AEMILIANUM COLLEGE OF LAW

PARTNERSHIP, AGENCY AND TRUSTS LAW

1st Semester, A.Y. 2024-2025
ATTY. MARTIN GACIAS

I. AGENCY

A. Nature, Form and Kinds of Agency (Arts. 1868 - 1883)

a) Concept of Agency
b) Characteristics
c) Nature, Basis and Purpose

i. Orient Air Services & Hotel Representatives v. CA, G.R. No. G.R. No. 76931 May 29,
1991
ii. Eurotech Industrial Technologies, Inc. v. Cuizon, G.R. No. 167552, April 23, 2007
iii. Rallos v. Felix Go Chan & Sons Realty Corp., G.R. No. L-24332 January 31, 1978
iv. Air France v. CA, G. R. No. L-57339 December 29, 1983
v. Shell Co. of the Philippines vs. Fireman’s Insurance Co. of Newark G.R. No. L-8169,
January 29, 1957
vi. Manila Memorial Park Cemetery, Inc. vs. Linsangan
vii. International Exchange Bank (Union Bank) vs. Sps. Briones, G.R. No. 205657,
March 29, 2017
viii. Sps. Yulo vs. Bank of the Philippine Islands, G.R. No. 217044, January 16, 2019
ix. Victorias Millings Co. vs. Court of Appeals, G.R. No. 117356, June 19, 2000
x. Sps. Fernando vs. Continental Airlines Inc., G.R. No. 188288, January 16, 2012
xi. V-Gent, Inc. vs. Morning Star Travel and Tours, Inc., G.R. No. 186305, July 22, 2015
xii. Apex Mining Co., Inc. vs. Southeast Mindanao Gold Mining Corp., 492 SCRA 355

d) Parties to an Agency
1. Capacity of the parties
2. Acts that may be delegated to agents
i. Ong v. Court of Appeals, G.R. No. 119858, April 29, 2003

e) Elements of an agency
i. Spouses Viloria v. Continental Airlines, G.R. No. 188288, January 16, 2012

f) Determination of Existence of an Agency

i. Tuazon v. Heirs of Bartolome Ramos, G.R. No. 156262, July 14, 2005
ii. Angeles v. PNR, G.R. No. 150128, August 31, 2006
iii. Lim v. Court of Appeals, G.R. No. 107898 December 19, 1995
iv. Dominion Insurance Corporation v. CA, G.R. No. 129919 February 6, 2002

g) Nature of relations between the principal and the agent

i. Thomas v. Pineda, G.R. No. L-2411, June 28, 1951
ii. Valera v. Velasco, G.R. No. L-28050, March 13, 1928
iii. Cui v. Cui, G.R. No. L-7041, February 21, 1957

h) Agency distinguished from other contracts

i) Kinds of Agency
j) Forms of agency
k) Acceptance by an agent
i. Litonjua v. Eternit Corporation, G.R. No. 144805, June 8, 2006

l) Estoppel from denying agency

m) Agency by estoppel v. implied agency
i. Naguiat v. CA, G.R. No. 118375, October 3, 2003
ii. Calubad v. Ricarcen Development Corp., G.R. No. 202364, August 30, 2017
iii. Ayala Land Inc. vs. ASB Realty Corp., G.R. No. 210043, September 26, 2018

n) Sale of land through an agent

i. Cosmic Lumber Corp. v. CA, 332 Phil 948
ii. Alcantara v. Nido, G.R. No. 165133, April 19, 2010
 iii. San Juan Structural and Steel Fabricators, Inc. vs. Court of Appeals, G.R. No.
129459,
September 29, 1998
iv. Bautista-Spille vs. NICORP Management and Development Corporation, G.R. No.
214057, October 19, 2015

o) Agency presumed to be with compensation

i. Lim v. Saban, G.R. No. 163720, December 16, 2004
ii. Inland Realty Investment Service, Inc. v. CA, G.R. No. 76969 June 9, 1997
iii. Domingo v. Domingo, G.R. No. L-30573 October 29, 1971 287
iv. Philippine Health Care Providers, Inc. v. Estrada, G.R. No. 171052 January 28, 2008

