BIBLIOGRAFÍA. Alcántara de la Fuente, M

3 Major property rights of a partner: 1.) Right in specific partnership property; 2.) Interest in the partnership; and

3.) The right of the partner to participate in the management of the business of the partnership. Property rights considered as minor:

1.) Right to have access to the books of the partnership;

2.) Rght to demand for a formal accounting. Q: Can a partner demand for a formal accounting at any time?

A: No. The law will only give a right to a formal accounting under very specific circumstances. Why? Because a partner already has access to the books, thus, it may be unnecessary to demand for a formal accounting at any time.

Right in specific partnership property:

Under the law, a partner is a co-owner with the other partners as to specific partnership property. Again, he is a co-owner with his partners and NOT with the partnership over specific partnership properties.

Q: How could a person be a co-owner of a property owned by another if he is not a co- owner of that other person? The owner is the partnership. How can a partner be a co-owner of that property if he is not a co-owner with the partnership?

A: Other authors would say that the problem with this provision is that it was copied from the Uniform Partnership Act of the United States, where a partnership has no separate and distinct personality, thus making them merely co-owners.

But, in fairness with the Code commission, the 2nd _{sentence would tell you that this co-} ownership has its own incidence. In other words, this is no ordinary co-ownership under the property law. That’s why some authors would call it co- ownership sui generis.

Q: Concretely, in property law, if two persons are co-owners of a parcel of land, can a co- owner sell his interest over the parcel of land without the consent or even knowledge of the other co-owner? Would that be a valid assignment of interest?

A: Yes. However, in specific partnership property, there can be no valid assignment of interest by one partner. The assignment of interest of a specific partnership property would only be valid if all the partners would likewise assign their interests. Q: May a creditor of a co-owner of a parcel of land levy upon such portion of the land interest over that land owned by the debtor / co-owner? A: Yes, there can be such valid levy.

Q: In partnership, can a creditor of a partner levy upon the rights of the partner over a specific partnership property?

A: That is not possible. Only partnership creditors can levy upon partnership assets or partnership property. This is different in the partner’s interest in the partnership for this interest in the partnership can be validly assigned by one of the partners

even without the consent or knowledge of the other partners.

Interest in the Partnership

Simply put, this is a partner’s share in the profit and surplus. Whatever is his share in the profit or surplus is his interest in the partnership.

Q: What would be the share of a partner in a partnership?

1.) Stipulation. For instance, in a partnership of 3 persons, they can agree that one may have 95% of the profits, while the 2 other partners may have 5% of the same respectively.

Q: What if, in such agreement, one of the partners was excluded in sharing in the profits?

A: Such stipulation is void. Take note that only such stipulation is void and not the whole partnership agreement.

Q: Thus, if the stipulation as to the sharing of the profits is void, or that there is no stipulation with this regard, what would be the sharing in the profits of the partners?

A: It will depend on their capital contribution. Q: What if one of the partners is an industrial partner?

A: By express provision of the law, he shall be given his share by determining the value of the service rendered. Thus, determine first the value of the service rendered, give the same to the industrial partners, then the balance will be distributed to the capitalist partners in accordance to their capital contribution.

BE: A, B and C are partners. In their partnership agreement, they agreed in the equal sharing of the profits. Thereafter, C assigned his whole interest in the partnership to X. X now demanded that he be allowed to participate in the management of the business of the partnership and also his share in the profits in the business of the partnership. Are the claims f X valid?

A: As to X’s claim t participate in the management of the business, he has no such right as an assignee. By express provision of the law, an assignee has no right to participate in the management of the business of the partnership, unless otherwise agreed upon. He will not even have the access to the books of the partnership. His only right would be to receive whatever the assigning partner may receive as share in the profits and in the surplus.

Q: If profits were declared, for instance, in the amount of 360,000, would the assignee have the right to share in the profits?

A: Yes. X is entitled to share of Php120,000, since the agreement is equal sharing of profits.

Right to participate in the management of the business of the partnership

BE: W, X, Y and Z formed a partnership. W and X contributed industry; Y contributed 50,000; Z contributed 20,000. In a meeting, the partners unanimously agreed to designate W and X as managing partners, such appointment having no stipulation as to their respective duties nor was there any statement that neither can act without the consent of the other. Thereafter, 2 persons applied for two positions: 1.) as secretary; and 2.) as an accountant. As far as the secretary is concerned, it was W and X who appointed the secretary, opposed by W and Z. The accountant was appointed by W concurred by Z, which was opposed by X and Y. Whose appointment would bind the partnership? A: This management arrangement is known as joint management. Any managing partner may execute acts which are merely acts of administration even if opposed by all the other partners, kung mag-isa lang sya. But, if there are two or more managing partners, they have to decide by a majority vote.

Q: Is the appointment of the secretary an act of administration?

A: Yes.

Q: Would it bind the partnership?

A: Yes, even if opposed by the other partners, the capitalist partners, the latter would not have any right for this is merely an act of administration well- within the powers of a managing partner.

Q: With regard to the accountant, take note that the appointment by W was opposed by another managing partner. How will this tie be resolved?

A: Under the law, this will be resolved by all the partners with the controlling interest. The partners with controlling interest will prevail.

Q: In this case, who has the controlling interest?

A: Y. The determination as to who has controlling interest depends on the capital contribution. Thus, an industrial partner is excluded in such cases. In this case, it is obvious that 50,000 is more than the capital contribution, and because Y opposed to the appointment, such appointment will not bind the partnership.

Other management arrangements are provided in Articles 1800, 1801, 1802, 1803.

TYPES OF MANAGEMENT: