CHAPTER 1: GENERAL PROVISIONS - Even though the partners, as provided by

this doctrine, can generally represent the

ART. 1767: partnership in its business affairs, it is
By contract of partnership, two or non-sequitur for the partners to be liable
more persons bind themselves to contribute against a lawsuit that is originally meant
money, property, or industry to a common for the partnership itself, because
fund, with the intention of dividing the profits remember that partnership is a juridical
among themselves. entity; unless, the legal fiction of a
different juridical personality is being used
Two or more persons may also form a for fraudulent, unfair, or illegal purposes.
partnership for the exercise of a profession.
PARTNERSHIP AT WILL
- Proportionate sharing of profits and losses - Partnership that does not fix its term
- In this case no specific undertaking exists,
REQUISITES OF A CONTRACT OF kasi the partnership has no definite period
PARTNERSHIP: of completion; also, a partnership for a
1. There must be a valid contract specific undertaking is a partnership that’ll
2. There must be a contribution of money, only last till the achievement of its
property, or industry to a common fund purpose.
3. The partnership must be organized for
gain or profit BEST EVIDENCE OF THE EXISTENCE OF A
4. The partnership should have a lawful PARTNERSHIP:
object or purpose, and must be - Unsold goods and uncollected receivables
established for the common benefit or
interest of the partners ARTICLE 1768:
The partnership has a juridical
2 TESTS TO DETERMINE THE EXISTENCE OF personality separate and distinct from that of
A PARTNERSHIP: each of the partners, even in case of failure to
1. First Test - if may intent ba to contribute comply with the requirements of Art. 1772,
2. Second Test - if may intent ba to divide par1.
profits among themselves
Artificial Person/Juridical Person
CHARACTERISTICS OF A CONTRACT OF - An entity created by law and given certain
PARTNERSHIP: legal rights and duties of a human being.
1. Consensual
2. Bilateral Hence, since a partnership has a juridical
3. Onerous personality, it means that it has its own rights and
4. Commutative obligations. Also, the partners cannot be held
5. Principal liable for the obligations of the partnership, and
6. Nominate it’s the partnership which should be impleaded in
7. Preparatory any litigation involving property under its name.
Kaya rin nominate ang isa sa mga characteristics
DOCTRINE OF DELECTUS PERSONAE nito. Therefore, sa isang partnership there are
- The right to choose with whom a person three persons involve, the partners and the
wishes to associate himself partnership itself.
- Under this doctrine, the partners also have
the power but not necessarily the right to
dissolve the partnership out of good faith
because if otherwise, the partner who
acted in bad faith to dissolve the
partnership will be subject for possible
liability for damages.
- Mutual agency
ARTICLE 1769:
Partnership Co-ownership
In determining whether a partnership exists,
these rules shall apply: Created by contract Created by contract &
1. Except as provided by Art. 1825, (expressed/implied) law
persons who are not partners as to
Has juridical Has no juridical
each other are not partners as to third
personality personality
persons;
2. Co-ownership or co-possession does Realization of profit Common enjoyment of
not of itself establish a partnership, a thing or right
whether such co-owners or co-
Dissolved by death or Not dissolved by death
possessors do or do not share any
incapacity of partner or incapacity; not more
profits made by the use of the than 10 yrs
property;
3. The sharing of gross returns does not
For Rule 4:
of itself establish a partnership,
Prima Facie - “based on first impression,” a
whether or not the persons sharing
disputable presumption. Meaning to say, the
them have a joint or common right or
receiving of a share in profit of a business makes
interest in any property from which the
a person a partner in that business, is a
returns are derived;
disputable presumption.
4. The receipt by a person of a share of
the profits of a business is prima facie
ARTICLE 1770:
evidence that he is a partner in the
A partnership must have a lawful
business, but no such inference shall
object or purpose, and must be established
be drawn if such profits were received
for the common benefit or interest of the
in payment:
partners.
a. As debt by installments or
otherwise;
When an unlawful partnership is
b. As wages of an employee or
dissolved by a judicial decree, the profits
rent to a landlord;
shall be confiscated in favor of the State,
c. As an annuity to a widow or
without prejudice to the provisions of the
representative of a deceased
Penal Code governing the confiscation of the
partner;
instruments and effects of a crime.
d. As interest on a loan, though
the amount of payment vary
Effects of unlawful partnership:
with the profits of the business;
1. The contract is void
e. As the consideration for the sale
2. Profits will be confiscated in favor of the
of a goodwill of a business or
government
other property by installments
3. Instruments or tools and proceeds of the
or otherwise.
crime shall be forfeited in favor of the
For Rule 1: the exception is when A and B are not
government
really partners but A misrepresents to C that they
4. Contributions of the partners shall not be
are, and B did not object or deny the partnership.
confiscated unless they fall under no.3
With this, the concept of partnership by
estoppel enters the frame wherein A and B are
Article 1771:
estopped or are now restricted to take back or
A partnership may be constituted in
contradict the existence of the partnership.
any form, except where immovable property
or real rights are contributed thereto, in which
For Rule 2: kapag may partnership may co-
case a public instrument shall be necessary.
ownership, pero a co-ownership doesn’t establish
a partnership.
Article 1772: Article 1775:
Every contract of partnership having a Associations and societies, whose
capital of three thousand pesos or more, in articles are kept secret among the members,
money, or property, shall appear in a public and wherein any one of the members may
instrument, which must be recorded in the contract in his own name with third persons,
Office of the Securities and Exchange shall have no juridical personality, and shall
Commission. be governed by the provisions relating to co-
ownership.
Failure to comply with the
requirements of the preceding paragraph Article 1776:
shall not affect the liability of the partnership As to its object, a partnership is either
and the members thereof to third persons universal or particular. As regard the liability
or the partners, a partnership may be general
- The non-compliance of the first paragraph or limited.
does not render the contract void, it’s still
valid; for convenience lang siya. CLASSIFICATION OF PARTNERSHIP:
[1] According to object:
Article 1773: Universal Partnership
A contract of partnership is void, a. UP of all present property
whenever immovable property is contributed - Dito, lahat ng properties na mayroon ang
thereto, if an inventory of said property is not bawat partner ay dapat icontribute to their
made, signed by the parties, and attached to common fund as well as all the profits that
the public instrument. they may acquire with the usage of those
properties.
- Only the inventories for contributed real b. UP of all profits
properties are needed for the partnership - Dito naman, all the profits na maa-acquire
to be valid as well. ng bawat partner from their respective
- This is to protect the third persons who will fields or work during the existence of the
transact with the partnership from any partnership should be contributed as well.
possible fraudulent act.
- Also, even though there is a public Particular partnership
instrument provided, long as their is no - determinate 'yung iaambag mo.
inventory which includes the designation
and description of the immovable [2] According to Liability:
property, the partnership will remain void General Partnership
and they cannot be subject to inscription - All partners are general partners; partners
in the Registry of Property. are liable up to the extent of their personal
or separate properties or hahabulin ng
Article 1774: creditors pati ang mga hindi nila
Any immovable property or an interest cinontribute sa partnership
therein may be acquired in the partnership
name. Title so acquired can be conveyed only Limited Partnership
in the partnership name. - One is general partner while the other is a
limited partner; kapag sinabing limited
- Kasi nga may juridical personality ang partner, he/she is only liable up to the
partnership hence, lahat ng immovable extent of his/her contributions to the
properties that will be acquired or partnership. Bali, ang hahabulin lang ng
conveyed after the formation of the creditors ay si general partner lang.
partnership must be under the designated
name of the partnership itself.
[3] According to duration: Article 1780:
Partnership at will A universal partnership of profits
- no specific period. comprises all that the partners may acquire
by their industry or work during the existence
Partnership with a fixed term of the partnership.
- The lifespan of the partnership has been
agreed upon by the partners. Movable or immovable property which
each of the partners may possess at the time
Partnership for a particular undertaking of the celebration of the contract shall
- the partnership will end once the specific continue to pertain exclusively to each, only
undertaking has been achieved. the usufruct passing to the partnership.

