PARTNERSHIP WWW 2019 – EH 401 ATTY.

ESPEDIDO

Legend:
Bold – Either Atty’s question or a sub-header/gist of the recitation
Italicized – Discussions in local dialect; could also mean comments of the editors or
personal opinion. Hehe!
Bracket [ ] – Atty’s jokes or segways
Red – Important/reminders

GR – General rule
XPN – Exception
Q – Question
A – Answer
OTOH – On the other hand

Note: We will try to improve as we go along the semester! 😊

September 5, 2019

How much should each partner contribute and how

do we divide the profits and losses among the
partners?
Qualify as to what kind of partner you are.

Type of Contribution Profits Losses

Partner
Capitalist 1. Agreement 1. Agreement 1. Agreement
Partner 2. Equal 2. In proportion 2. Agreement as
contributions to their to profits
contributions 3. In proportion to
their
contributions
Industrial Entire Just & equitable Exempted
Partners Industry

Situation:
Now, in a partnership, they decided that C will designate how
much each partner will get in terms of profit. In this case, A
contributed 10,000; B contributed 20,000; and C contributed
30,000. And the decision of C was A gets 50%, B gets 40%
and C gets 30%. Is the agreement valid?

A: No. The agreement cannot be pursued because the law

does not allow that the sharing of the profit be left to the
discretion of one of the partners.

Q: The heirs, however, complained about the

agreement. Can they complain?
They cannot.

In a contract of partnership, we have the principle of

liberality of contracts, wherein parties may stipulate any
provision as long as it is not contrary to law, morals, good
customs, public order or public policy. Under Article 1798 of
the Civil Code, a partner may only impugn the sharing of
profits if the parties agreed to entrust to a third person the
designation of the share of profits, and such designation is
manifestly inequitable.

In the case at bar, no partner (or heirs thereof) may impugn

for there was no designation to a third person. The sharing
of profits was based on the agreement of the parties.

[Tbh, we don’t know the correct answer in the last question

☹]

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