Smith, Bell & Co., vs Aznar, C.A., 40, 0.6, 1882

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Andrada, Christopher BSBA – 3
Toos, Jovelyn BSBA – 3
Varquez, Ann Mary June BSBA – 4

(Smith, Bell & Co., VS Aznar, C.A., 40, 0.6, 1882)

Article 1802 – In case it should have been stipulated that none of the managing partners shall act without the consent of the others, the concurrence of all shall be necessary for the validity of the acts, and the absence or disability of any one of them cannot be alleged, unless there is imminent danger of grave or irreparable injury to the partnership.

In this article, it is clearly stipulated that any partner cannot engage in any transactions without the consent of the remaining partners. For example, if A, B, C and D are managing partners in ABCD partnership, if A will engage into transaction without the knowledge of the remaining partners, the said contract will be invalid since A did not have a consent from the remaining partners.

But there is opposition of this article, which states that: Consent of remaining partners not necessary in routine matters. This statement is applicable only if the said partner who will do transactions will be for the daily business operation and for the purpose of the business operation. The said partner will transact in the name of the firm since he/she is acting within his/her implied powers, and it is the usual operation, and the person dealing with a firm have a right to assume that the authority of the partner is co-extensive with the business transacted by his/her firm. Moreover, third persons are not as a rule bound to inquire on the partnership account or for his/her individual advantage.
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