[4] According to representation to others: - [PAR2] Only the usufruct or the use and
Ordinary Partnership fruits of the properties are to be
Partnership by Estoppel contributed to the partnership for this
unlike sa UP of all property.
[5] According to the legality of its existence:
De jure Partnership Article 1781:
De facto Partnership Articles of universal partnership,
entered into without specification of its
Article 1777: nature, only constitute a universal partnership
A universal partnership may refer to all of profits.
the present property or to all the profits.
Article 1778: - Bali the presumption or in general,
A partnership of all present property is universal partnership entered into without
that in which the partners contribute all the specifications are considered are UP of
property which actually belongs to them to a Profits as it is less burdensome to the
common fund, with the intention of dividing agents of partnership.
the same among themselves, as well as all the
profits which they may acquire therewith. Article 1782:
Persons who are prohibited from
Article 1779: giving each other any donation or advantage
In a universal partnership of all present cannot enter into universal partnership.
property, the property which belongs to each
of the partners at the time of the constitution PERSONS WHO CANNOT ENTER INTO A
of the partnership, becomes the common UNIVERSAL PARTNERSHIP:
property of all the partners, as well as all the 1. Legally married spouses
profits which they may acquire therewith. - Because they may hide behind the
universal partnership their real
A stipulation for the common intention of donating properties or
enjoyment of any other profits may also be rights to each other
made; but the property which the partners 2. Persons living together as husband and fe
may acquire subsequently by inheritance, without a valid marriage
legacy, or donation cannot be included in 3. Persons who were guilty of adultery or
such stipulation, except the fruits thereof. concubinage at the time of the donation.
[this is in accordance with Art. 739 of the
- Bali sinasabi rito na ang future properties NCC stating the types of donations that
to be acquired by any of the partners shall are void.]
not be included in the said contributions. 4. Persons found guilty of the same criminal
offense, in consideration thereof: [Art. 739
of the NCC]
 a. There must be a criminal
conviction
b. It doesn’t matter whether the CHAPTER 2: OBLIGATIONS OF THE
donation was made before or after PARTNERS
the conviction
5. A person or persons and a public officer or Kinds of Partners:
his wife, descendants, and ascendants, by 1. As to contribution:
reason of his office. [Art. 739 of the NCC] a. Capitalist partners
- The reason is to prevent bribery b. Industrial partners
c. Capitalist-industrial partners
Article 1783: 2. As to liability:
A particular partnership has for its a. General partners
object determinate things, their use or fruits, b. Limited partners - have no right to
or specific undertaking, or the exercise of a participate in management
profession or vocation. 3. As to management:
a. Managing partners
b. Silent partners
c. Liquidating partners
4. As to third persons:
a. Ostensible partners
b. Secret partners
c. Dormant partners
5. As to membership:
a. Real partners
b. Partners by estoppel
6. As to continuation of the business
affairs after dissolution:
a. Continuing partners
b. Discontinuing partners
7. As to nature of membership:
a. Original partners
b. Incoming partners
c. Retiring partners
8. As to state of survivorship:
a. Surviving partners
b. Deceased partners
9. As to the effect of expulsion:
a. Expelled partners
b. Expelling partners
10. As to the value of the contribution:
a. Majority partners
b. Nominal partners
 contributed to the partnership, in the same
SEC 1: Obligations of the Partners Among cases and in the same manner as the vendor
Themselves is bound with respect to the vendee. He shall
also be liable for the fruits thereof from the
Article 1784: time they should have been delivered, without
A partnership begins from the moment the need of any demand.
of the execution of the contract, unless it is
otherwise stipulated. Obligation of every partner:
1. To contribute what had been promised
- This above article is the general rule and - Failure to make the contribution
the exception is that partners can agree will make the responsible partner a
on some other date for the start of the debtor of the partnership even
partnership. without demand.
- The remedy for a failure to deliver
Article 1785: the said contribution is specific
When a partnership for a fixed term or performance w/ interest and
particular undertaking is continued after the damages.
termination of such term or particular 2. To deliver the fruits thereof:
undertaking without any express agreement, - Fruits produced and to be
the rights and duties of the partners remain produced from the contributed
the same as they were at such termination, so property during its delivery shall
far as is consistent with a partnership at will. also be delivered.
3. To warrant:
A continuation of the business by the - The warranty of eviction here
partners or such of them as habitually acted implies that the agents of the
therein during the term, without any partnership have to assure the
settlement or liquidation of the partnership other agents of the partnership that
affairs, is prima facie evidence of a the partnership will enjoy full
continuation of the partnership. ownership of the specific things
that they will be contributing.
- [par.1] Bali, sinasabi lang sa article na ito - Eviction kasi represents the loss of
na if a partnership for a fixed term or for a the property or disturbing the buyer
particular undertaking is continued or hindi in the exercise of his ownership
nadissolve kahit after ng specified period rights or another transmitted right,
na napag-usapan or after magawa ‘yung resulting from the sale of a right to
objective ng partnership then, the rights a third party, which excludes fully
and duties vested upon the agents of the or in part, the right of the buyer.
partnership will remain untouched.
- [par.2] also, it’s stated that the Arerticle 1787:
continuation of the partnership even if it’s When the capital or a part therof which
supposed to end and the partners not a partner is bound to contribute consists of
settling any partnership affair or liquidating goods, their appraisal must be made in the
the assets are enough evidence for the manner prescribed in the contract of
continuation of the partnership. partnership, and in the absence of stipulation,
it shall be made by experts chosen by the
Article 1786: partners, and according to current prices, the
Every partner is a debtor of the subsequent changes thereof being for
partnership for whatever he may have account of the partnership.
promised.
- In the articles of partnership kasi, usually
He shall also be bound for warranty in ay indicated na ang proportion or hatian
case of eviction with regard to specific and ng profits/losses ng mga partners pero, in
determinate things which he may have the absence of such stipulation, under the
 law, the share of each partner in the
profits and losses shall be in proportion to Article 1790:
what he/she may have contributed. Unless there is a stipulation to the
- Kaya in cases where the partner contrary, the partners shall contribute equal
contributed goods or noncash contribution shares to the capital of the partnership.
siya, its monetary value shall be
determined in accordance to their Article 1791:
stipulation and in the absence of such, the If there is no agreement to the
partners will choose an expert to do so. contrary, in case of an imminent loss of the
business of the partnership, any partner who
Article 1788: refuses to contribute an additional share to
A partner who has undertaken to the capital, except an industrial partner, to
contribute a sum of money and fails to do so save the venture, shall be obliged to sell his
becomes a debtor for the interest and interest to the other partners.
damages from the time he should have
complied with his obligation. - Generally capitalist partners are not bound
to contribute additional capital but the
The same rule applies to any amount exceptions are if the stipulation provides
he may have taken from the partnership and if the business is suffering an
coffers, and his liability shall begin from the imminent loss [imminent means about to
time he converted the amount to his own use. happen]

- Coffers refer to the money or funds of an Article 1792:

