Article 1816 applies in cases where third party creditors are concerned as it falls under the

heading of section 3. “Obligations of the Partners with Regard to Third Persons.” Article 1797
applies only where the issue is among the partners as it falls under the heading of Section
1, Chapter 2, which states: “Obligations of the Partners Among Themselves.” The pro rata
liability of partners to third persons under Article 1816 being a clear mandate of the law,
any stipulation changing or modifying such liability is void except as among the partners.

Refers to partnership obligations

Article 1816 which refers to the payment of partnership obligations arising from contracts
clearly imposes subsidiary and joint (pro rata) liability for contractual debts owing to third
persons upon all the partners, including industrial partners who ordinarily are not liable for
losses. The liability is subsidiary because the partners cannot be made answerable with
their separate property unless the partnership property has first been exhausted.

Pro rata liability – Literally, pro rata liability means proportionate distribution of liability. In
the law of obligations, the concurrence of two or more debtors in one and the same
obligation makes it prima facie a joint (pro rata) obligation, and the debts is presumed
divided into as many equal shares as there are debtors and each one of them is bound to
pay only his share.

Art. 1817. Any stipulation against the liability laid down in the preceding article shall be void,
except as among the partners.

Industrial partner cannot exempt himself from liability to third persons

Each one of the industrial partners is liable to third persons for the debts of the firm and if
he has paid such debts out of his private property during the life of the partnership, when
its affairs are settled he is entitled to credit for the amount so paid, and if its results that
there is not enough property in the partnership to pay him, then the capitalist partners must
pay him. Our conclusion is that neither on principle nor on authority can the industrial
partner be relieved from liability to third persons for the debts of the partnership.
Art. 1818. Every partner is an agent of the partnership for the purpose of its business,
and the act of every partner, including the execution in the partnership name of any
instrument, for apparently carrying on in the usual way the business of the
partnership of which he is a member binds the partnership, unless the partner so
acting has in fact no authority to act for the partnership in the particular matter, and
the person with whom he is dealing has knowledge of the fact that he has no such
liability.

An act of a partner which is not apparently for the carrying on of business of the
partnership in the usual way does not bind the partnership unless authorized by the
other partners.

Except when authorized by the other partners or unless they have abandoned the
business, one or more but less than all the partners have no authority to:

1. Assign the partnership property in trust for creditors or on the assignee’s promise
to pay the debts of the partnership.

2. Dispose of the goodwill of the business.

3. Do any other act which would make it impossible to carry on the ordinary
business of a partnership.

4. Confess a judgment.

5. Enter into a compromise concerning a partnership claim or liability.

6. Submit a partnership claim or liability to arbitration.

7. Renounce a claim of the partnership.

No act of a partner in contravention of a

restriction on authority shall bind the partnership to persons having knowledge of the
restriction.

Art. 1819. Where title to real property is in

the partnership name, any partner may convey title to such property by a conveyance
executed in the partnership name; but the partnership may recover such property
unless the partner's act binds the partnership under the provisions of the