losses, he shall bear them alone. Partners,
The property rights of a partner
however, by stipulation may permit it. The
law permits him to carry on a business not
connected or competing with that of the
partnership. Law is silent on whether he can
engage in same line of business for the
account of another.
Prohibition still applies because of fiduciary
position imposing duties of utmost good
faith. He may not carry on any other business
in rivalry w/ the partnership.
Reason for prohibition
Fiduciary nature of relationship imposes
obligation of utmost good faith. Rule
prevents use of info obtained in course of
transaction of partnership business or
because of connection w/ firm regarding
business secrets and clientele of firm to its
prejudice.
Art. 1809. Any partner shall have the right to
a formal account as partnership affairs:
1. If he is wrongfully excluded from the
partnership business or possession of its
property by his co-partner;
2. If the right exists under the terms of any
agreement;
3. Provided by article 1807;
4. Whenever other circumstances render it
just and reasonable, Right of the partner
to a formal account.
General rule: During existence of
partnership, a partner is not entitled to a
formal account of partnership affairs.
Reason: rights of partner amply protected in
arts1805 and 1806. In addition, it would
cause much inconvenience and unnecessary
waste of time.
Exception: In the special and unusual
situations enumerated under art. 1809.
Right of partner to demand an accounting
w/o bringing about dissolution is a
necessary corollary to right to share in
profits. A formal account is a necessary
incident to the dissolution of the
partnership.
Partnership Partnership
property capital
Art. 1810.
are:
1. His rights in specific partnership
property;
2. His interest in the partnership;
3. His right to participate in the
management, extent of property rights
of a partner.
Principal Rights
1. Rights in specific partner property;
2. Interest in partnership;
3. 3. Right to participate in
management.
RELATED RIGHTS
1. Right to reimbursement for amounts
advanced to partnership and to
indemnification for risks inconsequence
of management (art. 1796).
- The partner is entitled to be reimbursed
for any money they have paid out or be
compensated for any risks taken in their
management of the partnership.
2. Right of access and inspection of
partnership books (art. 1805).
- The right to access and inspect records
and documents related to the
partnership.
3. Right to true and full information of all
things affecting partnership (art. 1806).
- Partners in a partnership have the right
to know all information that affects the
partnership.
4. Right to formal account of partnership
affairs under certain circumstances (art.
1809).
- Partners have the right to receive an
accounting of the partnership's financial
information when certain conditions
have been met.
5. Right to have partnership dissolved also
under certain conditions (arts.
18301831).
- Partners can end their partnership
under certain conditions.
Partnership property and
partnership capital distinguished
Changes Variable: its Constant: it
value value may remains
vary from day unchanged
today w/ as the
changes in amount is fix
market value by
agreement
of the
partners, and
is not
affected by
fluctuations
in the value
of the
partnership
property,
although it
may be
increased
and
decreased by
 partners;unanimous Ownership of certain property Property
consent of use by the partnership –
the partners. 1. Where there is no express agreement
that property
Assets Includes not The
2. A partner’s right in specific
Included only the aggregate partnership property is not assignable
original of the except in connection with the assignment of
rights of all the partners in the same
capital individual
property;
contributions, contributions
3. A partner’s right in specific
but also all made by the partnership property is not subject to
attachment or execution, except on a claim
property partners in against the partnership;
subsequently establishing
4. A partner’s right in specific
acquired or continuing partnership property is not subject to legal
support under art. 291 nature of a partner’s
because of the right in specific partnership property
the partnership.
Art. 1811 contemplates tangible property
partnership
but not intangible things. A partner is a
or w/
coowner w/ his partners of specific
partnership
partnership property, but the rules on
funds,
coownership do not necessarily apply. The
including
legal incidents of this tenancy in partnership
partnership
are distinctively characteristic of the
name and
partnership relation. They are as follows:
goodwill.
used by a partnership constitutes Art. 1811. A partner is co-owner with his
partnership property, such use does not partners of specific partnership property.
make it partnership property, and whether it The incidents of this co-ownership are such
is so depends on the intention of the parties, that;
w/c may be shown by proving an express
agreement or acts of particular conduct. The 1. A partner, subject to the provision of this
intent of the parties is the controlling factor. title and any agreement between the
Property acquired by a partner with partner, has an equal right with his partners
partnership funds – Unless a contrary to possess specific partnership property for
intention appears, property acquired by a partnership purposes; but he has no right to
partner in his own name w/ partnership possess such property for any other purpose
funds is partnership property. However, without the consent of his