organization that are usually in banks. If a partner authorized to manage
collects a demandable sum which was owed
Article 1789: to him in his own name, from a person who
An industrial partner cannot engage in owed the partnership another sum also
business for himself unless the partnership demandable, the sum thus collected shall be
expressly permits him to do so; and if he applied to the two credits in proportion to
should do so, the capitalist partners may their amounts, even though he may have
either exclude him from the firm or avail given a receipt for his own credit, the amount
themselves of the benefits which he may have shall be fully applied to the latter.
obtained in violation of this provision, with a
right to damages in either case. The provisions of this article are
understood to be without prejudice to the
- With regards to the shares in profits and right granted to the debtor by Art. 1252, but
losses: both the industrial and the only if the personal credit to the partner
capitalist partner’s shares depend on the should be more onerous to him.
stipulation and in the absence of such, the
share for the capitalist will depend on his - Firstly, if there is partner designated as a
or her contribution while for the industrial, manager then the law provides that all the
his or her share in profit must be just and partners are managers.
equitable to his or her service, and
industrial partner shall not be liable for Requisites of the Obligation of a managing
losses. partner who collects debt:
- The industrial partner must not engage in 1. Existence of at least 2 debts (one where
any kind of business unlike capitalist who the managing partner is the creditor and
may engage in business long as it’s a one where the partnership is the creditor)
different kind, because industrial must 2. Both debts must be demandable
devote his full time to the partnership
unless the partnership expressly permits So, for example, if A is the managing partner in
him to do so. AB Partnership and X is indebted to A for P100k
and also to the partnership for P300K, both
demandable on June 1, 2022, then, X paid P80K lessen this responsibility if through the
on July 1, 2022. partner's extraordinary efforts in other
activities of the partnership, unusual profits
If A issued a receipt for his own credit then, have been realized.
the payment must be divided proportionally to
her and to the partnership: - Bali, ang pinopoint ng article na ito is if
- To divide the payment, total first the debt one of the partners did something
of X to A & to the partnership [100k + prejudicial to the other partners or to the
300k = 400k] partnership itself, then he/she is liable to
- Next, to determine the proportion or share compensate for the damages AND he/she
of A in the payment of X: [(100k/400k) cannot offset the damages with his/her
(80k) = 20k] profit share or/and benefits na makukuha
- Do the same for the proportion of the from the partnership kasi in the first place
partnership. naman ay ‘yung mga nakuha man niyang
profits and benefits ay obligado talaga
If A issued a receipt for the credit of the siyang ibigay sa partnership and he/she is
partnership then, the entire payment will be also obligated not to cause any damages
applied to the partnership only. or negligence sa partnership. If iooffset
‘yung dalawa then, lalabas na you’re
Article 1793: contributing property or services to the
A partner who has received, in whole partnership to compensate for the
or in part, his share of a partnership credit, damages or negligence that you will cause
when the other partners have not collected and not for the partnership to achieve its
theirs, shall be obliged, if the debtor should undertaking.
thereafter become insolvent, to bring to the
partnership capital what he received even Article 1795:
though he may have given receipt for his The risk of specific and determinate
share only. things, which are not fungible, contributed to
the partnership so that only their use and
- Kumbaga, this article provides that once a fruits may be for the common benefit, shall be
partner claimed his/her partition from the borne by the partner who owns them.
partnership credit while the other partners
are not yet collecting theirs, then he/she If the things contributed are fungible,
will be obligated to share his part to other or cannot be kept without deteriorating, or if
partners once the debtor becomes they were contributed to be sold, the risk
insolvent. shall be borne by the partnership. In the
- Bali, kunwari si X may utang sa ABC absence of stipulation, the risk of the things
Partnership ng 30k, tapos si A siningil si X brought and appraised in the inventory, shall
for her part, bali let’s say supposedly ang also be borne by the partnership, and in such
haitian nila ay equally so tig-10k sila each. case the claim shall be limited, to the value at
Ngayon if si A naningil na ng 10k and which they were appraised.
naibigay na sa kaniya ni X, then few days
after ay naging insolvent si X hence, hindi 1. Specific and determinate things which are
na nakacollect si B and C, A is now not fungible
obliged to share her 10k to B and C. - Fungible means can be easily
replaced
Article 1794: - Dito, ang cinocontribute lang ay
Every partner is responsible to the the use of the object hence, the
partnership for damages suffered by it risk of loss is borne by the partner
through his fault, and he cannot compensate only
them with the profits and benefits which he
may have earned for the partnership by his 2. Fungible things
industry. However, the courts may equitably 3. Things contributed to be sold
 4. Things brought and appraised in the contributed capital, he shall also receive a
inventory share in the profits in proportion to his
capital.
[ 2, 3, and 4 are all transfer of ownership to the
partnership hence, the risk of loss will be borne - The industrial partner is not liable for
by the partnership AFTER the delivery of the losses kasi it will be unjust on his part
things that were contributed] considering his contributions to the
partnership
Article 1796: - Limitation kasi ng isang industrial partner
The partnership shall be responsible to ay he cannot engage in any business,
every partner for the amounts he may have may it be the same kind or a different one,
disbursed on behalf of the partnership and for unless the partnership expressly allowed
the corresponding interest, from the time the him to do so pero may consequences pa
expenses are made: it shall also answer to rin such as ‘yung profit share or benefits
each partner for the obligations he may have na dapat sa kaniya mapupunta ay
contracted in good faith in the interest of the mapupunta sa capitalists or the capitalist
partnership business and for risks in partner may exclude him from the firm
consequence of its management. (art. 1789). Hence, the industrial partner is
obligated to devote all his services to the
a. To refund the amounts of a partner may partnership alone.
have disbursed on behalf or for the
interest of the partnership Article 1798:
[if A disbursed 20k from his own money to If the partners have agreed to intrust to
buy office supplies for AB Partnership a third person the designation of the share of
then, AB Partnership has to reimburse A each one in the profits and losses, such
for her 20k] designation may be impugned only when it is
manifestly inequitable. In no case may a
b. To answer to each partner for obligations partner who has begun to execute the
he may have contracted into in good faith decision of the third person, or who has not
for the interest of the partnership impugned the same within a period of three
[dito naman, let's say A acquired a car months from the time he had knowledge
loan for the delivery ng products ng AB thereof, complain of such decision.
Partnership, ngayon instead of A being
the debtor for this obligation, sasagutin ng The designation of losses and profits
AB Partnership ang car loan na inacquire cannot be intrusted to one of the partners.
ni A for she entered it with good faith and
for the interest of partnership] - The designation of the share of partners in
the profits and losses can be intrust to a
Article 1797: third person but not to one of the partners
The losses and profits shall be - The validity of the designation though may
distributed in conformity with the agreement. be dispute if it’s said to be inequitable or
If only the share of each partner in the profits unjust. pero, in the absence of such
has been agreed upon, the share of each in complain 3 months after they had the
the losses shall be in the same proportion. knowledge about it being inequitable and
if any of the partner began to execute the
In the absence of stipulation, the share decision of the third person then, push
of each partner in the profits and losses shall through and designation.
be in proportion to what he may have
contributed, but the industrial partner shall Article 1799:
not be liable for the losses. As for the profits, A stipulation which excludes one or
the industrial partner shall receive such share more partners from any share in the profits or
as may be just and equitable under the losses is void.
circumstances. If besides his services he has
 because the moment they appointed the
managing partners they have already stripped
themselves of all the participation in the
administration.

Article 1800:
The partner who has been appointed
manager in the articles of partnership may Article 1802:
execute all acts of administration despite the In case it should have been stipulated
opposition of his partners, unless he should that none of the managing partners shall act
act in bad faith; and his power is irrevocable without the consent of the others, the
without just or lawful cause. The vote of the concurrence of all shall be necessary for the
partners representing the controlling interest validity of the acts, and the absence or
shall be necessary for such revocation of disability of any one of them cannot be
power. alleged, unless there is imminent danger of
grave or irreparable injury to the partnership.
A power granted after the partnership
has been constituted may be revoked at any - “Cannot be alleged” means that hindi
time. pwedeng walang proof
- Unanimous consent is necessary kahit pa
- Controlling interest means ‘yung may absent or incapacitated ang isa
more than 50% na contribution or voting - Does not apply to third persons in a way
rights na hindi obligation ng third person to
- Once na mag-appoint ng managing determine or confirm if the managing
partner, the Mutual Agency will cease to partner whom he contracts with obtained
exist kasi may mas malaki or mataas na first the consent of the other managing
na power ang managing partner partners as he/she has the right to
compared sa ibang agents of partnership. presume na may unanimous consent
- [GENERAL RULE] The power vested to muna ang mga managing partners before
the managing partner is irrevocable entering the contract.
without just or lawful cause
- [EXCEPTION] To remove him/her for Article 1803:
JUST cause, then the vote of partners When the manner of management has
having controlling interest is necessary. not been agreed upon, the following rules
- [EXCEPTION] To remove him/her shall be observed:
WITHOUT JUST cause, unanimous 1. All the partners shall be
decision will be applied. considered agents and whatever
any one of them may do alone
Article 1801: shall bind the partnership,
If two or more partners have been without prejudice to the
instrusted with the management of the provisions of Article 1801;
partnership without specification of their 2. None of the partners may,
respective duties, or without a stipulation that without the consent of the
one of them shall not act without the consent others, make any important
of all the others, each one may separately alteration in the immovable
execute all acts of administration, but if any of property of the partnership,
them should oppose the acts of the others, even if it may be useful to the
the decision of the majority shall prevail. In partnership. But if the refusal of
case of a tie, the matter shall be decided by consent by the other partners is
the partners owning the controlling interest. manifestly prejudicial to the
interest of the partnership, the
Note: the right to oppose the acts of court's intervention may be
administration is not given to non-managers sought.
 - Since provided by law nga na if there’s no 1. Any partner;
appointed managing partner/s then, all of 2. Legal representative of any deceased
the agents are considered as managing partner; and,
partners hence, all of them can do all acts 3. Legal representative of any partner under
of administration BUT if one of them legal disability.
opposes the other, majority wins and if tie
then, the vote of the partners with Article 1807:
controlling interest shall prevail Every partner must account to the
- For the PAR.2 naman, ang essence kasi partnership for any benefit, and hold as
nito is the immovable property, kapag trustee for it any profits derived by him
ibabalik na sa partner na nagcontribute ay without the consent of the other partners from
dapat in the same condition siya, PERO if any transaction connected with the formation,
the other partners knew about it and conduct, or liquidation of the partnership or
declared no opposition then, consent has from any use by him of its property.
been given.
- Kumbaga, everything must be accounted
Article 1804: for lang.
Every partner may associate another
person with him in his share, but the Article 1808:
associate shall not be admitted into the The capitalist partners cannot engage
partnership without the consent of all the for their own account in any operation which
other partners, even if the partner having an is of the kind of business in which the
associate should be a manager. partnership is engaged, unless there is a
stipulation to the contrary.

- This is the Contract of Sub-partnership Any capitalist partner violating this

- Basically, parang transfer of rights or prohibition shall bring to the common funds
interest in a way. any profits accruing to him from his
transactions, and shall personally bear all the
Article 1805: losses.
The partnership books shall be kept,
subject to any agreement between the - Capitalist partner can engage in other
partners, at the principal place of business of business aside from the partnership long
the partnership, and every partner shall at any as it is of a different kind
reasonable hour have access to and may - In the violation of the above article the
inspect and copy any of them. following shall take effect:
a. All of the profits he/she accrued
- Reasonable hour refers to 9AM to 7PM of from the business he/she engaged
any day of the week with shall be brought to the
common fund of the partnership
Article 1806: b. he/she shall personally bear all the
Partners shall render on demand true losses
and full information of all things affecting the
partnership to any partner or the legal Article 1809:
representative of any deceased partner or of Any partner shall have the right to a
any partner under legal disability. formal account as to partnership affairs:
1. If he is wrongfully excluded
- Violation of the above article is called from the partnership business
Concealment or possession of its property by
his co-partners;
WHO CAN DEMAND TRUE & FULL 2. If the right exists under the
INFORMATION: terms of any agreement;
 3. As provided by Article 1807;
and,
4. Whenever other circumstances
render it just and reasonable.

