INTRODUCTION Brief Historical Background
1st Sem; 2003
the Roman law, the law merchant and equity, and the common law courts. Governing law in our jurisdiction Before the new Civil Code, commercial or mercantile partnerships were governed by the Code of Commerce and non-commercial or civil partnerships by the old Spanish Civil Code. The new Civil Code superseded the old Civil Code and expressly repealed in toto the provisions in the Code of Commerce relating to partnerships. Consequently, the new Civil Code provisions are intended to provide all the rules regarding partnerships. There is no more distinction between commercial and civil partnerships. The partnerships contemplated are those formed for private interest or purpose. Sources of our law on partnership The Civil Code provisions on partnership were mostly taken from the old Civil Code and from the US’s Uniform Partnership Act and the Uniform Limited Partnership Act. Some provisions were taken from the Code of Commerce as well as from the opinions of civilians. New rules were also formulated by the Code Commission.
Development of partnership – The earliest form of conducting business was the single entrepreneur ownership plan (one individual). Under this system, growth of the business was limited (limitation of capital, skill or knowledge) and so partnership was developed. Ancient origin of partnership as a business organization – Development of partnership often credited to the Romans. Historically, partnership was used long before the Romans. As early as 2300 B.C. the Babylonian system of laws provided for regulation of partnership. Commercial partnerships at that time were generally for single transactions or undertakings. Following the Babylonian period, there were clear-cut references to partnerships in Jewish law. The relative newness of the law of partnership – Despite its long history of use, there is not a correspondingly long line of precedents and decisions dealing with the subject. This is because English courts of justice scarcely dealt with the subject. Disputes between merchants were disposed of by special courts. The law of merchants – In the Middle Ages, merchants had a special and peculiar kind of law that was applicable to them and their legal affairs. During this period, the common law courts of England were slow and methodically exact as to form. Merchants moved more rapidly than the law and required speedier justice. Hence, the special courts. English law of partnership – In time the special courts were discontinued and the law courts took over. Chief Justice, Lord Mansfield sought to establish a common law for commercial matters. It was not until the latter years of the 18th century that the law of partnership as we know it today began to assume both form and substance. In 1778, Lord Mansfield decided a case that dealt with the rights of partnership. In 1794, William Watson wrote a text on partnership. Beginning of law of partnership – These two sources mark the beginning of printed precedents and the publication of the principles of law in partnerships. Increase in use of partnership and complexity of business brought forth a rapid succession of decisions on partnerships. American Uniform Acts – Attempt made in US to secure uniformity of state laws dealing with partnership. The Uniform Partnership Act and the Uniform Limited Partnership Act helped to achieve this uniformity. The Uniform Partnership Act is similar with England’s Partnership Act of 1890. English settlers brought the partnership concept to their new country as part of the common law. Modern partnership law contains a combination of principles and concepts developed from three sources: Helen C. Arevalo 1
CHAPTER 1. GENERAL PROVISIONS Art. 1767. By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. Two or...