if the property was acquired after dissolution
but before the winding up of the partnership Equal rights of possession - Ordinarily, a
affairs, it would be his separate property but partner has an equal right to possess specific
he would be liable to account to the partnership property for partnership
partnership for the funds used in its purposes. None of the partner scan
acquisition. possesses and uses the specific
partnership property other than for
Property acquired with partnership funds is partnership purposes w/o the consent of
usually considered to be owned by the the other partners. Should any of them use
partnership, but if it is acquired after the property for his own benefit, he must
dissolution but before the partnership is account, like a stranger, to the others for the
wound up, it is the partner’s separate profits derived there from or the value of his
property but they are liable to reimburse the wrongful possession or occupation. A
partnership for the funds used to acquire it. partner wrongfully excluded from
possession of partnership property by a co-
partner has a right to formal account and
may even apply for a judicial decree of
dissolution. On the death of a partner, his
right in specific partnership property vests in
the surviving partners. By agreement, the
right to possess specific partnership
property may surrender. In the absence of
special agreement, however, neither partner
separately owns, or has the exclusive right of
possession of any partnership property or
any proportional part thereof. Each has
dominion over the entire partnership
property. The possession of partnership
property by one partner is the possession of
all until his possession becomes adverse. A
partner cannot initiate title by adverse
possession until and unless he makes an
adverse claim.
Right not assignable - A partner cannot
separately assign his right to specific
partnership property but all of them can
assign their rights in the same property.
Reasons for non-assignability:
1. It prevents interference by outsiders in
partnership affairs;
2. It protects the right of other partners
and partnership creditors to have
partnership assets applied to firm debts;
3. It is often impossible to determine the
extent of a partner’s beneficial interest
in a particular partnership asset. Reason
for impossibility: Each partner, having a
beneficial interest in the partnership
property considered as a whole, has a
beneficial interest in each part. Where,
however, none of the above reasons
apply, an authorized assignment by a
partner of his right in specific partnership
property is void, but it may be regarded
as a valid assignment of the partner’s
interest in the partnership. The law
allows a retiring partner to assign his
rights in partnership property to the
partner(s) continuing the business.
Right limited to share of what remains after
partnership debts has been paid Strictly
speaking, no particular partnership property
or any specific or an aliquot part thereof can
be considered the separate or individual
property of any partner. The whole of
partnership property belongs to the
partnership considered as a juridical person,
and a partner has no interest in it but his
share of what remains after all partnership
debts are paid. Consequently, specific
partnership property is not subject to
attachment, execution, garnishment, or
injunction, w/o the consent of all the
partners except on a claim against the
partnership. For the same reason that the
property belongs to the partnership, the
partners cannot claim any right under the
homestead or exemption laws when it is
attached for partnership debts. However, a
judgment creditor may levy upon a
partner’s interest in the partnership itself
because it is actually his property, by means
of a “charging order.” The right of
the partners to specificpartnership
property is not subject to legal support
since the property belongs to
the partnership and not to the partners.
However, their interest in the partnership is.
The method of reaching a judgment debtor’s
interest in partnership property is
specifically set forth in art.1814.
Art. 1812. A partner’s interest in the
partnership is his share of the profits and
surplus.
Share of profits and surplus – The partner’s
interest in the partnership consists of his
share in the undistributed profits during the
life of the partnership as a going concern and
his share in the undistributed surplus after
its dissolution.
This means that each partner's share of the
partnership's profit and any remaining
surplus (assets, etc.) after dissolution of the
partnership is determined by the original
agreement and any subsequent changes to
that agreement.
Profits: the excess of returns over
expenditure in a transaction or series of
transactions; or the net income of the
partnership for a given period.
Surplus: the assets of the partnership after
partnership debts and liabilities are paid and
settled and the rights of the partners among
themselves are adjusted. It is the excess of
assets over liabilities. If the liabilities are
more than the assets, the difference
represents the extent of the loss.
Art.1813. A conveyance by a partner by his
whole interest in the partnership does not of
itself dissolve the partnership, or, against the
other partners in the absence of agreement,
entitle the assignee, during the continuance
of the partnership, to interfere in the
management or administration of the
partnership business or affairs, or to require
any information or account of the