p) General and Special Agencies

i. Siasat v. IAC, G.R. No. L-67889, October 10, 1985

q) Kinds of Agents
r) Attorney-in-fact
i. W.G. Philpotts vs. Philippine Manufacturing Co., G.R. No. L-15568, Nov. 8, 1919

s) Agency couched in general terms

i. Veloso v. CA, G.R. No. 102737 August 21, 1996

t) Acts of administration
u) Construction of agency contracts
i. Woodchild Holdings v. Roxas Electric, G.R. No. 140667 August 12, 2004

v) Special Power of Attorney

i. Gozun v. Mercado, G.R. No. 167812, December 19, 2006
ii. Barretto v. Tuazon, G.R. Nos. L-36811, 36827, 36840, 36872 March 31, 1934
iii. Home Insurance Co. v. US Lines Co., G.R. No. L-25593, November 15, 1967
iv. Estate of Lino Olaguer v. Ongjoco, G.R. No. 173312, August 26, 2008
v. St. Mary’s Farm Inc. v. Prima Real Properties, Inc., G.R. No. 158144 July 31, 2008
vi. PNB v. Sta Maria, G.R. No. L-24765, August 29, 1969
vii. BA Finance Corp. v. CA, G.R. No. 94566 July 3, 1992
viii. Philippine Sugar Estates Development Co. v. Poizat, G.R. No. L-23352 December
31, 1925

w) Scope of authority to sell/mortgage

i. Bicol Savings and Loan Association v. CA, G.R. No. 85302 March 31, 1989

x) Scope of special power to compromise

y) Authority of an Agent
i. Guinhawa v. People, G.R. No. 162822 August 25, 2005

z) Kinds of principals
1. Agency with an undisclosed principal
i. Ortega v. Bauang FACOMA, G.R. No. L-13547, December 29, 1959
ii. Gold Star Mining Co., Inc. v. Lim - Jimena, G.R. No. L-25301 October 26, 1968
iii. Beaumont v. Prieto, 41 Phil 670 (1921)

B. Obligations of the Agent (Arts. 1884-1909)

a) General and specific obligations

b) Obligations of a person who declines agency
c) When not to carry out an agency
d) Conflict of interest
e) Obligations in case of loan
f) Obligation to render an account
i. Dumaguin v. Reynolds, G.R. No. L-3572, September 30, 1952
ii. Domingo v. Domingo, G.R. No. L-30573 October 29, 1971
iii. Murao v. People, G.R. No. 141485, June 30, 2005

g) Power to appoint sub-agent

i. Escueta v. Lim, G.R. No. 137162, January 24, 2007
h) Joint Agency
i) Liability of agent for interest
j) Duties of agent to third persons
i. PNB v. Ritratto Group, Inc.,G.R. No. 142616, July 31, 2001

k) Effect where third person is aware of limits of agent’s power

l) Scope of agent’s authority as to third persons
i. Bacaltos Coal Mines v. Court of Appeals, G.R. No. 114091, June 29, 1995
ii. Yu Eng Cho v. Pan American World Airways, Inc., G.R. No. 123560 March 27, 2000
iii. Eugenio v. CA, G.R. No. 103737 December 15, 1994
iv. Filipinas Life Assurance Company v. Pedroso, G.R. No. 159489 February 4, 2008

m) Ratification by the principal

n) Presentation of power of attorney
o) Commission agent
1. Guarantee Commission
i. Behn, Meyer and Co. (Ltd.) vs. W.T. Nolting, G.R. No. 10620, November 8, 1916
ii. Commissioner of Internal Revenue vs. Cadwallader Pacific Co., G.R. No. L-20343,
September 29, 1976

p) Liabilities of agent for fraud/negligence

C. Obligations of the Principal (Arts. 1910-1918)

a) Obligations to agent
i. Barton vs. Leyte Asphalt and Mineral Oil Co., Ltd., G.R. No. L-21237, March 22, 1924
ii. Infante vs. Cunanan, G.R. No. L-5180, August 31, 1953
iv. Prats vs. Court of Appeals 81 SCRA 360
v. Manotok Brothers vs. Court of Appeals 221 SCRA 224

