practice law is not a natural or constitutional right but is in the nature of a Petitioner Carmen Liwanag (liwanag) and a privilege or franchise. It is limited to persons of certain Thelma Tabligan went to the house of good moral character with special qualifications complainant Isidora Rosales (rosales) and asked duly ascertained and certified. The right does not her to join them in the business of buying and only presuppose in its possessor integrity, legal selling cigarettes. Rosales would give the money standing and attainment, but also the exercise of a needed to buy the cigarettes while Liwanag and special privilege, highly personal and partaking of Tabligan would act as her agents, with a the nature of a public trust." corresponding 40% commission to her if the goods are sold; otherwise the money would be returned to Rosales. Consequently, Rosales gave several cash advances to Liwanag and Tabligan amounting CO-PITCO VS YULO to P633,650.00.
FACTS During the first two months, Liwanag and
Tabligan made periodic visits to Rosales to report Florencio Yulo and Jaime Palacios were partners in the operation of a sugar estate in Negros. As on the progress of the transactions. The visits, partners, they had commercial dealings with a however, suddenly stopped, and all efforts by china man named Dy-Sianco. On February 1903, Rosales to obtain information regarding their the father of Florencio, Pedro Yulo, took charge of business proved futile. his interests in the partnership, and he eventually became a general partner of Palacios. This Alarmed by this development and believing partnership continued until the end of 1904. that the amounts she advanced were being For the collection of a debt amounting to P1,638.80 misappropriated, Rosales filed a case of estafa from one of their dealings, Dy-Sianco filed a case against Liwanag. in court. However, at that time, Palacios was no longer in the Philippines. So, the whole amount Liwanag advances the theory that the intention of was demanded of Yulo alone. Yulo refused to pay the parties was to enter into a contract of for the whole amount, thus this petition. partnership, wherein rosales would contribute the ISSUE funds while she would buy and sell the cigarettes, and later divide the profits between them.[1] she WON Pedro Yulo is liable for the entire amount of also argues that the transaction can also be the debt incurred by the partnership. interpreted as a simple loan, with rosales lending to her the amount stated on an installment basis. RULING No. ISSUE: . The partnership of Yulo and Palacios is a Civil Respondent appellate court gravely erred in Partnership. As distinguished from a Mercantile affirming the conviction of the accused-petitioner Partnership, in a civil partnership, by express provision of Articles 1698 and 1137 of the Civil for the crime of estafa, when clearly the contract Code, partners are not liable each for the whole that exist (sic) between the accused-petitioner and complainant is either that of a simple loan or that of Neither can the transaction be considered a a partnership or joint venture hence the non return loan, since in a contract of loan once the money is of the money of the complainant is purely civil in received by the debtor, ownership over the same is nature and not criminal. transferred.[8] Being the owner, the borrower can dispose of it for whatever purpose he may deem RULING: proper.
There is no contract of partnership. The receipt of
In the instant petition, however, it is evident the money was for a specific purpose. that Liwanag could not dispose of the money as she pleased because it was only delivered to her for a The receipt signed by Liwanag states thus: single purpose, namely, for the purchase of cigarettes, and if this was not possible then to May 19, 1988 Quezon City return the money to Rosales. Since in this case there was no transfer of ownership of the money Received from Mrs. Isidora P. Rosales the sum of delivered, Liwanag is liable for conversion under FIVE HUNDRED TWENTY SIX THOUSAND Art. 315, par. 1(b) of the Revised Penal Code. AND SIX HUNDRED FIFTY PESOS (P526,650.00) Philippine Currency, to purchase cigarrets (sic) (Philip & Marlboro) to be sold to customers. In the event the said cigarrets (sic) are not sold, the proceeds of the sale or the said products (shall) be returned to said Mrs. Isidora P. Rosales the said amount of P526,650.00 or the said items on or before August 30, 1988. TIOSEJO VS. ANG G.R. NO. 174149 (SGD & Thumbedmarked) (sic) Facts: CARMEN LIWANAG On 28 December 1995 petitioner entered into a Joint Venture Agreement (JVA) with Primetown 26 H. Kaliraya St. Property Group, Inc. (PPGI) for the development of a residential condominium project to be known Quezon City as The Meditel on the former’s 9,502 square meter property along Samat St., Highway Hills, Mandaluyong City. With petitioner Signed in the presence of: contributing the same property to the joint venture and PPGI undertaking to develop the (Sgd) Illegible (Sgd) Doming Z. Baligad condominium, the JVA provided, among other terms and conditions, that the developed units shall The language of the receipt could not be any be shared by the former and the latter at a ratio of 17%-83%, respectively. While both parties were clearer. It indicates that the money delivered to allowed, at their own individual responsibility, to Liwanag was for a specific purpose, that is, for the pre-sell the units pertaining to them, PPGI further purchase of cigarettes, and in the event the undertook to use all proceeds from the pre-selling cigarettes cannot be sold, the money must be of its saleable units for the completion of the returned to Rosales. Condominium Project.”
