An industrial partner cannot engage in business for himself, unless the partnership expressly permits him to do so; and if he should do so, the capitalist partners may either exclude him from the firm or avail themselves of the benefits which he may have obtained in violation of this provision, with a right to damages in either case.
Obligations of industrial partner.
An industrial partner is one who contributes his industry, labor, or services, which are his contribution to the common fun. (Limuco vs. Calina, [C. A] No. 10099-R, Sept. 9,1953.)
Unless the contrary is stipulated, he becomes a debtor of the partnership for his work or services from the moment of the commencement of the partnership. In effect, the partnership acquires an exclusive right to avail itself of his industry. Consequently, if he engages in business for himself, such act is considered prejudicial to the interest of the other partners.
Prohibition against engaging in business.
- As regards an industrial partner. – The prohibition is absolute and applies whether the industrial partner is to engage in the same business in which the partnership is engaged or in any kind of business. It is clear that the reason for the prohibition exists in both cases, which is to prevent any conflict of interest between the industrial partner and the partnership and to insure faithful compliance by said partner with his obligation.
- As regards capitalist partners. – The prohibition extends only to any operation which is of the same kind of business in which the partnership is engaged unless there is a stipulation to the contrary. (Art. 1808)
Remedies where industrial partner engages in business.
If the industrial partner engages in business for himself, without the express permission of the partnership, the capitalist partners have the right either to exclude him from the firm or to avail themselves of the benefits which he may have obtained.
- In either case, the capitalist partners have a right to damages. Note that the permission given to the industrial partners must be express to exempt him from liability.
- Although the law mentions only the capitalist partners, It is believed that industrial partners are also entitled to the remedy granted since they are equally prejudice by the act of their co-partner engaging in business for himself.
[Ayon po sa aking pagkakaintindi, ang isang kasosyo daw po sa isang industriya ay hindi maaaring makisali sa negosyo para sa kanyang sarili, maliban kung ang pakikipagtulungan ay malinaw na pinahihintulutan siyang gawin ito at kung dapat niyang gawin ito maaaring ibukod ng kapitalistang kapareho sa kanya o mapakinabangan ang kanilang mga benepisyo na maaaring nakuha niya sa paglabag sa probisyon na ito, na may karapatang mapahamak sa alinmang kaso. ]
Example:
Suppose that a partnership is engaged in a automobile repair shop. Arvie is the industrial partner and works only up to 5pm every working day. He must be expressed permission even if he says it to the capitalists partners everyday.
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Asked by equalize05 on coursehero.com A. X P6,000; Y P4,000; Z Nothing 2.
Which of the following is valid? A. Oral contract of partnership where a partner contributes real property with a value less than P3,000
1. X, Y and Z are partners, with X contributing P60,000; Y P40,000; and Z service. They agreed to divide the profits and losses in the following proportions: X, 35%; Y, 25%, Z, 40%. If the partnership incurred a loss of P10,000, how should that loss be shared by the partners?
B. X P3,500; Y P2,500; Z P4,000
C. X P5,000; Y P3,500; Z P2,000
D. X P4,500; Y P3,000; X P2,500
B. Oral contract of partnership where the capital is P3,000 or more
C. Written contract of universal partners of present properties between husband and wife.
D. None of them.
3. A partnership whereby the partners contribute to a common fund all the property actually belonging to them at the time of the constitution of the partnership, with the intention of dividing the same among themselves, as well as the profits which they may acquire therewith is called:
A. Universal partnership of all present property
B. Universal partnership of profits
C. Particular partnership
D. Partnership at will
E. None of the above
4. Bears the risk of things contributed to the partnership:
A. Contributing partner
B. Limited partner
C. Partner contributing usufructuary rights
D. All of the above
5. Three of the following are the effects if immovable property is contributed in a partnership but the contract did not appear in a public instrument. Which is the exemption?