b) Liability to third persons

i. Domingo v. Robles, 453 SCRA 812 (2005)
ii. Rural Bank of Milaor v. Ocfemia, 325 SCRA 99 (2000)
iii. China Airlines v. Chiok, 407 SCRA 432 (2003)
iv. Air France v. CA, 126 SCRA 448 (1983)
v. Cuison v. CA, 227 SCRA 391 (1993)
vi. Cancio vs. Performance Foreign Exchange Corp., G.R. No. 182307, June 6, 2018

c) Estoppel by the principal

i. Citystate Savings Bank vs. Tobias, G.R. No. 227990, March 7, 2018

d) Obligation to advance funds

e) Obligation to indemnify agent for damages
f) Liability of co-principals
g) Contracting with the agent and principal regarding the same object
h) Liability for expenses incurred by the agent

D. Modes of Extinguishment of Agency (Arts. 1919-1932)

a) Modes of Extinguishment of agency

i. Laviña v. CA, 171 SCRA 691 (1989)
ii. Perez v. PNB, 17 SCRA 833 (1966)
iii. Lopez vs. Court of Appeals, G.R. No. 177855, August 1, 2018

b) Revocation by principal
i. Diolosa v. CA, 130 SCRA 350 (1984)
ii. CMS Logging, Inc. v. CA, 211 SCRA 374 (1992)
iii. Valenzuela v. CA, G.R. No. 83122 October 19, 1990
iv. Lustan v. CA, 266 SCRA 683 (1997)
v. Garcia v. De Manzano, 39 Phil 577 (1919)
vi. Infante v. Cunanan, 93 Phil 693 (1953)
vii. Sunace International Management Services v. NLRC, G.R. No. 161757 January 25,
2006
viii. Dy Buncio v. Ong Guan Gan, 60 Phil 696 (1934)
 ix. Sevilla vs. Court of Appeals, G.R. No. L-41182-3, April 16, 1988
x. International Exchange Bank (Union Bank) vs. Sps. Briones, G.R. No. 205657,
March 29, 2017

c) Agency coupled with an interest

i. Bacaling v. Muya, 380 SCRA 714 (2002)
ii. Sevilla v. CA, 160 SCRA 171
iii. Del Rosario v. Abad, 104 Phil 648 (1958)
iv. Coleongco v. Claparols, G.R. No. L-18616, March 31, 1964
v. Buason vs. Panuyas, G.R. No. L-11415, May 25, 1959
vi. Biasaya Land Transportation Co., Inc. vs. Sanchez, G.R. No. 74623, August 31,
1987
vii. Pasno vs. Ravona, G.R. No. 31581, February 3, 1930
viii. Lim vs. Saban, G.R. No. 163720, December 16, 2004.

d) Withdrawal by the agent

e) Death of principal
i. Terrado v. CA, 131 SCRA 371 (1984)

II. PARTNERSHIP

A. Introduction

B. General Provisions (Arts. 1767-1783)

a) Concept of Partnership
b) Elements
i. Lim Tong Lim v. Philippine Fishing Gear Industries, Inc., G.R. No. 136448, November
3, 1999
ii. Navarro v. Court of Appeals, G.R. No. 101847, May 27, 1993
iii. Yulo vs. Yang Chiaco Seng, G.R. No. L-12541, August 28, 1959
iv. Commissioner of Internal Revenue vs. Suter, 27 SCRA 152
v. Aurbach vs. Sanitary Wares Manufacturing Corp., G.R. No. 75875, December 15,
1989
vi. Saludo vs. PNB, G.R. No. 193138, August 20, 2018

c) Features
d) Separate Juridical Personality
i. Villareal v. Ramirez, G.R. No. 144214, July 14, 2003
ii. Aguila v. Court of Appeals, G.R. No. 127347, November 25, 1999

e) Rules in determining existence of partnership

i. Philex Mining Corporation v. CIR, G.R. No. 148187, April 16, 2008
ii. Heirs of Jose Lim v. Lim, G.R. No. 172690, March 3, 2010
iii. Pascual v. CIR, G.R. No. 78133, October 18, 1988

f) Partnership distinguished from other legal relationships/entities

g) Object of Partnership
h) Effect of an unlawful partnership
i) Form of partnership contract
j) Registration of Partnership
i. Tocao et al. v. CA, G.R. No. 127405, October 4, 2000