partnership transactions, or to inspect the
partnership books; however it merely
entitles the assignee to receive the
accordance with his contract, the profits to
which the assigning partner would otherwise
be entitled.
In case of fraud in the management of the
partnership, the assignee may avail himself
of the usual remedies. In case of dissolution
of the partnership, the assignee is entitle to
receive his assignor’s interest and may
require an account from the date only of the
last account agreed to by all partners.
Effect of assignment of partner’s whole
interest in partnership.
- If a partner transfers their full interest in
the partnership, the partnership is not
necessarily dissolved and the assignee is
not allowed to manage the business,
seek information, or inspect books. They
are only entitled to receive profits
according to the contract. If fraud or
dissolution occurs, the assignee can take
appropriate legal action and will receive
the assignor's interest if dissolution
occurs.
A partner’s right in specific partnership
property is not assignable but he may assign
his interest in the partnership to any of his
co-partners or to a third Person irrespective
of the consent of the other partners, in the
absence of agreement to the contrary.
A partner has the right to transfer their
interest in a partnership to another partner
or a third person, regardless of the other
partners' consent, unless they have agreed
otherwise.
Rights withheld from assignee
1. To interfere in the management.
2. To require any information or account.
3. To inspect any of the partnership books.
No one can be compelled to be partners w/
someone else. The assignment does not
divest the assignor of his status and rights as
a partner nor operate as dissolution. The
law, however, provides the nonassigning
collaborates w/ a ground for dissolving
the partnership if they so desire.
The law does not force any partner to stay in
a partnership, and the assignment of one
partner's interest in the partnership does not
end the partnership. However, nonassigning
partners have the right to dissolve the
partnership if they choose.
Remedy of other partners
Dissolution of partnership not intended –
Many partnership agreements are made
merely as security for loans, the assigning
partner never intending to destroy the
partnership relation. If the assigning partner
neglects his duties after assignment, the
other partners may dissolve the partnership
under art. 1830. Dissolution of partnership
intended – A partner’s conveyance of his
interest in the partnership operates as
dissolution of the partnership only when it is
clear that the parties contemplated and
intended the entire withdrawal from the
partnership of such partner and the
termination of the partnership as between
the partners.
If a partner assigns their interest in a
partnership agreement, but does not intend
to dissolve the partnership, the other
partners can dissolve the partnership in
accordance with Article 1830. If the partner's
intent is clear that they wish to withdraw
from the partnership and terminate it, then
their assignment will dissolve the
partnership.
Rights of assignee of partner’s interest
1. To receive in accordance w/ his contract
the profits accruing to the assigning
partner;
The assigning partner will receive the profits
that they are entitled to under their
contract.
2. To avail himself of the usual remedies
provided by law in the event of fraud in
the management;
To use the legal options available if someone
has committed fraud in the business
management.
3. To receive the assignor’s interest in case
of dissolution;
To get the assignor’s share once the
partnership has ended.
4. To require an account of partnership
affairs, but only in case the partnership
is dissolved, and such account shall
cover the period from the date only of
the last account agreed to by all
partners. The purchaser of a partner’s
interest may apply to the court for
dissolution after the termination of the
specified term or undertaking or at any
time if the partnership is one at will.
To ask for an accounting of partnership
affairs when the partnership has ended,
taking into consideration the date from the
most recent period accepted by all partners.
The person buying a partner’s interests can
take court action to dissolve the partnership
after the specific term or commitment is up,
or anytime if it is a partnership at will.
Art. 1814. Without prejudice to the
preferred rights of the partnership creditors
on due application to a competent court by
any judgement creditor of the partner, the
court which entered the interest of the
debtor partner with payment of the
unsatisfied amount of such judgement debt
with the interest thereon; and may then or
later appoint a receiver of his share of the
profits, and of any other money due or to
fall due to him in respect of the partnership,
and make all other orders, directions and
accounts and inquiries which the debtor
partner might have made, or which
circumstances of the case may require. The
interest charged may redeem at any time
before foreclosure, or in any case of a sale
being directed by the court, may be
purchase without thereby causing
dissolution:
This article allows a judgement creditor of a
partner to apply to a court for payment of
their judgement debt with interest from the
partner's share of the profits of the
partnership. The court can also appoint a
receiver and make any other orders,
directions and inquiries that are necessary.
The judgement creditor also has the option
to redeem or purchase the interest before