A. A partnership has no judicial personality
B. The parties may compel each other to observe the required form
C. The parties may request the return of their capital contribution
D. The contract of partnership is void.
6. A partner whose connection with the partnership is open and public, such as by including his name in the firm name of the partnership is called:
A. Nominal partner
B. Ostensible partner
C. Secret partner
D. Dormant partner
E. None of the above
7. A partner who contributes money or property to the capital of the partnership is called:
A. Industrial partner
B. Capitalist partner
C. Capitalist-industrial partner
D. Nominal partner
E. None of the above
8. Refers to a partnership whereby the persons who represent themselves, or consent to another or others to represent them to anyone that they are partners:
A. General partnership
B. Limited partnership
C. Partnership by estoppel
D. None of the above
9. A and B were partners. A being the managing partner, invited C to associate with him in his share in the partnership. What are the rights of the partners?
A. A may have C an associate in his share even without B's consent
B. A may not have C as an associate because he is already B's partner
C. C may
become a partner upon invitation of A, the managing partner
D. B may refuse to accept C as A's associate due to conflict of interest.
10. A partnership which comprises all the profits that the partners may acquire by their work or industry during the existence of the partnership is called:
A. Universal partnership of all present property
B. Universal partnership of profits
C. Particular partnership
D. Partnership at will
E. None of the above
11. A and B orally agreed to form a partnership two years from today, each one to contribute P1,000. If at the arrival of the period, one refuses to go ahead with the agreement, can the other enforce the agreement?
A. Yes, because the partnership contract is not governed by the Statute of Frauds
B. Yes, because the prior agreement was voluntarily
C. No, because the agreement was merely oral and even
D. Yes, since the agreement is to be enforced after on from the making thereof, the same should be in
writing be enforceable.
12. Which of the following statements is incorrect?
A. An industrial partner who engaged in business for himself may be excluded from the partnership plus damages
B. An industrial partner may not engage in business for himself without the consent of his co-partner
C. A capitalist partner may engage in the same line of business in which the partnership is engaged
D. An offending capitalist partner may not be excluded from the partnership
13. A partnership is automatically dissolved, except:
A. By the death of any partner
B. By the insolvency of any partner or of the partnership
C. By the civil interdiction of any partner
D. By the insanity of any partner
E. All of the above
14. Which of the following statements is correct regarding the division of profits in a general partnership when the written partnership agreement only provides that losses be divided equally among the partners? Profits are to be divided:
A. Based on the partners ratio of contribution to the partnership
B. Based on the partners participation in day to day management
C. Equally among the partners
D. Profits will be divided according to the managing partner.
15. A is the capitalist partner and B the industrial partner. A is engaged personally in the same kind of business the partnership is engaged in
A. If there are losses, the partnership will bear the losses
B. If there are profits, the profits will be
shared by A and the partnership
C. If there are profits, A will give the profits to the partnership
D. A will be excluded from the partnership and pay damages
16. Three of the following do not prove the existence of a valid partnership. Which is the exception:
A. The sharing of gross receipts
B. There is the intention of dividing the profits among themselves
C. Receipts by a person of a share of the profits for payment of a partnership debt by installments.
D. When two
or more persons are co-owners and they share correspondingly in the profits made from the sale or use of their property.
17. A, B and C are partners of A Co. by contributing P10,000; P20,000 and services, respectively, to the capital. After 5 years, the assets of the partnership is only P9,000. The share of C in the remaining asset is:
A. Equal to the share of A
B. Equal to the share of B
C. 9,000
D. Nothing
18. Can only be made with the consent of all partners:
A.
Waiver or compromise
B. Sell equipment
C. Borrow money
D. None of the above
19. A partner who contributes his work, labor, or industry to the common fund of the partnership is called:.
A. Industrial partner
B. Capitalist partner
C. Capitalist-industrial partner
D. Ostensible partner
E. None of the above
20. In case of an imminent loss of the business of the partnership, the following partners are required to give additional contribution, except:
A.
Capitalist partner
B. General partner
C. Capitalist-industrial partner
D. Industrial partner
E. None of the above
Answered by joabmumbo92 on coursehero.com
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