- [GENERAL RULE] No formal accounting

is demandable until after the dissolution of
the partnership; the exceptions are the SEC 2: Property Rights of a Partner
above article.
- Formal accounting is like asking for a Article 1810:
computation of your contributions, The property rights of a partner are:
profits/losses, and other benefits under 1. His rights in specific partnership
your share in the partnership. property;
2. His interest in the partnership;
and,
3. His rights to participate in the
management.

- [1] co-ownership exists

- [2] pro-rata of the total contributions of
each partner
- [3] as provided by law nga and the mutual
agency doctrine, all of them, in the
absence of appointment, are managing
partners

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 medical attendance, and education even
partnership property is attached after the age of majority; bali sinasabi rito
for a Partnership debt the na for example ‘yung father mo or spouse
partners, or any of them, or the mo is partner sa isang partnership, you
representatives of a deceased are not obliged to support their rights on
partner, cannot claim any right the specific property.
under the homestead or
exemption laws;
4. A partner's right in specific
partnership property is not Article 1812:
subject to legal support under A partner’s interest in the partnership
Article 291. is his share of the profits and surplus.

- [2] they cannot assign their rights on any - Profits [revenues - expenses]
of their contribution kasi once na - Surplus [receipts - disbursements; after
natransfer na ang ownership sa winding up]
partnership, pagmamay-ari na ito ng - Unlike in property, the partner’s interest
partnership and take note that partnership can be assigned, can be attached, and
has a separate juridical personality; if can be subject to legal support
individual rights lang bawal pero if all of
the partners will assign their rights pwede The extent of partner’s interest can be determined
through:
- [3] attachment or execution means a 1. Account muna sa debts and credits
property is held to satisfy an established bago malaman ang extent of share;
debt; hindi na ito pwede sa properties kumbaga, alamin muna kung ilan ang
transferred to the partnership kasi again utang para malaman ilan ang matitira for
owned by partnership na siya and division of profits/losses.
partnership has a separate juridical 2. Liquidation
personality; to further differentiate
attachment from execution, attachment is Article 1813:
when there is a judicial decree or process A conveyance by a partner of his whole
wherein the court attaches the property of interest in the partnership does not of itself
a partnership bilang pambayad or to dissolve the partnership, or, as against the
satisfy the claim of the outside creditor in other partners in the absence of agreement,
general, on the other hand naman the entitle the assignee during the continuance of
execution is a court order of liquidating a the partnership, to interfere in the
property para may pambayad sa outside management or administration of the
creditors; claim on the partner’s rights partnership business or affairs or to require
alone is hindi pwede kasi the specific any information or account of partnership
property contributed is now owned by the transactions, or to inspect the partnership
partnership and all of the agents ay may books; but it merely entitles the assignee to
rights doon sa property na ‘yon (co- receive in accordance with his contract the
owners nga sila) kaya hindi pwede dahil profits to which the assigning partner would
automatic nang madadamay ang rights ng otherwise be entitled. However, in case of
ibang partners doon sa property na iyon, fraud in the management of the partnership,
PERO claim on the partnership itself the assignee may avail himself of the usual
pwede. remedies.

- [4] the family code; art.291 or 195 na In case of a dissolution of the

ngayon provides that the persons partnership, the assignee is entitled to receive
enumerated in this provision have the his assignor’s interest and may require an
obligation to support each other for all the account from the date only of the last account
necessary sustenance, dwelling, clothing, agreed to by all the partners.
 Nothing in this Title shall be held to
- Sinasabi rito na the conveyance of the deprive a partner of his right, if any, under the
partner to an assignee of his whole exemption laws, as regard his interest in the
interest in the partnership does not give partnership.
the assignee or does not make the
assignee a part of the partnership. CHARGING ORDER:
- The assignee will only be entitled to the - Meaning is if a debtor-partner of a private
amount of profit that the assigning partner outside creditor failed to satisfy his/her
will receive. debts/obligation, the latter may go straight
to the court for a charging order wherein
RIGHTS OF THE ASSIGNEE: the court will now charge the interest of
1. To receive profits of the assigning partner; the former in the partnership
2. In case of fraud in the management of the (profits/surplus) for the satisfaction of the
partnership, he may avail himself of the said debt.
usual remedies provided by law; - The court will only issue a charging order
3. In case of dissolution, he can receive the after the creditor obtained a favorable
assignor’s interests in the partnership; judgment which became final.
and,
4. To require an account of partnership affair REDEMPTION OF INTEREST CHARGED:
(but only in cases the partnership is 1. Before foreclosure
dissolved) 2. After foreclosure
a. With the other partners’ separate
Article 1814: properties; or,
Without prejudice to the preferred b. With the partnership property
rights of partnership creditors under Article provided that all of the partners
1827, on due application to a competent court whose interests are not so charged
by any judgment creditor of a partner, the or sold gave their consent
court which entered the judgment, or any
other court, may charge the interest of the Firstly, redemption means the extinguishment of
debtor partner with payment of the the charge or attachment on the partner’s interest
unsatisfied amount of such judgment debt in profits.
with interest thereon; and may then or later Secondly, foreclosure means the legal process
appoint a receiver of his share of the profits, that allows the creditors to take ownership and
and of any other money due or to fall due to sell the mortgaged property of the default debtor.
him in respect of the partnership, and make
all other orders, directions, accounts, and Basically, sinasabi rito na parang tutubusin ‘yung
inquiries which the debtor partner might have charged interest ng debtor-partner through
made, or which the circumstances of the case whichever may apply: (1) gamit ang separate
may require. properties ng other partners; or, (2) gamit mismo
ang property ng partnership, as long as may
The interest charged may be redeemed consent ng lahat ng partners maliban doon sa
at any time before foreclosure, or in case of a debtor-partner whose interests were charged.
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.
 - Will be subject to the liability of a partner
in a way na he/she will be responsible for
the damages he/she had caused the third
persons who were misled up to the extent
of his separate properties na parang part
talaga siya ng partnership.

[pero if una pa lang naman ay aware naman na

ang third person na hindi siya part ng partnership
talaga then, there is no liability]

SEC 3: Obligations of the Partners With Article 1816:

Regard to Third Persons All partners, including industrial ones,
shall be liable pro rata with all their property
Article 1815: and after all the partnership assets have been
Every partnership shall operate under exhausted, for the contracts which may be
a firm name, which may or may not include entered into in the name and for the account
the name of one or more of the partners. of the partnership, under its signature and by
a person authorized to act for the partnership.
Those who, not being members of the However, any partner may enter into a
partnership, include their names in the firm separate obligation to perform a partnership
name, shall be subject to the liability of a contract.
partner.
- Sinasabi kasi rito na subsidiary liable ang
- The PAR.1 is the general rule. partners sa mga utang ni partnership once
- Name of the partnership is needed to maubos ang pondo or assets nito.
distinguish the partnership as it has a [subsidiary liable means secondary liable
distinct and separate juridical personality ka and arises only if the primary liable,
or basically para magkaroon siya ng which in this case is the partnership, fails
sariling identity. to sufficiently satisfy its obligations]
- Also, the partners are always jointly liable
EXCEPTIONS OF PAR.1: except in circumstances provided under
USE OF MISLEADING NAME: Articles 1822, 1823, and 1824 wherein the
- The name must not be identical with or partners are solidarily liable.
deceptively similar to a name which was
previously adopted by any other entity, or Article 1817:
interfere with the rights of others, or is Any stipulation against the liability laid
contrary to law down in the preceding article shall be void,
except as among the partners.
USE OF NAMES OF DECEASED PERSONS:
- As per the court, you cannot use or - Basically, this article provides that the
incorporate the name of the deceased stipulation of the partners regarding their
partners/persons in the name of your partition pagdating sa liability entered into
partnership when you create a new one or in the name of the partnership once all of
if you continue the previous partnership the assets have been exhausted ay hindi
even without the deceased person. binding or void sa third parties.

