2.
Where the partnership in the course of
its business receives money or
property of a third person and the
money or property so received is
misapplied by any partner while it is
in the custody of the partnership.
Partnership bound by partner’s breach
of trust
The partnership is liable for the conversion
(misappropriation) of money or property
entrusted to the partnership by a third
person. The effect under Article 1824 is
the same whether by the partnership
and subsequently misappropriated by a
partner.
Art. 1824. All partners are liable solidarily
with the partnership for everything
chargeable to the partnership under
Articles 1822 and 1823.
Law imposes solidary liability
The law imposes solidary liability upon the
partners and the partnership in cases of
torts and acts of conversion by a partner
as provided in Art. 1824. It may be
stated that the liability of a partner for a
debt of the partnership depends upon
whether the debts is contractual or it
arises from tort or conversion. If it arises
from contract, the liability is subsidiary
and pro rata; if it arises from tort or
conversion, the liability is solidary.
Business partners solidarily liable
Arts. 1711 and 1712 of the New Civil
Code and Sec. 2 of the Workmen’s
Compensation Act reasonably indicate
that in compensation cases, the liability of
business partners should be merely joint
and not solidary, and one of them
happens to be insolvent, the amount
awarded to the dependents of the
deceased employee would only be
partially satisfied, which is evidently
contrary to the intent and purpose of the
law to give full protection to
and if he has made such representation
or consented to its being made in a
public manner he is liable to such
person, whether the representation has
or has not been made or communicated
to such person so giving credit by or with
the knowledge of the apparent partner
making the representation or consenting
to its being
made:
1. When a partnership liability results, he
is liable as though he were an actual
member of the partnership.
2. When no partnership liability results, he
is liable pro rata with the other
persons, if any, so consenting to the
contract or representation as to incur
liability, otherwise separately.
When a person has been thus
represented to be a partner in an
existing partnership, or with one or more
persons not actual partners, he is an
agent of the persons consenting to such
representation to bind them to the same
extent and in the same manner as
though he were a partner in fact, with
respect to persons who rely upon the
representation. When all the members of
the existing partnership consent to the
representation, a partnership act or
obligation results; but in all other cases it
is the joint act or obligation of the person
acting and the persons consenting to the
representation.
Estoppel – A preclusion, in law, which
prevents a man from alleging or denying
a fact, in consequence of his own
previous act, allegation, or denial of a
contrary tenor.
the employee.

Art. 1825. When a person, by words

spoken or written or by conduct,
represents himself, or consents to
another representing him to anyone, as
a partner in an existing partnership or
with one or more persons not actual
partners, he is liable to any such
persons to whom such representation
has been made, who has, on the faith of
such representation, given credit to the
actual or apparent partnership,
Person bound by his representation
A person who hold himself out as a partner in a business, or consents to his being so
held out, is liable on contracts made with third persons who deal with the persons
carrying on the business on the faith of the representation. He is stopped to deny the
apparent agency.

Art. 1826. A person admitted as a partner into an existing partnership is liable for all
the obligations of the partnership arising before his admission as though he had been a
partner when such obligations were incurred, except that this liability shall be satisfied
only out of partnership property, unless there is a stipulation to the contrary.