foreclosure or sale is directed by the court
without causing the dissolution of the
partnership.
1. With separate property, by any one or
more of the partners;
2. With partnership property, by any one
or more of the partners with the consent
of all the partners a whose interest are
not so charged or sold, nothing in this
title shall be held to deprive a partner of
his right, if any, under the exemption
laws, as regards his interest in the
partnership.
Partners may sell or lend against their
interests with the consent of all other
partners, and this title does not prevent a
partner from claiming an exemption on their
interests under applicable laws.
Application for a charging order after
securing judgement on his credit
While a separate creditor of a partner cannot
attach or levy upon specific partnership
property for the satisfaction of his credit
because partnership assets are reserved for
partnership creditors, he can secure a
judgment on his credit and then apply to the
proper court for a “charging order”,
subjecting the interest of the debtor partner
in the partnership w/ the payment of the
unsatisfied amount of such judgment w/
interest thereon w/ the least interference w/
the partnership business and the rights of
the other partners. By virtue of the
charging order, any amount or portion
thereof w/c the partnership would
otherwise pay to the debtor-partner should
instead be given to the judgment creditor.
This remedy, however, is w/o prejudice to
the preferred rights of partnership creditors
whose claims should be satisfied first.
This sentence states that a creditor may not
take property from a partnership to satisfy
their debts but they can apply for a charging
order subjecting the interest of the debtor
partner to the payment of their judgment.
This allows the creditor to receive any
money that would otherwise be paid to the
debtor partner. This is done with the least
interference with the partnership business
and the rights of the other partners, with the
creditors receiving payment first in order of
priority.
Availability of other remedies
Art. 1814 have made this an exclusive
remedy so that a writ of execution will not
be proper. However, if the judgment debt
remains unsatisfied, the court may resort to
other courses of action notwithstanding the
issuance of the charging order.
If the judgment debt is not paid, the court
may use other remedies in addition to the
charging order.
Redemption or purchase of interest charged
Redemptioner – The interest of the
debtorpartner so charged may be redeemed
or purchased w/ the separate property of
any one or more of the partners, or w/
partnership property but w/ the consent of
all the partners whose interests are not so
charged or sold.
A redemptioner is someone who pays off a
partner's debt with either their own
personal assets or with the consent of the
other partners.
Redemption Price – The value of the
partner’s interest in the partnership has no
bearing on the redemption price w/c is likely
to be lower since it will be dependent on the
amount of the unsatisfied judgment debt.
The redemption price for the partner's
interest in the partnership is determined by
the amount of the unsatisfied judgment
debt, not the value of the partner's interest,
and it is likely to be lower than the value.
Right of redeeming non-debtor partner –
There deeming non-debtor partner does not
acquire absolute ownership over the debtor-
partner’s interest but holds it in trust for him
consistent w/ principles of fiduciary
relationship.
This sentence means that a non-debtor
partner has the right to redeem the debtor-
partner's interest, but they must do so in a
way that is consistent with the principles of
a fiduciary relationship.
Rights of partner under exemption laws A
partner cannot claim any right under the
homestead laws or exemption laws when
specific partnership property is attached for
partnership debt. W/ respect, however, to
the partner’s interest in the partnership as
distinguished from his interest in specific
partnership property, the partner may avail
himself of the exemption laws after
partnership debts have been paid. A
partner’s interest or share in the partnership
property is really his property.
A partner does not have any protection or
legal right against their interest in specific
partnership property when a debt is due
from the partnership. However, if
partnership debts have been paid, the
partner is still entitled to the protections of
exemption laws for their interest in the
partnership as a whole.
Art. 1815. Every partnership shall operate
under a firm name, which may or may not
include the name of one or more of the
partners, those who, not being members of
the partnership, include their names in the
firm name, shall be subject to liability of a
partner
Partners in a business must use a name for
the partnership that can include the name of
one or more of the partners; those who have
their name in the firm name but are not
partners are still liable like a partner.
Requirement of the firm name Meaning of
word “firm” – The name, title, or style under
which a company transacts business; a
partnership of two or more persons; a
commercial house. In its common
acceptation, the term implies a partnership.
The term is also used as synonymous with
“company,” “house,” and “concern.”
The application is under consideration
Meaning of phrase “under consideration” –
Currently being assessed or looked at.
Importance of having a firm name
A partnership must have a firm name under
which it will operate. A firm name is
necessary to distinguish the partnership,