LIABILITY FOR INCLUSION OF NAME IN A Article 1818:

FIRM NAME: Every partner is an agent of the
[this actually pertains to partnership by estoppel] partnership for the purpose of its business,
- Since hindi naman nga partner ang and the act of every partner, including the
person na ‘yon then, he/she will obviously execution in the partnership name of any
not acquire any rights of a partner instrument, for apparently carrying on in the
usual way the business of the partnership of the former has no such
which he is a member binds the partnership, authority.
unless the partner so acting has in fact no - Take note na dapat present ‘yung
authority to act for the partnership in the dalawang exceptions para hindi
particular matter, and the person with whom maging binding ‘yung act.
he is dealing has knowledge of the fact that
he has no such authority. 2. Acts not apparently for the carrying on in
the usual way of business of the
An act of a partner which is not partnership
apparently for the carrying on of business of - General rule is that it’s not binding
the partnership in the usual way does not - Exception is unless the other
bind the partnership unless authorized by the partners authorized such act
other partners.
3. Acts of ownership
Except when authorized by the other - Acts of ownership or dominion
partners or unless they have abandoned the - Sa isang partnership acts of
business, one or more but less than all the administration lang ang pwede
partners have no authority to: kumbaga katiwala lang sila ng
partnership kaya ng agents; hence,
1. Assign the partnership property acts of dominion or ownership is not
in trust for creditors or on the allowed
assignee's promise to pay the - The following cases of events ay
debts of the partnership; hindi authorized ang partners to do
2. Dispose of the good-will of the so for it’s an act of dominion unless
business; may consent ng other partners or the
3. Do any other act which would business has been abandoned:
make it impossible to carry on a. Assign the partnership property
the ordinary business of a in trust for creditors or on the
partnership; assignee’s promise to pay the
4. Confess a judgment; debts of the partnership;
5. Enter into a compromise
concerning a partnership claim b. Dispose of the good-will of the
or liability; business;
6. Submit a partnership claim or
liability to arbitration; and c. Do any other act which would
7. Renounce a claim of the make it impossible to carry on
partnership. the ordinary business of the
partnership;
No act of a partner in contravention of
a restriction on authority shall bind the d. Confess a judgment;
partnership to persons having knowledge of [doing it against the interest
the restriction. of the partnership;
prejudicial ang confession
1. Acts apparently for carrying on in the in a way]
usual way the business of the partnership
- This is binding to the partnership e. Enter into a compromise
except if: concerning a partnership claim
a. The person acting actually or liability;
has no authority to act for [compromise means
the partnership; parang donation in a way,
b. The person with whom the for example may claim na
former is dealing with has 1M ang partnership tapos a
knowledge of the fact that partner entered into a
 compromise by saying na without knowledge that the partner, in making
850k na lang ang kukunin the conveyance, has exceeded his authority.
ng partnership; this is
deprivation of property of Where title to real property is in the
the partnership and name of the partnership, a conveyance
therefore not binding] executed by a partner, in his own name,
passes the equitable interest of the
f. Submit a partnership claim or partnership, provided the act is one within the
liability to arbitration; and, authority of the partner under the provisions
[the purpose of arbitration of the first paragraph of Article 1818.
is for the parties to meet
with a mediator, and to Where title to real property is in the
reconcile their differences; name of one or more but not all the partners,
basically para din siyang and the record does not disclose the right of
compromise pero ang the partnership, the partners in whose name
pinagkaiba is may the title stands may convey title to such
pumapagitnang arbitrator property, but the partnership may recover
na siyang nag-rerelay ng such property if the partners’ act does not
concerns or requests ng bind the partnership under the provisions of
isa’t isa hanggang sa the first paragraph of Article 1818, unless the
maka-arrive both sides sa purchaser or his assignee, is a holder for
isang desisyon that will value, without knowledge.
most probably be
prejudicial to the Where the title to real property is in the
partnership] 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
g. Renounce a claim of the partnership name, or in his own name, passes
partnership the equitable interest of the partnership,
[renounce means declaring provided the act is one within the authority of
of the abandonment of the the partner under the provisions of the first
claim of the partnership; paragraph of Article 1818.
parang donation ulit kasi
hindi ka na maniningil] Where the title to real property is in the
name of all the partners a conveyance
4. Acts in contravention of a restriction on executed by all the partners passes all their
authority rights in such property.
- Basically, a partner cannot act
beyond the restriction on his [PAR1] Conveyance is in the name of the
authority. partnership:
- If a partner conveyed a property of the
Article 1819: partnership under the name of the
Where title to real property is in the partnership and it’s binding as per the first
partnership name, any partner may convey paragraph of the Art. 1818 which states
title to such property by a conveyance that if the conveyance is for the carrying
executed in the partnership name; but the on in the usual business of the partnership
partnership may recover such property — and the partner who did such act has the
unless the partner's act binds the partnership authority to do so then, the conveyed
under the provisions of the first paragraph of property cannot be recovered.
article 1818, or unless such property has been - But, the exceptions or kung kailan hindi
conveyed by the grantee or a person claiming pwedeng mabawi ang property are (1)
through such grantee to a holder for value when the partner who conveyed the
property to the third person has no
 authority to do so unless it’s in the line of [PAR5] Conveyance is under the name of all
the business operations of the partners:
partnership; (2) if ‘yung third person na - Valid and binding even though not under
involved or pinagpasahan/pinagbentahan the name of the partnership ang pag-
ng said property was not aware that the convey ng property pero kasi may consent
partner who did the conveyance doesn’t ng lahat ng partners which means na they
have the authority to do so and the third are passing all of their rights in such
person acted in good faith; (3) even property and walang partner na maiiwan
though aware si third person na walang or mapprejudice.
authority ang partner and still pushed
through with the transaction tapos the
third person conveyed the property again
to another person and that person has no Article 1820:
knowledge that the partner did not have An admission or representation made
the authority na iconvey kay third person by any partner concerning partnership affairs
ang property then, hindi na pwedeng within the scope of his authority in
iretrieve ng partnership ‘yung property accordance with this Title is evidence against
from the another person for he/she acted the partnership.
in good faith.
ADMISSION
[PAR2] Conveyance is in the name of the partner: - Statement of someone admitting that
- Equitable interest pertains to the something is true or that he/she has done
conveyance of the usufruct of the property something wrong
only. - Usually ay prejudicial ito sa interests ng
- Bali sinasabi sa paragraph na ‘to na hindi partnership
transfer of ownership ang maibibigay sa - Can be used against the partnership if:
third person once na the partner conveyed 1. The admission must concern
the partnership property under his/her partnership affairs; and,
name kasi nga property ‘yon ng 2. The admission must be within the
partnership at hindi ng partners. scope of his/her authority.
- Binding and valid pa rin naman ito sa - An admission made by a former partner
partnership; ang pwede lang maging made after he retired from the partnership
remedy ng third person for this is cannot be used as evidence against the
reformation of their contract kung saan partnership.
papalitan ng partner ang name niya into
the name of the partnership as the one Article 1821:
who did the conveyance. Notice to any partner of any matter
- The same exceptions of paragraph 1 relating to partnership affairs, and the
apply. knowledge of the partner acting in the
particular matter, acquired while a partner or
[PAR3] Conveyance is under the name of one or then present to his mind, and the knowledge
more but not all of the partners: of any other partner who reasonably could
- Kung kanino lang nakapangalan ang and should have communicated it to the
property or kung sino lang ang may rights acting partner, operate as notice to or
doon sa property ay sila lang din ang knowledge of the partnership, except in the
pwedeng mag-convey case of fraud on the partnership, committed
by or with the consent of that partner.
[PAR4] Conveyance is under the name of one, or
more, or all, or in third person in trust for the - this article provides that a notice to a
partnership: partner is a notice to the partnership
- Equitable interest lang ulit ang
macoconvey. Article 1822:
 Where, by any wrongful act or When a person, by words spoken or
omission of any partner acting in the ordinary written or by conduct, represents himself, or
course of the business of the partnership or consents to another representing him to
with the authority of co-partners, loss or anyone, as a partner in an existing
injury is caused to any person, not being a partnership or with one or more persons not
partner in the partnership, or any penalty is actual partners, he is liable to any such
incurred, the partnership is liable therefor to persons to whom such representation has
the same extent as the partner so acting or been made, who has, on the faith of such
omitting to act. representation, given credit to the actual or
apparent partnership, and if he has made
- basically, if the partner acting in such representation or consented to its being
accordance to the ordinary course of made in a public manner he is liable to such
business of the partnership and he/she person, whether the representation has or has
caused injury to third persons or acquired not been made or communicated to such
a penalty due to his wronful acts or person so giving credit by or with the
omissions then, pati 'yung other partners knowledge of the apparent partner making the
and the partnership itself ay solidarily representation or consenting to its being
liable rin. made:
- on the other hand naman, the partnership
or the partners can ask for reimbursement 1. When a partnership liability results, he
from the guilty partner. is liable as though he were an actual
member of the partnership;
Article 1823: 2. When no partnership liability results,
The partnership is bound to make good he is liable pro rata with the other
the loss: persons, if any, so consenting to the
1. Where one partner acting within the contract or representation as to incur
scope of his apparent authority liability, otherwise separately,
receives money or property of a third
person and misapplies it; and When a person has been thus
2. Where the partnership in the course of represented to be a partner in an existing
its business receives money or partnership, or with one or more persons not
property of a third person and the actual partners, he is an agent of the persons
money or property so received is consenting to such representation to bind
misapplied by any partner while it is in them to the same extent and in the same
the custody of the partnership. manner as though he were g partner in fact,
with respect to persons who rely upon the
- in this cases, the partner will be liable for representation. When all the members of the
estafa. existing partnership consent to the
representation, a partnership act or obligation
Article 1824: results, but in all other cases it is the joint act
All partners are liable solidarily with or obligation of the person acting and the
the partnership for everything chargeable to persons consenting to the representation.
the partnership under Articles 1822 and 1823.
- this provision pertains to Partnership by
- the essence of this provision is to protect Estoppel
the third persons who acted in good faith
and solely relied on the presumption that PARTNERSHIP BY ESTOPPEL:
the partner with whom they are - All of the partners of an existing
transacting with obtained the consent of partnership gave their consent to an
other partners or has the authority to do outsider who claims himself as part of the
such act. said partnership.