k) Partnership with contribution of immovable property

i. Agad v. Mabato, G.R. No. L-24193, June 28, 1968
ii. Torres v. CA, G.R. No. 134559, December 9, 1999

l) Kinds of Partnership
m) Kinds of Partners
n) Limitations upon the right to form a partnership
i. Insular Life Assurance Co. v. Ebrado, G.R. No. L-44059, October 28, 1977
ii. CIR v. Suter, G.R. No. L-25532, February 28, 1969

o) Joint Venture Agreements

i. Aurbach v. Sanitary Wares Manufacturing Corporation, G.R. No. 75875, December
15, 1989
 ii. Mabuhay Holdings Corp. vs. Sembcorp Logistics, Ltd., G.R. No. 212734, December
5, 2018

C. Obligations of the Partners (Arts. 1784-1809)

a) Relations created by a contract of partnership

i. Catalan vs. Gatchalian, G.R. No. L-11248, April 22, 1958

b) Commencement and Term of Partnership

i. Ortega v. Court of Appeals, G.R. No. 109248, July 3, 1995

c) Obligations with respect to property contributed

i. Moran v. CA, G.R. No. L-59956, October 31, 1984
ii. Agad vs, Mabato, G.R. No. L-24193, June 28, 1968

d) Obligations with respect to contribution of money and money taken from partnership
coffers
i. Martinez v. Ong Pong Co, G.R. No. L-5236, January 10, 1910
ii. Liwanag v. Court of Appeals, G.R. No. 114398, October 24, 1997
iii. US v. Clarin, G.R. No. 5840, September 17, 1910

e) Industrial Partner
i. Evangelista & Co. v. Abad Santos, G.R. No. L-31684, June 28, 1973

f) Obligation of capitalist partner in case of imminent loss

g) Obligation of partner who collects debts
h) Obligation of partner who receives share of partnership credit
i) Obligation of partner for damages to partnership
i. Ona v. CIR, G.R. No. L-19342, May 25, 1972

j) Risk of loss of things contributed

k) Responsibility for amounts disbursed by a partner on behalf of the partnership
i. Agustin v. Inocencio, G.R. No. L-3745, October 26, 1907

l) Distribution of profits and losses

i. Criado vs. Hermanos, G.R. No. L-12371, March 23, 1918

m) Stipulation excluding a partner from profits or losses

n) Right to the management of the partnership
i. Taitong Cuachie & Co. V. Insurance Commission, G.R. No. L-55397, February 29,
1988
ii. Litton v. Hill, G.R. No. L-45624, April 25, 1939
iii. Goquiolay v. Sycip, G.R. No. L-11840, July 26, 1960

o) Partnership books
a) Inspection at any reasonable hour - Pardo v. Hercules Lumber Co. Inc., G.R. No. L-
2242, August 1, 1924

p) Fiduciary duty of partners

i. Tuazon v. Zamora, G.R. No. 39, May 19, 1903
ii. Teague v. Martin, G.R. No. 30286, September 12, 1929
iii. Lim Tan Hu v. Ramolete, G.R. No. L-40098, August 29, 1975

q) Prohibition against engaging in competing business

r) Right to a formal account of partnership affairs

D. Property Rights of a Partner (Arts. 1810-1814)

a) Partnership property v. partnership capital

b) Rights to specific partnership property
i. Navarro v. Escobido, G.R. No. 153788, November 27, 2009

c) Partner’s interest in the partnership

d) Effect of partner’s conveyance of his interest in the partnership
i. Realubit v. Jaso, G.R. No. 178782, September 21, 2011

e) Remedies of a separate judgment creditor of a partner

E. Obligations of the Partners with Regard to Third Persons (Arts. 1815-1827)

a) Requirements of a Firm Name

i. SEC Memorandum Circular No. 21, s. of 2013 or the Omnibus Guidelines and
Procedures on the Use of Corporate and Partnership Names
ii. Rule 3.02 Code of Professional Responsibility
iii. Article 1840 last par.
iv. Article 1846

b) Extent of Liability of Partners for Contractual Obligations of the Partnership