On 17 June 1996, the Housing and Land Use
Thus, even assuming that a contract of Regulatory Board (HLURB) issued License to Sell partnership was indeed entered into by and between in favor of petitioner and PPGI as project the parties, we have ruled that when money or owners. By virtue of said license, PPGI property have been received by a partner for a executed Contract to Sell with Spouses Benjamin specific purpose (such as that obtaining in the and Eleanor Ang on 5 February 1997, over the instant case) and he later misappropriated it, such 35.45-square meter condominium unit for the partner is guilty of estafa.[7] agreed contract price of P52,597.88 per square meter or a total P2,077,334.25. On the same date PPGI and respondents also executed Contract to Sell No. over the 12.50 square meter parking space executed by PPGI and respondents, it did not identified as Parking Slot No. 0405, for the receive any portion of the payments made by the stipulated consideration of P26,400.00 square latter; and, that without any contributory fault and meters or a total ofP313,500.00. negligence on its part, PPGI breached its undertakings under the JVA by failing to complete On 21 July 1999, respondents(Ang) filed against the condominium project. In addition to the petitioner (Tiosejo) and PPGI the complaint for dismissal of the complaint and the grant of its the rescission of the aforesaid Contracts to Sell counterclaims for exemplary damages, attorney’s docketed before the HLURB as HLURB Case No. fees, litigation expenses and the costs, petitioner REM 072199-10567. Contending that they were interposed a cross-claim against PPGI for full assured by petitioner and PPGI that the subject reimbursement of any sum it may be adjudged condominium unit and parking space would be liable to pay respondents. available for turn-over and occupancy in December 1998. Respondents averred, among Housing and Land Use (HLU) Arbiter Dunstan T. other matters, that in view of the non-completion San Vicente went on to render the decision of the project according to said representation, declaring the subject Contracts to Sell cancelled respondents instructed petitioner and PPGI to and rescinded on account of the non-completion of stop depositing the post-dated checks they the condominium project. On the ground that the issued and to cancel said Contracts to Sell; and, JVA created a partnership liability on their part, that despite several demands, petitioner and petitioner and PPGI, as co-owners of the PPGI have failed and refused to refund condominium project, were ordered to pay: (a) the P611,519.52 they already paid under the respondents’ claim for refund of the P611,519.52 circumstances. Together with the refund of said they paid, with interest at the rate of 12% per amount and interests thereon at the rate of 12% per annum from 5 February 1997; (b) damages in the annum, respondents prayed for the grant of their sum of P75,000.00; (c) attorney’s fees in the sum claims for moral and exemplary damages as well as of P30,000.00; (d) the costs; attorney’s fees and the costs. Issue: Specifically denying the material allegations of the foregoing complaint, PPGI filed its answer alleging WHETHER OR NOT THE COURT OF that the delay in the completion of the project was APPEALS ERRED IN REFUSING TO attributable to the economic crisis which affected RESOLVE THE PETITION ON THE the country at the time; that the unexpected and MERITS AFFIRMING THE HLURB unforeseen inflation as well as increase in interest BOARD’S DECISION INSOFAR AS IT rates and cost of building materials constitute force FOUND JTIC SOLIDARILY LIABLE majeure and were beyond its control; that aware of WITH PRIMETOWN TO PAY SPOUSES its responsibilities, it offered several alternatives to ANG DAMAGES, ATTORNEY’S FEES its buyers like respondents for a transfer of their AND THE COST OF THE SUIT AND investment to its other feasible projects and for the AFFIRMING THE HLURB BOARD’S amounts they already paid to be considered as DECISION INSOFAR AS IT FAILED TO partial payment for the replacement unit/s; and, that AWARD JITC ITS COUNTERCLAIMS the complaint was prematurely filed in view of the AGAINST SPOUSES ANG. on-going negotiations it is undertaking with its buyers and prospective joint venture Ruling: partners. Aside from the dismissal of the complaint, PPGI sought the readjustment of the We find the petition bereft of merit. contract price and the grant of its counterclaims for attorney’s fees and litigation expenses. Even prescinding from the foregoing procedural considerations, we also find that the HLURB Petitioner also specifically denied the material Arbiter and Board correctly held petitioner liable allegations