Partnership Law (Obligations of Partners with Regard to Third Persons Ch. 2 - Sec. 3)

True

Art. 1826 is not considered harsh for the new partner because he partakes in the benefits of the partnership property and an established business. He has every means of obtaining full knowledge of and protecting himself because he may insist on the liquidation or settlement of existing partnership debts.

Apparent authority

Based on the doctrine of estoppel

Preferred

Creditors of the partnership shall be _________ over the separate creditors of the partners as regards to the partnership property.

True

Estoppel does not create a partnership, but a partnership by estoppel exists to protect third persons from misrepresentation.

True

For acts of strict dominion or ownership or that which are not apparently for carrying on in the usual way the business of the partnership, except when authorized, the acts of the partner is NOT binding unto the partnership.

True

In the absence of an agreement to the contrary, all partners have equal rights in the management and conduct of the partnership.

True

In the choice of a firm name, no false, misleading and assumed name shall be used.

True

Industrial Partners are liable pro-rata for the partnership obligation, but they can ask for reimbursement for the amount they have contributed.

Separate

Liability is _________ when there is no partnership and not all but only some of those represented as partners consented to the representation or none of the partners in an existing partnership consented to the representation.

True

Liability is pro-rata when there is no partnership and all those represented as partners consented to the representation or not all of the partners of the partnership consents to the representation of the third person.

Pro-rata

Liability of partners for contractual obligations of a partnership.

True

Notice to or knowledge of a partner of any matter relation to partnership affairs operates as a notice to or knowledge of the partnership EXCEPT IN THE CASE OF FRAUD.

Equitable interest or title

One not duly recognize by law but in equity alone; it is a right or interest in a property which is imperfect and unenforceable but due to well-recognized equity principles, should and is convertible to legal rights.

True

Partner A executes an instrument for the partnership for the purpose of carrying out the usual way of business, yet he does not have the authority to act, but also that the third person does not have knowledge of his lack of authority. The instrument is binding on the partnership.

True

Partner who undertakes to bind his co-partners without authority is personally liable on such contract.

Solidary

Partner's liability arising from wrongful act or omission or breach of trust is _____________.

Subsidiary; secondary

Partners being personally liable is ________ or _________ because they only become liable when all the partnership assets have been exhausted.

False

Partnership liability results when some of the partners of an existing partnership consent to the representation of the third person.

False

Persons who are not partners but appear in the firm name shall acquire the rights of a partner but not be subject to liability.

False

Purchasers of a partner's share at the public sale becomes a partner.

True

Solidary liability applies even when the other partners did not participate or ratify or had knowledge of the act or omission. But they can recover their right from the guilty partners.

True

The firm name must be registered in the Department of Trade and Industry

True

The liability of a newly admitted partner as regards to obligations incurred before his admission should be satisfied only by his share in the partnership property.

False

The liability of the newly admitted partner as regards to the subsequent obligations arising after his admission is not extended to his personal or separate property.

Firm

The name, title or style under which a company transacts business. Also synonymous with company.

False

Third person is innocent and partner carries out acts under the limitations laid out in article 1819. The act is binding upon the partnership.

True

Under article 1826, a person admitted as a new partner in an existing partnership is liable for all the obligations of the partnership arising before his admission as though he had been a partner when such obligations were incurred, except that this liability shall be satisfied only out of partnership property, unless there is a stipulation to the contrary.

True

Without prejudice to the rights laid out in Art. 1827, private creditors may ask for the attachment and public sale of the share of the partner in the partnership assets.

Admission

__________ binds the partnership or a person's co-partners by virtue of mutual agency in a partnership.

Acts of a partner

1. Acts for apparently carrying on in the usual way the business of the partnership 2. Acts of strict dominion or ownership 3. Acts in contravention of a restriction on authority.

Limitations on the authority of a partner

1. Assign partnership property in trust for creditors 2. Dispose of goodwill 3. Carry out acts which would make it impossible for the partnership to carry on the ordinary business of the partnership 4. Confess a judgment 5. Enter into a compromise concerning partnership claim 6. Submit partnership claim or liability into arbitration 7. Renounce partnership claim

A person is a partner by estoppel when by his words or conduct he:

1. Directly represents himself to anyone as a partner in an existing partnership or in a non-existing partnership 2. Indirectly represents himself by consenting another representing him as a partner in an existing or non-existing partnership

Necessity for proving the existence of partnership:

1. Evidence other the admission itself 2. Declaration made by partner acting for the partnership 3. Declaration made in the presence of a partner

Cases of knowledge of a partner:

1. Knowledge of a partner acting in the particular matter acquired while a partner 2. Knowledge of a partner acting in the particular matter present to his mind 3. Knowledge of any other partner who reasonably could and should have communicated it to the acting partner.

Rights of third persons as to acting partner binding the partnership:

1. No duty to make inquiries as to acting partner's authority 2. Presumption that acting partner has authority to bind partnership 3. No right to assume that acting partner has unlimited authority

Requisites for solidary liability

1. Partner must be guilty of wrongful act or omission 2. Partner must be acting in the ordinary course of business or with the authority of his co-partners even if the act is not connected with the business

Liability for contractual obligations of the partnership

1. Partnership Liability 2. Individual Liability

Property can be recovered when:

1. The conveyance is not in the usual way of business 2. The third person had knowledge of the lack of authority

Requisites for partnership not to be bound by acts for apparently carrying on in the usual way the business of the partnership:

1. The partner so acting has in fact, no authority 2. Third person has knowledge of such lack of authority

Title passes when

1. Title in the partnership name passed in the partnership name 2. Title in the partner's name even if it is partnership property, passed in the partner's name Otherwise, only equitable or title interest is passed.

Prohibitions in Choosing A Firm Name

1. Use of Misleading name 2. Use of names of Deceased Persons

Estoppel

A bar which precludes a person from denying or asserting to the contrary that which he has established as the truth by his own deeds or representation, either express or implied.

False

A liability is the same as a loss.

True

A non-acting partner in a partnership engaged in a lawful business is not criminally liable for the criminal acts of another partner, but he is criminally liable if the partnership is involved in an unlawful enterprise with his knowledge or consent.

True

A partner may undertake a separate obligation for the partnership under his name.

Separate Juridical Personality

A partnership must have a firm name under which it will operate. It is necessary to distinguish the partnership which has a distinct and _______________________ from the individuals composing the partnership and from other partnership.

True

According to Art. 1817, any stipulation to the contrary of Art. 1816 shall be void, except as among the partners.

Quasi-delict or tort

Act or omission is called _________ when it does not constitute a crime or felony punishable by law.

False

Acts in contravention of a restriction on authority binds the partnership even if there is actual or presumptive knowledge of the third person.