Article 1825: PARTNERS BY ESTOPPEL:

 - Not all of the partners of an existing ang partners ng separate obligations nila
partnership gave consent to an outsider with private creditors with their respective
who claims himself as part of the said shares in the partnership, uunahin
partnership; THEREFORE, partners by munang bayaran ang creditors ng firm.
estoppel ang tawag doon sa mga - now, once settled, the private creditors of
nagconsent at sa outsider. each partner may attached the shares of
the partners in the partnership.
[those who are guilty of such misrepresentations
are all liable to the third persons who gave credit
to the "partnership" because they were misled
and to the partnership liabilities that arose]

[however, partnership by estoppel does not apply

when the third person is not deceived hence, it's
the third person who bears the burden to prove
that there is a partnership or partners by estoppel]
Article 1826: CHAPTER 3: DISSOLUTION AND WINDING UP
A person admitted as a partner into an
existing partnership is liable for all the Article 1828:
obligations of the partnership arising before The dissolution of a partnership is the
his admission as though he had been a change in the relation of the partners caused
partner when such obligations were incurred, by any partner ceasing to be associated in the
except that this liability shall be satisfied only carrying on as distinguished from the winding
out of partnership property, unless there is a up of the business.
stipulation to the contrary.
Article 1829:
- this provision talks about dissolution since On dissolution, the partnership is not
a new partner has been added to the terminated but continues until the winding up
partnership of partnership affairs is completed.
- this provides that the newly added partner
is also liable to the obligations incurred - Dissolution does not equate termination of
even before his admission the partnership, the partnership will only
- pero once na exhausted na lahat ng push forward to its second final stage
assets or pondo ng partnership and the which is winding up; however, if the
obligation can now only be satisfied partners will prefer, this can also lead to
through the separate properties, only the the third final stage which is the
partners who were admissioned before termination.
the obligation was incurred ang liable. - after dissolution, all transactions of the
- pero kapag the obligation was incurred partnership shall only pertain to liquidation
after the admission of the new member or winding up wherein the remaining
then, he is also liable up to the extent of affairs shall be settled.
his separate properties.
Article 1830:
Article 1827: Dissolution is caused:
The creditors of the partnership shall be [1] Without violation of the agreement
preferred to those of each partner as regards between the partners:
the partnership property. Without prejudice to a. By the termination of the definite term
this right, the private creditors of each partner or particular undertaking specified in
may ask the attachment and public sale of the the agreement;
share of the latter in the partnership assets. b. By the express will of any partner, who
must act in good faith, when no definite
- preffered means priority or unang term or particular undertaking is
isesettle; hence, before makapagsettle specified;
 c. By the express will of all the partners
who have not assigned their interests [1B] Pertains to Partnership at Will
or suffered them to be charged for their
separate debts, either before or after [1C] Dito naman, may specified term or particular
the termination of any specified term or undertaking; bali, ang logic lang dito is ‘yung
particular undertaking; Doctrine of Delectus Personae wherein we have
d. By the expulsion of any partner from the right to choose with whom we are going to
the business bona fide in accordance associate ourselves and kung kanino hindi.
with such a power conferred by the Therefore, kahit pa may specified term and
agreement between the partners; particular undertaking ang partnership hindi
pwedeng i-compel, even the court, ang isang
[2] In contravention of the agreement between partner to stay in the partnership kapag ayaw niya
the partners, where the circumstances do not na, kaya by the express will pa rin ito ng partners.
permit a dissolution under any other provision ANOTHER NOTE: Dito sa 1C, ALL PARTNERS
of this article, by the express will of any agreed to dissolve the partnership. By that “all”
partner at any time; pertains only to those partners who did not assign
their interests or suffer a charging order
[3] By any event which makes it unlawful for
the business of the partnership to be carried [1D] Kumbaga may mga rules sila and once
on or for the members to carry it on in lumabag, those partners will be subject for
partnership; expulsion.

[4] When a specific thing which a partner had [2] Unlike in 1C, dito ay any of the partners lang
promised to contribute to the partnership, hindi lahat. Contravention siya or against the
perishes before the delivery; in any case by agreement pero it will still not prevent the
the loss of the thing, when the partner who dissolution of the partnership.
contributed it having reserved the ownership
thereof, has only transferred to the [4] transfer of use or enjoyment only: both before
partnership the use or enjoyment of the same; and after the delivery, once lost, partnership is
but the partnership shall not be dissolved by dissolved; transfer of ownership: before the
the loss of the thing when it occurs after the delivery, once lost, partnership is dissolved; and,
partnership has acquired the ownership transfer of ownership: after the delivery, once lost,
thereof; partnership is not dissolved.

[5] By the death of any partner; Article 1831:

