CHAPTER 2
An industrial partner cannot engage in
OBLIGATIONS OF THE PARTNERS
聽 do so, the capitalist partners may either exclude
SECTION 1. - Obligations of the PartnersAmong
Themselves
Art. 1784. A partnership begins from the moment
of the execution of the contract, unless it is
otherwise stipulated. (1679)
Art. 1785. When a partnership for a fixed term or
particular undertaking is continued after the
termination of such term or particular undertaking
without any express agreement, the rights and
duties of the partners remain the same as they
were at such termination, so far as is consistent
with a partnership at will.
A continuation of the business by the partners or
such of them as habitually acted therein during
the term, without any settlement or liquidation of
the partnership affairs, is prima facie evidence of
a continuation of the partnership. (n)
Art. 1786. Every partner is a debtor of the
partnership for whatever he may have promised to
contribute thereto.
He shall also be bound for warranty in case of
eviction with regard to specific and determinate
things which he may have contributed to the
partnership, in the same cases and in the same
manner as the vendor is bound with respect to the
vendee. He shall also be liable for the fruits
thereof from the time they should have been
delivered, without the need of any demand.
(1681a)
Art. 1787. When the capital or a part thereof which
a partner is bound to contribute consists of goods,
their appraisal must be made in the manner
prescribed in the contract of partnership, and in
the absence of stipulation, it shall be made by
experts chosen by the partners, and according to
current prices, the subsequent changes thereof
being for account of the partnership. (n)
Art. 1788. A partner who has undertaken to
contribute a sum of money and fails to do so
becomes a debtor for the interest and damages
from the time he should have complied with his
obligation.
The same rule applies to any amount he may have
taken from the partnership coffers, and his liability
shall begin from the time he converted the amount
to his own use. (1682)
Art. 1789.
business for himself, unless the partnership
expressly permits him to do so; and if he should
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. (n)
Art. 1790. Unless there is a stipulation to the
contrary, the partners shall contribute equal
shares to the capital of the partnership. (n)
Art. 1791. If there is no agreement to the contrary,
in case of an imminent loss of the business of the
partnership, any partner who refuses to contribute
an additional share to the capital, except an
industrial partner, to save the venture, shall he
obliged to sell his interest to the other partners.
(n)
Art. 1792. If a partner authorized to manage
collects a demandable sum which was owed to
him in his own name, from a person who owed the
partnership another sum also demandable, the
sum thus collected shall be applied to the two
credits in proportion to their amounts, even
though he may have given a receipt for his own
credit only; but should he have given it for the
account of the partnership credit, the amount
shall be fully applied to the latter.
The provisions of this article are understood to be
without prejudice to the right granted to the other
debtor by Article 1252, but only if the personal
credit of the partner should be more onerous to
him. (1684)
Art. 1793. A partner who has received, in whole or
in part, his share of a partnership credit, when the
other partners have not collected theirs, shall be
obliged, if the debtor should thereafter become
insolvent, to bring to the partnership capital what
he received even though he may have given
receipt for his share only. (1685a)
Art. 1794. Every partner is responsible to the
partnership for damages suffered by it through his
fault, and he cannot compensate them with the
profits and benefits which he may have earned for
the partnership by his industry. However, the
courts may equitably lessen this responsibility if
through the partner's extraordinary efforts in
other activities of the partnership, unusual profits
have been realized. (1686a)
Art. 1795. The risk of specific and determinate
things, which are not fungible, contributed to the
partnership so that only their use and fruits may
be for the common benefit, shall be borne by the
partner who owns them.
If the things contribute are fungible, or cannot be
kept without deteriorating, or if they were
contributed to be sold, the risk shall be borne by
the partnership. In the absence of stipulation, the
risk of the things brought and appraised in the
inventory, shall also be borne by the partnership,
and in such case the claim shall be limited to the
value at which they were appraised. (1687)
Art. 1796. The partnership shall be responsible to
every partner for the amounts he may have
disbursed on behalf of the partnership and for the
corresponding interest, from the time the expense
are made; it shall also answer to each partner for
the obligations he may have contracted in good
faith in the interest of the partnership business,
and for risks in consequence of its management.
(1688a)
Art. 1797. The losses and profits shall be
distributed in conformity with the agreement. If
only the share of each partner in the profits has
been agreed upon, the share of each in the losses
shall be in the same proportion.
In the absence of stipulation, the share of each
partner in the profits and losses shall be in
proportion to what he may have contributed, but
the industrial partner shall not be liable for the
losses. As for the profits, the industrial partner
shall receive such share as may be just and
equitable under the circumstances. If besides his
services he has contributed capital, he shall also
receive a share in the profits in proportion to his
capital. (1689a)
Art. 1798. If the partners have agreed to intrust to
a third person the designation of the share of each
one in the profits and losses, such designation
may be impugned only when it is manifestly
inequitable. In no case may a partner who has
begun to execute the decision of the third person,
or who has not impugned the same within a period
of three months from the time he had knowledge
thereof, complain of such decision.
The designation of losses and profits cannot be
intrusted to one of the partners. (1690)
Art. 1799. A stipulation which excludes one or
more partners from any share in the profits or
losses is void. (1691)
Art. 1800. The partner who has been appointed
manager in the articles of partnership may
execute all acts of administration despite the
opposition of his partners, unless he should act in
bad faith; and his power is irrevocable without just
or lawful cause. The vote of the partners
representing the controlling interest shall be
necessary for such revocation of power.