which has a distinct and separate juridical
personality from the individuals composing
the partnership and from other
partnerships and entities.
The partnership must have a unique name
that will separate it from other individuals
and businesses. This name will represent
the partnership legally.
Right of the partners to choose firm
name The partners enjoy the utmost
freedom in the selection of the
partnership name. As a general rule, they
may adopt any firm name desired.
Use of misleading name – The partners
cannot use a name that is identical or
deceptively confusingly similar to that of
any existing partnership or corporation or to
any other name already protected by law or
is patently deceptive, confusing or contrary
to existing laws, as to mislead the public by
passing itself off as another partnership or
corporation, or its goods or services as those
of such other company.
Liability inclusion of name in the firm name
– Persons who, not being partners, include
their names in the firm name do not acquire
the rights of a partner but shall be subject
to the liability of a partner insofar as 3rd
Persons without notice are concerned. Such
persons become partners by estoppel. Art.
1815 does not cover the case of a limited
partner who allows his name to be included
in the firm name, orof a person continuing
the business of a partnership after
dissolution, who uses the name of the
dissolved partnership or the name of a
deceased partner as part thereof.
Persons who have their name included in a
company's name but are not partners do
not gain partner rights, but they will be held
liable to parties outside the company as
though they were partners. This is known as
"partner by estoppel". Article 1815 does not
apply to limited partners or people using a
dissolved partnership's name or a deceased
partner's name in their company.
Art. 1816. All partners, including industrial
ones, shall be liable pro rata with all their
property and after all the partnership assets
have been exhausted, for the contracts
which may be entered into in the name and
for the account of the partnership, under its
signature and by a person authorized to act
for the partnership. However, any partner
may enter into a separate obligation to
perform a partnership contract.
Partners are responsible for the contracts
made on behalf of the partnership, and all of
their property may be used to pay for them
if the partnership assets are not enough. A
partner may also take on a separate
responsibility to fulfill the Partnership
contract.
Article 1816 distinguished from article
1787
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.
Article 1816 is about the obligations
between partners and third parties, whereas
Article 1787 is about the obligations
between partners. Article 1816 deals with
the pro rata liability of partners to third
parties, which is a mandate of the law, and
any changes or modifications to this liability
are only valid between 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.
Partners are jointly and severally liable for
any contractual debts that arise from their
partnership, including industrial partners
who would not usually be liable for losses.
They are only liable after the partnership
property has 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.
Partners cannot agree to limit each other's
responsibility when it comes to their shared
legal obligations.
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.
Industrial partners cannot be relieved from
responsibility for the debts of the
partnership; they must bear the burden of
any debts owed to third parties. If an
industrial partner pays these debts from
their own private funds, they are entitled to
reimbursement from the other partners. In
the end, no matter the circumstances, the
industrial partner will remain liable for the
partnership’s debts.
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.
Each partner is authorized to take actions
related to the business of the partnership,
and these actions will bind the partnership,
unless the partner has no authority to act in
that particular matter, and the person they
are working with knows about the lack of
authority.
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.
Partners may not be held responsible for the
actions of one partner unless the other
partners have given approval.
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.
One or more partners, but less than all of
them, cannot assign partnership property to
settle debts without the consent of the other
partners, or if the other partners have left
the business.
2. Dispose of the goodwill of the business.
One or more partners, but less than all of
them, cannot dispose of the business's
reputation.
3. Do any other act which would make it
impossible to carry on the ordinary
business of a partnership.
One or more partners, but less than all of
them, cannot do anything to make it
impossible to run the ordinary business of a
partnership.
4. Confess a judgment.
One or more partners, but less than all
of them, cannot admit to a legal
judgment.
5. Enter into a compromise concerning a
partnership claim or liability.
One or more partners, but less than all
of them, cannot enter into a
compromise about a partnership
obligation.
6. Submit a partnership claim or liability to
arbitration.
One or more partners, but less than all of
them, cannot submit a partnership
obligation to arbitration.
7. Renounce a claim of the partnership.
One or more partners, but less than all of
them, cannot give up a partnership right.