of the complaint in separate alongside PPGI for respondents’ claims. By the answer dated 5 February 2002, which it amended express terms of the JVA, it appears that petitioner on 20 May 2002. Calling attention to the fact that not only retained ownership of the property its prestation under the JVA consisted in pending completion of the condominium contributing the property on which The project but had also bound itself to answer Meditel was to be constructed, petitioner liabilities proceeding from contracts entered into by asseverated that, by the terms of the JVA, each PPGI with third parties. party was individually responsible for the marketing and sale of the units pertaining to its Article VIII, Section 1 of the JVA distinctly provides share; that not being privy to the Contracts to Sell as follows: Developer shall furnish the “Sec. 1. Rescission and Owner with a copy of its damages. Non-performance by contracts with the said buyers on either party of its obligations a month-to-month basis. Finally, under this Agreement shall be in case the Owner would be excused when the same is due to constrained to assume the Force Majeure. In such cases, obligations of the Developer to the defaulting party must its own buyers, the Developer exercise due diligence to shall lose its right to ask for minimize the breach and to indemnity for whatever it may remedy the same at the soonest have spent in the Development of possible time. In the event that the Project. either party defaults or breaches any of the provisions of this Nevertheless, with respect Agreement other than by reason to the buyers of the Developer of Force Majeure, the other party for the First Phase, the area shall have the right to terminate intended for the Second Phase this Agreement by giving notice shall not be bound and/or to the defaulting party, without subjected to the said covenants prejudice to the filing of a civil and/or any other liability case for damages arising from incurred by the Developer in the breach of the defaulting connection with the development party. of the first phase.” (Underscoring supplied) In the event that the Developer shall be rendered unable to complete the Viewed in the light of the foregoing provision of Condominium Project, and such the JVA, petitioner cannot avoid liability by failure is directly and solely claiming that it was not in any way privy to the attributable to the Developer, the Contracts to Sell executed by PPGI and Owner shall send written notice respondents. As correctly argued by the latter, to the Developer to cause the moreover, a joint venture is considered in this completion of the Condominium jurisdiction as a form of partnership and is, Project. If the developer fails to accordingly, governed by the law of comply within One Hundred partnerships. Under Article 1824 of the Civil Code Eighty (180) days from such of the Philippines, all partners are solidarily liable notice or, within such time, with the partnership for everything chargeable to indicates its incapacity to the partnership, including loss or injury caused to a complete the Project, the Owner third person or penalties incurred due to any shall have the right to take over wrongful act or omission of any partner acting in the construction and cause the the ordinary course of the business of the completion thereof. If the Owner partnership or with the authority of his co- exercises its right to complete the partners. Whether innocent or guilty, all the Condominium Project under partners are solidarily liable with the partnership these circumstances, this itself. Agreement shall be automatically rescinded upon written notice to the Developer and the latter shall hold the former free and harmless from any and all liabilities to third persons arising from such rescission. In any JO CHUNG CANG V. PACIFIC case, the Owner shall respect COMMERCIAL CO. (1923) and strictly comply with any covenant entered into by the Developer and third parties with respect to any of its units in the Facts: Condominium Project. To enable the owner to comply with this Sociedad Mercantil, Teck Seing & Co, Ltd., filed contingent liability, the an application to be adjudged insolvent. The creditor (Pacific Commercial Company, Piñol & 2. NO. The Supreme Court quoted Professor Jose Company, Riu Hermanos, and W. H. Anderson & A. Espiritu as amicus curiæ: Company) filed a motion to declare the individual partners as parties to the proceeding, requiring each My opinion is that such a fact alone cannot and will of the said partners to file an inventory of his not be a sufficient cause of preventing the property and that each of the said partners be formation of a general partnership, especially