i. Island Sales, Inc. V. United Pioneers General Construction Company, G.R. No. L-
22493, July 31, 1975
ii. Liwanag vs. Workmen’s Compensation Commission, G.R. No. L-12164, May 22,
1959
iii. Guy vs. Gacott, G.R. No. 206147, January 13, 2016

c) Stipulations against liability of partners

d) Partners as agents of the partnership
e) Effects of conveyance of real property belonging to the partnership
f) Admissions by a partner
g) Notice to partners of matters affecting partnership affairs
h) Tort or breach of trust by a partner
i. Muñasque v. CA, G.R. No. L-39780, November 11, 1985
ii. J.T. Investment Corporation v. Spouses Ang, G.R. No. 174149, September 8, 2010

i) Partnership by estoppel
i. Lim Tong Lim v. Philippine Fishing Gear Industries
ii. Heirs of Tan Eng Kee v. CA, G.R. No. 126881, October 3, 2000
iii. Pioneer Insurance and Surety Corporation v. CA, G.R. No. 84197, July 28, 1989

j) Preference of partnership creditors in partnership property

F. Dissolution and Winding Up (Arts. 1828-1842)

a) Dissolution, winding up & termination distinguished

i. Ortega, et al. v. CA, G.R. No. 109248, July 3, 1995
ii. Emnace vs. Court of Appeals, G.R. No. 126334, November 23, 2001

b) Effect of Dissolution
c) Causes of Dissolution
i. Involuntary Insolvency of Campos Rueda and Co., G.R. No. L-18703, August 28,
1922
ii. Yu v. NLRC, G.R. No. 97212, June 30, 1993
iii. Laguna Transportation Co. v. SSS, G.R. No. L-14606, April 28, 1960
iv. Tocao v. Court of Appeals, G.R. No. 127405, October 4, 2000

d) Judicially Decreed Dissolution

e) Effect of dissolution on partners’ authority
f) Dissolution caused by act, death or insolvency of a partner
g) Power of partner to bind dissolved partnership to third persons
i. Singson v. Isabela Sawmill, G.R. No. L-27343, February 28, 1979

h) Effect of Dissolution on partner’s liability

i) Winding up of partnership affairs
i. Aldecoa and Co. vs. Warner, Barnes and Co., G.R. No. L-5242, August 6, 1910

j) Rights of partners in dissolution

i. Rojas vs. Maglana, G.R. No. 30616, December 10, 1990

k) Rescission of partnership contract

l) Liquidation and distribution of assets
i. Primelink Properties and Development Corporation v. Lazatin, G.R. No. 167379,
June 27, 2006
ii. PNB v. Lo, G.R. No. L-26937, October 5 1927
iii. Villareal v. Ramirez, G.R. No. 144214, July 14, 2003

m) Rights of creditors of dissolved partnership which is continued

i. Phil. Air Lines v. Balinguit, G.R. No. L-8715, June 30, 1956

n) Right of retired partner or estate of deceased partner when partnership business is

continued
i. De La Rosa v. Borja, G.R. No. L-28611, January 30 1929

o) Partner’s right to an account of interest in partnership

i. Fue Leung v. IAC, G.R. No. 70926, January 31, 1989

G. Limited Partnership (Arts. 1843-1867)

a) Definition
b) Characteristics of a Limited Partnership
c) Purpose
d) Distinction between General and Limited Partnership
e) Requirements for formation
f) Contribution
g) Liability for false statement
h) Liability of limited partner who participates in management
i) Rights, powers and liability of a general partner
j) Rights and liabilities of a limited partner
k) Effect of change in the relation of limited partners
l) Effect of retirement, death, etc. of a general partner
m) Rights of creditors of limited partner
n) Dissolution
o) Amendment of Certificate of Registration of Limited Partnership

GRADING SYSTEM:

Attendance and Recitation: 10%

Case Digest: 10%
Quiz: 10%
Midterm: 30%
Finals: 40%

Note:
Case Digests for cases under Agency shall be submitted during the MIDTERM EXAMINATION
Case Digests for cases under Partnership shall be submitted during the FINAL EXAMINATION
The digests shall be written on a yellow pad paper.

REFERENCE:
1. Comments and Cases on Partnership, Agency and Trusts (Hector De Leon)
2. Assigned cases