No act of a partner in contravention of a
restriction on authority shall bind the
partnership to persons having knowledge of
the restriction.
If a partner does something
outside their authority in the
partnership, the partnership
is not responsible to any
outsiders who know 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 first
paragraph of article 1818, or unless such
property has been conveyed by the grantee
or a person claiming through such grantee to
a holder for value without knowledge that
the partner, in making the conveyance, has
exceeded his authority.
Any partner can transfer ownership of real
estate owned by the partnership as long as
their actions do not exceed their authority
and the buyer is unaware of the lack of
authority.
Where title to real property is in the name of
the partnership, a conveyance executed by a
partner, in his own name, passes the
equitable interest of the partnership,
provided the act is one within the authority
of the partner under the provisions of the
first paragraph of Article 1818.
Conveyance of real property owned by a
partnership is legally valid when a partner
signs the document in their own name, if
they have the authority to do so according to
Article 1818.
Where title to real property is in the name of
one or more but not all the partners, and the
record does not disclose the right of the
partnership, the partners in whose name the
title stands may convey title to such
property, but the partnership may recover
such property if the partners’ act does not
bind the partnership under the provisions of
the first paragraph of Article 1818, unless the
purchaser or his assignee, is a holder for
value, without knowledge.
If the title of real property is held under the
name of some partners but not all, the
partners whose names appear on the title
may sell the property. However, the
partnership can reclaim the property if the
partners selling it did not have permission to
do so, unless the person or people buying
the property were a value holder and did not
have information of the partnership's rights.
Where the title to real property is in the
name of one or more or all the partners, or
in a third person in trust for the
partnership, a conveyance executed by a
partner in the partnership name, or in his
own name, passes the equitable interest of
the partnership, provided the act is one
within the authority of the partner under the
provisions of the first paragraph of
Article 1818.
If a partnership owns real
estate, a partner can transfer
the property's title on behalf of
the partnership if it is within
the scope of the partner's
authority.
Where the title to real property is in the
name of all the partners a conveyance
executed by all the partners passes all their
rights in such property.
If all the partners
own property
together, all of them
must sign for any
transfer of rights to
that property.
Art. 1820. An admission or representation
made by any partner concerning
partnership affairs within the scope of his
authority in accordance with this Title is
evidence against the partnership.
A statement made by a partner about
company activities which is allowed by law is
considered evidence against the
partnership.
Art. 1821. Notice to any partner of any
matter relating to partnership affairs, and
the knowledge of the partner acting in the
particular matter, acquired while a partner
or then present to his mind, and the
knowledge of any other partner who
reasonably could and should have
communicated it to the acting partner,
operate as notice to or knowledge of the
partnership, except in the case of fraud on
the partnership, committed by or with the
consent of that partner.
Partners must be informed of any matters
relating to the partnership. If a partner
knows about something or should
reasonably have known about it, the
knowledge is considered to be that of the
entire partnership, unless the partner was
involved in fraud on behalf of the
partnership.
Notice to partner is notice to partnership
Clearly a third person desiring to give notice
to a partnership of some matter pertaining
to the partnership business need not
communicate with all of the partners. If
notice is delivered to a partner, that is an
effective communication to the partnership.
This sentence means that if a third-party
wants to give the partnership some sort of
notification or notice, they only need to
communicate with one of the partners. This
notification to the partner will be regarded
as notification to the entire partnership.
Knowledge before becoming partner Where
the knowledge or notice had been received
by the partner before he became a partner,
and his partners are ignorant of this, and he
is not the partner acting in the particular
matter, there is no doubt that there has
been neither knowledge of nor notice to the
partnership.
Partner was unaware of knowledge prior to
becoming partner.
Art. 1822. Where, by any wrongful act or
omission of any partner acting in the
ordinary course of the business of the
partnership or with the authority of
copartners, loss or injury is caused to any
person, not being a partner in the
partnership, or any penalty is incurred, the
partnership is liable therefor to the same
extent as the partner so acting or omitting to
act.
If a partner acts or omits to act in an unlawful
way while conducting business transactions
on behalf of the partnership, the partnership
is responsible for any losses or costs incurred
by a third party.
Partner liable for wrongful act of a partner
The partners are liable for the negligent
operation of a vehicle by a partner, acting in
the course of business, which results in a
traffic accident.
If he is driving a partnership-owned vehicle
for purposes of his own, the acting partner
alone is liable it is not a partnership tort.
Partnership may proceed against negligent
partner
Where a partnership is liable to a third
person, there is a right of indemnity against
the partner whose negligence caused the