if the adjudicated insolvent debtors in this proceeding. other requisites are present and the requisite The trial judge first granted the motion, but regarding registration of the articles of association subsequently denied it. in the Commercial Registry has been complied with, as in the present case. I do not believe that the Issue: adoption of a wrong name is a material fact to be taken into consideration in this case; first, because 1. W/N Teck Seing & Co, Ltd. is a general the mere fact that a person uses a name not his own partnership. does not prevent him from being bound in a contract or an obligation he voluntarily entered 2. W/N the fact that the firm name “Teck Seing & into; second, because such a requirement of the law Co., Ltd.” does not contain the name of all or any is merely a formal and not necessarily an essential of the partners, as prescribed by the Code of one to the existence of the partnership, and as long Commerce, prevented the creation of a general as the name adopted sufficiently identity the firm or partnership. partnership intended to use it, the acts and contracts done and entered into under such a name bind the Held/Ratio: firm to third persons; and third, because the failure of the partners herein to adopt the correct name 1. YES. It is a general partnership. To establish a prescribed by law cannot shield them from their limited partnership, there must be at least 1 general personal liabilities, as neither law nor equity will partner and the name of at least 1 of the general permit them to utilize their own mistake in order to partners must appear in the firm name. But neither put the blame on third persons, and much less, on of these requirements have been fulfilled. The the firm creditors in order to avoid their personal general rule is, those who seek to avail themselves possibility. of the protection of laws permitting the creation of limited partnerships must show a substantially full The legal intention deducible from the acts of the compliance with such laws. A limited partnership parties controls in determining the existence of a that has not complied with the law of its creation is partnership. If they intend to do a thing which in not considered a limited partnership at all, but a law constitutes a partnership, they are partners, general partnership in which all the members are although their purpose was to avoid the creation of liable. such relation. Here, the intention of the persons making up Teck Seing & co., Ltd. was to establish Article 125 of the Code of Commerce provides that a partnership which they erroneously denominated the articles of general co-partnership must state the a limited partnership. If this was their purpose, all names, surnames, and domiciles of the partners; the subterfuges resorted to in order to evade liability firm name; the names and surnames of the partners for possible losses, while assuming their enjoyment to whom the management of the firm and the use of of the advantages to be derived from the relation, its signature is entrusted; the capital which each must be disregarded. The partners who have partner contributes in cash, credits, or property, disguised their identity under a designation distinct stating the value given the latter or the basis on from that of any of the members of the firm should which their appraisement is to be made; the be penalized, and not the creditors who presumably duration of the co-partnership; and the amounts have dealt with the partnership in good faith. which, in a proper case, are to be given to each managing partner annually for his private expenses. Articles 127 and 237 of the Code of Commerce Succeeding articles of the Code provide that the make all the members of the general co-partnership general co-partnership must transact business under liable personally and in solidum with all their the name of all its members, of several of them, or property for the results of the transactions made in of one only. the name and for the account of the partnership. Section 51 of the Insolvency Law, likewise, makes Referring to the documents provided (all stated in all the property of the partnership and also all the Spanish), it will be noted that all of the separate property of each of the partners liable. If a requirements of the Code have been met, with the firm be insolvent, but one or more partners thereof sole exception of that relating to the composition of are solvent, the creditors may proceed both against the firm name. the firm and against the solvent partner or partners, first exhausting the assets of the firm before seizing signed by Sy Tit as attorney-in-fact of the members the property of the partners. of "Tai Sing & Co.