On application by or for a partner the
[6] By the insolvency of any partner or of the court shall decree a dissolution whenever:
partnership;
[1] A partner has been declared insane in any
[7] By the civil interdiction of any partner; judicial Proceeding o, is shown to be of
unsound mind;
[8] By decree of court under the following
article. [2] A partner becomes in any other way
incapable of performing his part of the
- this provision talks about the causes of partnership contract;
dissolution
[3] A partner has been guilty of such conduct
2 KINDS OF DISSOLUTION: as tends to affec prejudicially the carrying on
a. Extrajudicial of the business;
b. Judicial
[4] A partner willfully or persistently commits
[1A] Pertains to both Pi]jartnership with a Fixed a breach of the partnership agreement, or
Term and Partnership for a Particular Undertaking otherwise so conducts himself in matters
relating to the partnership business that it is acting for the partnership as if the partnership
not reasonably practicable to carry on the had not been dissolved unless:
business in partnership with him;
1. The dissolution being by act of any
[5] The business of the partnership can only partner, the partner acting for the
be carried on at a loss; partnership had knowledge of the
dissolution; or,
[6] Other circumstances render a dissolution 2. The dissolution being by the death or
equitable. insolvency of a partner, the partner acting
for the partnership had knowledge or
On application of the purchaser of a notice of the death or insolvency.
partner’s interest under Article 1813 or 1814:
- This article talks about the cases when the
[1] After the termination of the specified term act, death, and insolvency of a partner
or particular undertaking; which caused the dissolution of the
partnership is not known to other partners
and to third persons.
[2] At any time if the partnership was a - If the other partners had no knowledge of
partnership at will when the interest was the said act, death, or insolvency of the
assigned or when the charging order was other partner which caused the dissolution
issued. of the partnership tapos nag-enter pa sa
isang contract with a third person, and that
Article 1832: transaction resulted to a liability under the
Except so far as may be necessary to name of the partnership then, that contract
wind up partnership affairs or to complete is still binding and liable pa rin silang
transactions begun but not then finished, lahat.
dissolution terminates all authority of any - But, if it’s the other way around, kung
partner to act for the partnership: saan may knowledge si other partners
about the dissolution of the partnership
1. With respect to the partners: due to A.D.I and yet, they still contracted
a. When the dissolution is not by the with a third person na hindi rin naman
act, insolvency, or death of a alam na dissolved na pala ang
partner; or, partnership, binding pa rin ang partnership
b. When the dissolution is by such and liable pa rin ang partnership sa third
act, insolvency, or death of a person.
partner, in cases where Article - Lastly, if both the partners and the third
1833 so requires; person had the knowledge regarding the
2. With respect to persons not partners, as dissolution of the partnership and
declared in Article 1834. nagtransact pa rin sila, and that
transaction resulted to a liability under the
- Basically, sinasabi lang dito na once the partnership’s name then, hindi na ito
partnership is dissolved, any of the binding sa partnership, ang
partners must not enter into any contract magshoshoulder na lang niyan ay ang
as it will not be binding to the partnership mga partners na involved.
anymore, unless it’s for the purpose of
winding up. Article 1834:
After dissolution, a partner can bind
Article 1833: the partnership, except as provided in the
Where the dissolution is caused by the third paragraph of this article:
act, death, or insolvency of a partner, each
partner is liable to his co-partners for his 1. By any act appropriate for winding up
share of any liability created by any partner partnership affairs or completing
transactions unfinished at dissolution;
2. By any transaction which would bind the [the partner na tinutukoy rito is the dormant
partnership if dissolution had not taken partner since he’s not actively participating
place, provided the other party to the and not publicly known as well]
transaction:
a. Had extended credit to the partnership The partnership is in no case bound by
prior to dissolution and had no any act of a partner after dissolution:
knowledge or notice of the
dissolution; or 1. Where the partnership is dissolved
[prior the dissolution, may transaction because it is unlawful to carry on the
wherein a third person extended a credit business, unless the act is appropriate for
to the partnership without having the winding up partnership affairs; or
knowledge regarding the dissolution] 2. Where the partner has become insolvent;
or
b. Though he had not so extended credit, 3. Where the partner has no authority to wind
had nevertheless known of the up partnership affairs; except by a
partnership prior to dissolution, and, transaction with one who: [this pertains to
having no knowledge or notice of the authority of liquidating partner]
dissolution, the fact of dissolution had a. Had extended credit to the partnership
not been advertised in a newspaper of prior to dissolution and had no
general circulation in the place (or in knowledge or notice of his want of
each place if more than one) at which authority; or
the partnership business was regularly b. Had not extended credit to the
carried on. partnership prior to dissolution, and,
[in this case naman, the third persons having no knowledge or notice of his
involved ay those na may previous want of authority, the fact of his want
transaction na with the partnership or of authority has not been advertised in
those na familiar na sa partnership, the manner provided for advertising
walang extension of credit, pero still may the fact of dissolution in the first
transaction prior the dissolution, paragraph, No. 2 (b).
unfinished business kumbaga; also, wala
ulit knowledge about the dissolution ang Nothing in this article shall affect the
third person and walang constructive liability under Article 1825 of any person who,
notice na nailabas announcing such after dissolution, represents himself or
dissolution to the public] consents to another representing him as a
partner in a partnership engaged in carrying
The liability of a partner under the first business.
paragraph, No. 2, shall be satisfied out of
partnership assets alone when such partner Article 1835:
had been prior to dissolution: The dissolution of the partnership does
not of itself discharge the existing liability of
Actively Participating Publicly Known
Ostensible   any partner.
Secret 
Silent 
Dormant A partner is discharged from any
existing liability upon dissolution of the
1. Unknown as a partner to the person with partnership by an agreement to that effect
whom the contract is made; and between himself, the partnership creditor and
[since this is not publicly known, this pertains the person or partnership continuing the
to the secret partner] business; and such agreement may be
inferred from the course of dealing between
2. So far unknown and inactive in partnership the creditor having knowledge of the
affairs that the business reputation of the dissolution and the person or partnership
partnership could not be said to have been continuing the business.
in any degree due to his connection with it.
[on the first statement, expressly ang pagpayag liquidation is also appointed by the
kasi talagang nag-usap-usap sila while on the court.
second implied na lang kumbaga can be inferred
na lang from their meeting na pumayag sila Article 1837:
kapag walang naniningil] When dissolution is caused in any way,
except in contravention of the partnership
The individual property of a deceased agreement, each partner, as against his co-
partner shall be liable for all obligations of the partners and all persons claiming through
partnership incurred while he was a partner, them in respect of their interests in the
but subject to the prior payment of his partnership, unless otherwise agreed, may
separate debts. have the partnership property applied to
[sinasabi lang dito na the deceased partner is still discharge its liabilities, and the surplus
liable sa mga liabilities na naincur under the applied to pay in cash the net amount owing
partnership before his death; therefore, if to the respective partners. But if dissolution
exhausted na lahat ng pondo ng partnership, is caused by expulsion of a partner, bona fide
syempre didiretso na sa separate or personal under the partnership agreement and if the
properties ng partners ang outside creditors, kaya expelled partner is discharged from all
the estates of the deceased partner will also be partnership liabilities, either by payment or
liable] agreement under the second paragraph of
Article 1835, he shall receive in cash only the
- [GENERAL RULE] Dissolution of the net amount due him from the partnership.
partnership does not of itself discharge the
existing liability of any partner.
- Exception sa general rule ay kailangan
mag-agree ang: When dissolution is caused in
a. Concerned partner contravention of the partnership agreement
b. Partnership creditor the rights of the partners shall be as follows:
c. Continuing partnership
[1 & 2 deal with the innocent partners]
Article 1836: 1. Each partner who has not caused
Unless otherwise agreed, the partners dissolution wrongfully shall have:
who have not wrongfully dissolved the a. All the rights specified in the first
partnership or the legal representative of the paragraph of this article, and
last surviving partner, not insolvent, has the b. The right, as against each partner who
right to wind up the partnership affairs, has caused the dissolution wrongfully,
provided, however, that any partner, his legal to damages for breach of the
representative or his assignee, upon cause agreement.
shown, may obtain winding up by the court. 2. The partners who have not caused the
dissolution wrongfully, if they all desire to
KINDS OF WINDING UP OR LIQUIDATION: continue the business in the same name
1. Extrajudicial either by themselves or jointly with others,
a. The liquidating partner may do so, during the agreed term for the
b. The partners who have not partnership and for that purpose may
wrongfully dissolved the possess the partnership property,
partnership provided they secure the payment by bond
c. Legal representative of the approved by the court, or pay any partner
surviving partner who is not who has caused the dissolution
insolvent wrongfully, the value of his interest in the
2. Judicial partnership at the dissolution, less any
- since the liquidation here is done damages recoverable under the second
under the control of the court then, paragraph, No. 1 (b) of this article, and in
the person who will do the like manner indemnify him against all
present or future partnership liabilities.
 any capital or advances contributed by
[‘yung bond na tinutukoy rito ay ‘yung form him;
insurance which the continuing partners have
to apply to the court, bali this bond will be 2. To stand, after all liabilities to third
liable for every damage that will be suffered] persons have been satisfied, in the
place of the creditors of the
[‘yung present and future liabilities na partnership for any payments made by
tinutukoy sa last part ay those liabilities that him in respect of the partnership
arose out of the wrongful dissolution of the liabilities; and,
partnership, no literally utang ng continuing
partnership out of carrying in on its normal 3. To be indemnified by the person guilty
business operation] of the fraud or making the
representation against all debts and
[3 naman deals with the guilty partners] liabilities of the partnership.
3. A partner who has caused the dissolution
wrongfully shall have: [PAR.1] “lien” means preferential right
a. If the business is not continued under
the provisions of the second [PAR.2] right of subrogation; siya naman ngayon
paragraph, No. 2, all the rights of a ang magiging creditor in a way na manghihingi
partner under the first paragraph, siya kumbaga ng reimbursements for any
subject to liability for damages in the payments made by him in respect of the
second paragraph, No. 1 (b), of this partnership liabilities.
article.
b. If the business is continued under the [PAR.3] right of indemnification.
second paragraph, No. 2, of this article,
the right as against his co-partners and
all claiming through them in respect of
their interests in the partnership, to Article 1839:
have the value of his interest in the In settling accounts between the
partnership, less any damage caused partners after dissolution, the following rules
to his co-partners by the dissolution, shall be observed, subject to any agreement
ascertained and paid to him in cash, or to the contrary:
the payment secured by a bond
approved by the court, and to be 1. The assets of the partnership are:
released from all existing liabilities of a. The partnership property
the partnership; but in ascertaining the b. The contributions of the
value of the partner's interest the value partners necessary for the
of the goodwill of the business shall payment of all the liabilities
not be considered. specified in No. 2.

