ARTICLE 1789

INDUSTRIAL
PARTNER
2022 October LAW2
 ARTICLE 1789
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.
As a general rule, industrial partners cannot engage in another
business apart from the partnership business.

Since an industrial partner

promised to contribute his
service then it is only exclusive
to the partnership hence, he
can no longer divide it with
other businesses.

The exception, however, was when the

other partners allowed him to engage in
another business.
What if the industrial partner violates the
prohibition to engage in another business?

Remedies:
The partners can exclude the industrial
partner in the partnership plus recovery of
damages.
Avail themselves of the benefits that the
industrial partner may have obtained in the
other business plus damages.
Kathleen and Andy are capitalist partners while Zuma
is an industrial partner in the ABAKADA partnership.
The partnership is engaged in merchandising
business. Hence, without the consent of Kathleen and
Andy, Zuma put up a business that manufactures
stationaries to supply the ABAKADA partnership.

In this case, Andy and Kathleen may exclude Zuma from the
partnership or avail themselves of the benefits Zuma have
obtained from the manufacturing business, with a right to
damages in either case.