Issue: WON the partnership can be held liable for
PNB VS LO the said obligation? Yes. Facts: Ruling: Severo Eugenio Lo and Ng Khey Ling, together with J. A. Say Lian Ping, Ko Tiao Hun, On Yem Ke Art. 1815 of the NCC provides: Every partnership Lam and Co Sieng Peng formed a commercial shall operate under a firm name, which may or partnership under the name of "Tai Sing and Co.," may not include the name of one or more of the with a capital of P40, 000 contributed by said partners. Those who, not being members of the partners. J. A. Say Lian Ping was appointed partnership, include their names in the firm name, general manager of the partnership, with powers shall be subject to the liability of a partner. specified in the partnership’s articles of copartnership. The association formed by the defendants is a general partnership, as defined in article 126 of the Subsequently, Lian Ping executed a power of Code Commerce. This partnership was registered attorney in favor of A. Y. Kelam, authorizing him in the mercantile register of the Province of Iloilo. to act in his stead as manager and administrator of The only anomaly noted in its organization is that "Tai Sing & Co.,” The latter then obtained a loan of instead of adopting for their firm name the names P8, 000 in current account from PNB. As security of all of the partners, of several of them, or only for said loan, he mortgaged certain personal one of them, to be followed in the last two cases, property of "Tai Sing & Co. Such credit was by the words "and to be followed in the last two renewed several times. cases, by the words "and company" the partners agreed upon "Tai Sing & Co." as Yap Seng, Severo Eugenio Lo, A. Y. Kelam and Ng the firm name. Khey Ling, the latter represented by M. Pineda Tayenko, then executed a power of attorney in As to the alleged death of the manager of the favor of Sy Tit by virtue of which Sy Tit, company, Say Lian Ping, before the attorney-in- representing "Tai Sing & Co., obtained a credit of fact Ou Yong Kelam made the loans, the trial court P20, 000 from PNB, executing a chattel mortgage did not find this fact proven at the hearing. But on certain personal property belonging to "Tai Sing even supposing that the court had erred, such an & Co. error would not justify the reversal of the judgment, for two reasons at least: (1) Because Ou Yong PNB now claims a total amount of P20, 239.00, Kelam was a partner who contracted in the name of together with interest on the P16, 518.74 debt, at 9 the partnership, without any objection of the other per cent per annum from January 1, 1925 until fully partners; and (2) because it appears in the record paid, with the costs of the trial. that the appellant-partners appointed Sy Tit as manager, and the latter obtained from PNB the Respondent Eugenio Lo sets up, as a general credit in current account, the debit balance of defense, that "Tai Sing & Co. was not a general which is sought to be recovered in this action. partnership, and that the commercial credit in current account which "Tai Sing & Co. obtained Defendants also assign error to the action of the from the petitioner had not been authorized by the trial court in ordering them to pay plaintiff, jointly board of directors of the company, nor was the and severally, the sums claimed with 9 per cent person who subscribed said contract authorized to interest on P16, 518.74, owing from them. Such make the same, under the article of copartnership. judgment against the appellants is in accordance The other defendants, Yap Sing and Ng Khey Ling, with article 127 of the Code of Commerce which answered the complaint denying each and every provides that all the members of a general one of the allegations contained therein. partnership, be they managing partners thereof or not, shall be personally and solidarily liable with Respondents now faulted the court when it held all their property, for the results of the transactions that the death of J. A. Say Lian Ping cannot made in the name and for the account of the extinguish the defendants' obligation to the plaintiff partnership, under the signature of the latter, and bank, because the last debt incurred by the by a person authorized to use it. commercial partnership "Tai Sing & Co., was that
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