Article 1838: 2. The liabilities of the partnership shall

Where a partnership contract is rank in order of payment, as follows:
rescinded on the ground of the fraud or a. Those owing to creditors other
misrepresentation of one of the parties than partners
thereto, the party entitled to rescind is, b. Those owing to partners other
without prejudice to any other right, entitled: than for capital and profits
c. Those owing to partners in
1. To a lien on, or right of retention of, the respect of capital
surplus of the partnership property d. Those owing to partners in
after satisfying the partnership respect of profits.
liabilities to third persons for any sum
of money paid by him for the purchase 3. The assets shall be applied in the order
of an interest in the partnership and for of their declaration in No. 1 of this
 article to the satisfaction of the 1. When any new partner is admitted into
liabilities. an existing partnership, or when any
partner retires and assigns (or the
4. The partners shall contribute, as representative of the deceased partner
provided by article 1797, the amount assigns) his rights in partnership
necessary to satisfy the liabilities. property to two or more of the partners,
or to one or more of the partners and
5. An assignee for the benefit of creditors one or more third persons, if the
or any person appointed by the court business is continued without
shall have the right to enforce the liquidation of the partnership affairs;
contributions specified in the
preceding number. [unang scenario is may na-admit na
bagong partner, secondly ay may
6. Any partner or his legal representative retirement and assignment na naganap
shall have the right to enforce the regarding sa rights niya sa partnership
contributions specified in No. 4, to the property, also dito sa pangalawa, hindi
extent of the amount which he has paid pwedeng lahat ay sa third person ibibigay,
in excess of his share of the liability. dapat either sa 2 or more partners or one
or more partners AND one or more third
7. The individual property of a deceased persons]
partner shall be liable for the
contributions specified in No. 4. [nagdissolve pero hindi tumuloy sa
liquidation; therefore, gawa nga ng hindi
8. When partnership property and the nagliquidation ibig sabihin hindi
individual properties of the partners nabayaran ang creditors kaya creditors pa
are in possession of a court for rin sila ng panibagong partnership]
distribution, partnership creditors shall
have priority on partnership property
and separate creditors on individual 2. When all but one partner retire and
property, saving the rights of lien or assign (or the representative of a
secured creditors. deceased partner assigns) their rights
in partnership property to the
9. Where a partner has become insolvent remaining partner, who continues the
or his estate is insolvent, the claims business without liquidation of
against his separate property shall partnership affairs, either alone or with
rank in the following order: others;
a. Those owing to separate
creditors; [again, dito ay hindi ulit tumuloy sa
b. Those owing to partnership liquidation, kaya ang creditors before ay
creditors; creditors pa rin]
c. Those owing to partners by way
of contribution. 3. When any partner retires or dies and
the business of the dissolved
Article 1840: partnership is continued as set forth in
In the following cases, creditors of the Nos. 1 and 2 of this article, with the
dissolved partnership are also creditors of the consent of the retired partners or the
person or partnership continuing the representative of the deceased partner,
business: [deals with the continuing partner and but without any assignment of his right
continuing partnership; kailan daw mangyayari na in partnership property;
‘yung creditors ng nadissolve na partnership ay
magiging creditor pa rin nitong pinagpatuloy na 4. When all the partners or their
partnership] representatives assign their rights in
partnership property to one or more
 third persons who promise to pay the partner's interest in the dissolved
debts and who continue the business partnership or on account of any
of the dissolved partnership; consideration promised for such
interest or for his right in partnership
5. When any partner wrongfully causes a property.
dissolution and the remaining partners
continue the business under the [this paragraph just provides that laging priority or
provision: of article 1837, second unang babayaran ang outside creditors ng
paragraph, No. 2, either alone or with partnership bago ang claims ng partners sa
others, and without liquidation of the partnership; residual value na lang ang
Partnership affairs; paghahatian ng ibang partners na may claims din
sa partnership]
6. When a partner is expelled and the
remaining partners continue the Nothing in this article shall be
business either alone or with others held to modify any right of creditors to
without liquidation of the partnership set aside any assignment on the
affairs. ground of fraud. The use by the person
or partnership continuing the business
[bali ang pinaka common denominator ng of the partnership name, or the name
6 na ito ay lahat sila ay hindi tumuloy sa of a deceased partner as part thereof,
liquidation at pinagpatuloy ang shall not of itself make the individual
partnership instead] property of the deceased partner liable
for any debts contracted by such
The liability of a third person person or partnership.
becoming a partner in the partnership
continuing the business, under this
article, to the creditors of the dissolved
partnership shall be satisfied out of the
partnership property only, unless there Article 1841:
is a stipulation to the contrary. When any partner retires or dies, and
the business is continued under any of the
[ang difference nito sa 1826 is that sa conditions set forth in the preceding article,
1826 kasi may existing pang partnership, or in Article 1837, second paragraph, No.2,
walang umalis, nagretire, or nag-assign without any settlement of accounts as
unlike sa mga nabanggit na 6 dito sa between him or his estate and the person or
1840, tapos may dumagdag lang; tapos partnership continuing the business, unless
dito nga sa 1840 nadissolve ang otherwise agreed, he or his legal
partnership like nabuwag talaga kaya representative as against such person or
nagkaroon ng panibago] partnership may have the value of his interest
at the date of dissolution ascertained, and
When the business of a shall receive as an ordinary creditor an
partnership after dissolution is amount equal to the value of his interest in
continued under any conditions set the dissolved partnership with interest, or at
forth in this article the creditors of the his option, or at the option of his legal
dissolved partnership, as against the representative, in lieu of interest, the profits
separate creditors of the retiring or attributable to the use of his right in the
deceased partner or the representative property of the dissolved partnership;
of the deceased partner, have a prior provided that the creditors of the dissolved
right to any claim of the retired partner partnership as against the separate creditors,
or the representative of the deceased or the representative of the retired or
partner against the person or deceased partner, shall have priority on any
partnership continuing the business, claim arising under this article, as provided
on account of the retired or deceased by Article 1840, third paragraph.
 d. The name and place of
Article 1842: residence of each member,
The right to an account of his interest general and limited partners
shall accrue to any partner, or his legal being respectively designated;
representative as against the winding up e. The term for which the
partners or the surviving partners or the partnership is to exist;
person or partnership continuing the f. The amount of cash and a
business, at the date of dissolution, in the description of and the agreed
absence of any agreement to the contrary. value of the other property
contributed by each limited
[this article just provides kung kanino lalapit si partner;
retired partner or the legal representative of the g. The additional contributions, if
deceased partner to ascertain or imeasure ‘yung any, to be made by each limited
interests nila sa partnership] partner and the times at which
or events on the happening of
which they shall be made;
h. The time, if agreed upon, when
the contribution of each limited
partner is to be returned;
i. The share of the profits or the
other compensation by way of
income which each limited
partner shall receive by reason
of his contribution;
j. The right, if given, of a limited
partner to substitute an
assignee as contributor in his
place, and the terms and
conditions of the substitution;
CHAPTER 4: LIMITED PARTNERSHIP k. The right, if given, of the
partners to admit additional
Article 1843: limited partners;
A limited partnership is one formed by l. The right, if given, of one or
two or more persons under the provisions of more of the limited partners to
the following article, having as members one priority over other limited
or more general partners and one or more partners, as to contributions or
limited partners. The limited partners as such as to compensation by way of
shall not be bound by the obligations of the income, and the nature of such
partnership. priority;
m. The right, if given, of the
Article 1844: remaining general partner or
Two or more persons desiring to form partners to continue the
a limited partnership shall: business on the death,
retirement, civil interdiction,
1. Sign and swear to a certificate, which insanity or insolvency of a
shall state – general partner; and
a. The name of the partnership, n. The right, if given, of a limited
adding thereto the word partner to demand and receive
“Limited”; property other than cash in
b. The character of the business return for his contribution.
c. The location of the principal
place of business;
 2. File for record the certificate in the
Office of the Securities and Exchange Article 1848:
Commission. A limited partner shall not become
liable as a general partner unless, in addition
A limited partnership is formed if there to the exercise of his rights and powers as a
has been substantial compliance in good faith limited partner, he takes part in the control of
with the foregoing requirements. the business.

- A limited partnership must always be in Article 1849:

writing and filed for record in the office of After the formation of a limited
SEC. partnership, additional limited partners may
be admitted upon filing an amendment to the
Article 1845: original certificate in accordance with the
The contributions of a limited partner requirements of Article 1865.
may be cash or property, but not services.
Article 1851:
Article 1846: A limited partner shall have the same
The surname of a limited partner shall rights as a general partner to:
not appear in the partnership name unless:
1. Have the partnership books kept at the
1. It is also the surname of a general principal place of business of the
partner, or partnership, and at a reasonable hour
2. Prior to the time when the limited to inspect and copy any of them;
partner became such, the business has 2. Have on demand true and full
been carried on under a name in which information of all things affecting the
his surname appeared. partnership, and a formal account of
partnership affairs whenever
A limited partner whose surname circumstances render it just and
appears in a partnership name contrary to the reasonable; and
provisions of the first paragraph is liable as 4 3. Have dissolution and winding up by
general partner to partnership creditors who decree of court.
extend credit to the partnership without actual A limited partner shall have the right to
knowledge that he is not a general partner. receive a share of the profits or other
compensation by way of income, and to the
- The said limited partner despite being return of his contribution as provided in
liable to the partnership creditor as a Articles 1856 and 1857.
general partner will not acquire the rights
of a general partner.

Article 1847: LIMITED PARTNERSHIP:

If the certificate contains a false - Kailangan may at least one general
statement, one who suffers loss by reliance partner
on such statement may hold liable any party - Must always be in writing and file for
to the certificate who knew the statement to record in the office of SEC
be false: - Can only contribute cash and properties
- The surname of a limited partner shall not
1. At the time he signed the certificate, or be included in the partnership name;
2. Subsequently, but within a sufficient contravention of this provision will make
time before the statement was relied the said limited partner liable to
upon to enable him to cancel or amend partnership creditor as a general partner
the certificate, or to file a petition for its but will not receive rights of a general
cancellation or amendment as provided partner
in Article 1865.
- A limited partner cannot take part in the
administration or management of the
partnership or else he/she will become
liable as a general partner
- Additional limited partners ay pwede, need
lang ng amendment sa certificate of
limited partnership
- Pwede ang General-Limited Partner
- He can only demand and receive cash in
return for his contribution unless iba ang
stipulated sa certificate or all partners
agreed na iba ang return of his
contribution
- Iba pa ang assignee sa substituted limited
partner
- Limited partners are given priority over
general partners
- Death, insolvency, retirement, and insanity
of a limited partner will not dissolve the
partnership