Article 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.
A partner who receives benefits or profits derived without consent of
others shall account for it as the partnerships.
If particular property is mortgaged and foreclose, the partner who uses
personal funds is able to get the property back will not become the new
owner, he will only be its trustee.
Article 1808
The capitalist partners cannot engage for their own account in any
operation which is of the kind of business 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 fund any profits accruing to him
from his transaction, and shall personally bear all the losses.
The article is with regards to a capitalist partner engaging in other
businesses.
Article 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 copartners
(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.
General Rule: During existence, a partner is not required to demand for
an accounting because his interest is already protected by two Articles of
the law, Article 1805 and Article 1806. But for specific cases, the law
provides that he can DEMAND for an accounting of the partnership
books.
Article 1810
The property rights of a partner are:
(1) His rights in specific partnership property
(2) His interest in the partnership
(3) His right to participate in the management.
The partner has the following rights:
(1) Right to the ownership of partnership property
(2) Right to his interest in the partnership
(3) Right to participate in partnership management
Article 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.
Article 1812
A partner’s interest in the partnership is his share of the profits and
surplus.
What is the partner’s interest in the partnership?
(1) DURING operations, the partner’s interest is his share in profits and
losses
(2) AFTER operations/LIQUIDATION/DISSOLUTION, his interest is
in the surplus of partnership assets after all debts have been cleared.
Interest can be subject to attachment or execution because it belongs to
the partner, not the partnership.
Article 1813
A conveyance by a partner of his whole interest in the partnership does
not of itself dissolve the partner, 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 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.
Article 1814
Without prejudice to the preferred rights of a partnership creditor 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 dissolution:
(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 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.
Article 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.
Article 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.
Article 1817
Any stipulation against the liability laid down in the preceding article
shall be void, expect as among the partners.
Article 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 no 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.
Article 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 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.
Article 1820
An admission or representation made by any partner concerning the
partnership affairs within the scope of his authority in accordance with
this Title is evidence against the partnership.
Anything a partner says or admits, as long as it is concerning the
partnership affairs and it is within the scope of his authority, is sufficient
evidence against the partnership.
This article is a rule of evidence
In order that admission/representation made can be used as evidence,
the existence of the partnership must be established and proved first.
Article 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 his notice to or knowledge of the partnership,
except in the case of a fraud on the partnership, committed by or with
the consent of that partner.
Article 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 his co-partner, loss or injury is caused to any person, not being a
partner in the partnership, or any penalty is incurred, the partnership is
liable therefore to the same extent as the partner so acting or omitting to
act
Article 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.
Article 1824
All partners are liable solidarily with the partnership for everything
chargeable to
Article 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 consent
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.
Article 1826
A person admitted as a partner into an existing partnership is liable for
all the obligation of the partnership arising before his admission as
though he had been a partner when such obligation were incurred,
except that this liability shall be satisfied only out of partnership
property, unless there is a stipulation to the contrary. (