A power granted after the partnership has been
constituted may be revoked at any time. (1692a)
Art. 1801. If two or more partners have been
intrusted with the management of the partnership
without specification of their respective duties, or
without a stipulation that one of them shall not act
without the consent of all the others, each one
may separately execute all acts of administration,
but if any of them should oppose the acts of the
others, the decision of the majority shall prevail. In
case of a tie, the matter shall be decided by the
partners owning the controlling interest. (1693a)
Art. 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. (1694)
Art. 1803. When the manner of management has
not been agreed upon, the following rules shall be
observed:
(1) All the partners shall be considered agents and
whatever any one of them may do alone shall bind
the partnership, without prejudice to the
provisions of Article 1801.
(2) None of the partners may, without the consent
of the others, make any important alteration in the
immovable property of the partnership, even if it
may be useful to the partnership. But if the refusal
of consent by the other partners is manifestly
prejudicial to the interest of the partnership, the
court's intervention may be sought. (1695a)
Art. 1804. Every partner may associate another
person with him in his share, but the associate
shall not be admitted into the partnership without
the consent of all the other partners, even if the
partner having an associate should be a manager.
(1696)
Art. 1805. The partnership books shall be kept,
subject to any agreement between the partners, at
the principal place of business of the partnership,
and every partner shall at any reasonable hour
have access to and may inspect and copy any of
them. (n)
Art. 1806. Partners shall render on demand true
and full information of all things affecting the
partnership to any partner or the legal
representative of any deceased partner or of any
partner under legal disability. (n)
Art. 1807. Every partner must account to the
partnership for any benefit, and hold as trustee for
it any profits derived by him without the consent
of the other partners from any transaction
connected with the formation, conduct, or
liquidation of the partnership or from any use by
him of its property. (n)
Art. 1808. The capitalist partners cannot engage
for their own account in any operation which is of
the kind of business in which the partnership is
engaged, unless there is a stipulation to the
contrary.
Any capitalist partner violating this prohibition
shall bring to the common funds any profits
accruing to him from his transactions, and shall
personally bear all the losses. (n)
Art. 1809. Any partner shall have the right to a
formal account as to partnership affairs:
(1) If he is wrongfully excluded from the
partnership business or possession of its
property by his co-partners;
(2) If the right exists under the terms of any
agreement;
(3) As provided by article 1807;
(4) Whenever other circumstances render it just
and reasonable. (n)
SECTION 2. - Property Rights of a Partner
Art. 1810. The property rights of a partner are:
(1) His rights in specific partnership property;
(2) His interest in the partnership; and
(3) His right to participate in the management. (n)
Art. 1811. A partner is co-owner with his partners
of specific partnership property.
The incidents of this co-ownership are such that:
(1) A partner, subject to the provisions of this Title
and to any agreement between the partners, has
an equal right with his partners to possess
specific partnership property for partnership
purposes; but he has no right to possess such
property for any other purpose without the
consent of his partners;
(2) A partner's right in specific partnership
property is not assignable except in connection
with the assignment of rights of all the partners in
the same property;
(3) A partner's right in specific partnership
property is not subject to attachment or execution,
except on a claim against the partnership. When
partnership property is attached for a partnership
debt the partners, or any of them, or the
representatives of a deceased partner, cannot
claim any right under the homestead or exemption
laws;
(4) A partner's right in specific partnership
property is not subject to legal support under
Article 291. (n)
Art. 1812. A partner's interest in the partnership is
his share of the profits and surplus. (n)
Art. 1813. A conveyance by a partner of his whole
interest in the partnership does not of itself
dissolve the partnership, or, as 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
partnership transactions, or to inspect the
partnership books; but it merely entitles the
assignee to receive in accordance with his
contract the profits to which the assigning partner
would otherwise be entitled. However, in case of
fraud in the management of the partnership, the
assignee may avail himself of the usual remedies.
In case of a dissolution of the partnership, the
assignee is entitled to receive his assignor's
interest and may require an account from the date
only of the last account agreed to by all the
partners. (n)
Art. 1814. Without prejudice to the preferred rights
of partnership creditors under Article 1827, on due
application to a competent court by any judgment
creditor of a partner, the court which entered the
judgment, or any other court, may charge the
interest of the debtor partner with payment of the
unsatisfied amount of such judgment debt with
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, accounts and inquiries which the
debtor partner might have made, or which the
circumstances of the case may require.
The interest charged may be redeemed at any time
before foreclosure, or in case of a sale being
directed by the court, may be purchased without
thereby causing a dissolution:
(1) With separate property, by any one or more of
the partners; or
(2) With partnership property, by any one or more
of the partners with the consent of all the partners
whose interests 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. (n)
聽
SECTION 3. - Obligations of the Partners
WithRegard to Third Persons
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 the liability of a partner. (n)
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. (n)
Art. 1817. Any stipulation against the liability laid
down in the preceding article shall be void, except
as among the partners. (n)
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 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.
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 good-will 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. (n)
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.
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.
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.
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.
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.
(n)
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.
(n)
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. (n)
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 co-partners, 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. (n)
Art. 1823. The partnership is bound to make good
the loss:
(1) Where one partner acting within the scope of
his apparent authority receives money or property
of a third person and misapplies it; and
(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. (n)
(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. (n)
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. (n)
Art. 1827. The creditors of the partnership shall be
preferred to those of each partner as regards the
partnership property. Without prejudice to this
right, the private creditors of each partner may ask
the attachment and public sale of the share of the
latter in the partnership assets. (n)
聽

Art. 1824. All partners are liable solidarily with the

partnership for everything chargeable to the
partnership under Articles 1822 and 1823. (n)
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:
(1) When a partnership liability results, he is liable
as though he were an actual member of the
partnership;