injuries.
If one partner is negligent, the other
partners have a right to be reimbursed for
any losses they incur due to that partner's
negligence.
Art. 1823. The partnership is bound to make
good the loss:
Where one partner acting within the
scope of his apparent authority receives
money or property of a third person
and misapplies it.
1. One person with authority misuses money
or property from another person.
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.
2. The partner misused money or property
given to the partnership by a third party
while it was in the partnership's
possession.
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.
No partner is allowed to assign any part of
their interest in the partnership to any other
person without the consent of all other
partners.
Art. 1824. All partners are liable solidarily
with the partnership for everything
chargeable to the partnership under
Articles 1822 and 1823.
All partners are
legally responsible
together with the
partnership for any
debts of the
partnership
according to 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.
1. Partners and the partnership are
responsible for any wrongdoings such as
torts or conversion.
2. A partner is liable for a debt of the
partnership depending on whether the debt
was caused by a contract or by a tort or
conversion.
3. If a debt was caused by a contract, the
partner's liability is shared amongst
everyone equally.
4. If a debt was caused by a tort or
conversion, the partner's liability is complete
and 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
the employee.
Business partners are generally responsible
for compensation claims in a joint, rather
than a solidary, manner. If one partner
happens to be insolvent, the amount of
compensation awarded to the employee's
dependents would not be fully paid, which
does not meet the intention of the law to
provide full protection to 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, 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:
If someone represents themselves, or
allows someone else to represent them, as
a partner in a business, to someone who
then gives them credit on the faith of that
representation, they are liable for that
credit, even if they did not communicate it
to the person who gave the credit.
When a partnership liability results, he
is liable as though he were an actual
member of the partnership.
1. He is held equally responsible for any
liabilities that arise from the partnership.
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.
2. If no one is liable on the contract, he is
liable proportionally with other parties who
agreed to the contract or statement that
caused the liability, otherwise he is liable
alone.
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.
Incoming partner liable for existing b.
obligations
A newly admitted partner is liable for
obligations of the partnership at the time of
his admission. The obligation of the
incoming partner shall be satisfied only out
c. of partnership property. This is not a
harsh rule because the incoming
partner
“partakes of the benefit of the partnership,
property, and an established business. He
has every means of obtaining full knowledge
of protecting himself, because he may insist
on the liquidation or settlement of existing
partnership debts. On
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.
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.
This means that if someone in a business
holds themselves out as a partner or
contributor to a business, they are legally
responsible for any agreements they
have made with third-party individuals or
companies that have accepted that
representation. The individual is not able
to deny the agency that was implied.
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.
Someone joining an existing partnership is
liable for any debts and other obligations of
the partnership that were created before
they joined, but are only responsible for
payment if the partnership has the funds to
do so, unless otherwise stated.
1. By the express will of any partner,
who must act in good faith, when
no definite term or particular is
specified.
2. By the express will of all the
partners who have not assigned
their interests or suffered them to
be charged for their separate debts
either before or after the
termination of any specified term or
particular undertaking.
d.
3. By the expulsion of any partner
from the business bona fide in
accordance with such a power
conferred by the agreement
between the partners
the other hand, the creditors have no means
of protecting themselves.

1. Any partner may terminate an

agreement without providing a specific
reason, as long as they act in good faith.

2. All partners must agree to assign or be

charged for any debts that were incurred
prior to or after the end of the partnership
agreement.

3. The partner who is removed from the

business in line with the agreement
between the partners cannot be protected
by the creditors.

Art. 1827. The creditors of the partnership

shall be preferred to those of each partner

as regards the partnership property. In contravention of the agreement

2 between the partners, where the
. Without prejudice to this right, the private circumstances do not permit a
creditors of each partner may ask the
dissolution under any other provision of
attachment and public sale of the share of
this article, by the express will of any
the latter in the partnership assets.
partner at any time.
C
Creditors of the partnership have priority
over those of individual partners, except
where the agreement between the
partners prevents it and the
circumstances allow a dissolution. Private
creditors of each partner can request the
attachment and public sale of their
partner's share in the partnership assets.

By any event which makes it unlawful

for the business of the partnership to be
carried on or for the members to
carry it on in partnership.