Section 2.
Property
Rights of a Partner
Article 1810-1814
Article. 1810
The property rights of a partner are:
(1) His rights in specific partnership
property;
(2) His interest in the partnership; and
(3) His right to participate in the
management
Extent of property rights of a partner
Principal rights
Related rights
the right to reimbursement for amounts advanced to the partnership and to
indemnification for risks in consequence of management (Art.1796)
the right of access and inspection of partnership books (Art.1805)
the right to true and full information of all things affecting the partnership
(Art.1806)
the right to formal account of partnership affairs under certain
circumstances (Art.1809)
the right to have the partnership dissolved also under certain condition
(Art.1830-1831)
Partnership property Ownership of cetain
and partnership property
capital distingueshed
Changes in value Property used by the
partnership
Partnership property is vary VARIABLE. Its
value may vary from day to day with Property acquired by a
changes in the market value of the partner with partnership
partnership assets, while partnership
capital is CONSTANT.
funds
Property carried in
Assets included partnership books as
Partnership property includes all partnership asset
the property subsequently acquired Other factors tending to
on account of the partnership or
indicate property ownership
with the partnership funds.
Article 1811
The partner is co-owner with his partners of specific
partnership property.
The incidents of this co-ownership are such that:
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;
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;
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;
A partner’s right in specific partnership
property is not subject to legal support under
article 291
Nature of partner’s right in specific
partnership property
Equal right of possession of the property for
partnership purposes
Assignment of right to the property
Attachment or execution
Legal support
Partner’s interest not a debt from partnership
Article 1812
A partner’s interest in
the partnership is his
share of the profits
and surplus.
Nature of partner’s interest in the
partnership
Share of the profits and surplus
The partners interest in the partnership consists of his proportionate share in the profits
during the life of the partnership as a going concern and you share in the surplus after its
dissolution. This interest is assignable by the partner in the absence of any agreement to the
contrary, being personal property:
Extent of the partner’s interest
Nothing is to be considered as the share of a partner but his proportion of the residue or
balance after an account has been taken of the debts and credits, including the amount paid
by the several partners and liquidating firm debts or in making advances to the partnership,
and until that occurs, it is impossible to determine the extent of his interest. This interest in
the surplus alone is available for the satisfaction of the separate debts of the partners.
Article 1813
A conveyance by a partner of his whole interest in the
partnership does not of itself dissolve the partnership, or, as against
the other partners in the absence of agreement, entitle the
assignee, during the continuance of the partnership, to interfere in
the management or administration of the partnership business or
affairs, or to require any information or account of partnership
transactions, or to inspect the partnership books; but it merely
entitles the assignee to receive in accordance with his contract the
profits to which the assigning partner would otherwise be entitled.
However, in case of fraud in the management of the partnership,
the assignee may avail himself of the usual remedies.
In case of a dissolution of the partnership, the assignee is
entitled to receive his assignor’s interest and may require an
account from the date only of the last account agreed to by all the
partners.
Effect of assignment of partner’s
whole interest in partnership
Rights withheld from assignee
To interfere in the management
To require any information or account; or
To inspect any of the partnership books
Status and rights of assignor and partnership
unaffected
Rights of assignee of partner’s
interest
To receive in accordance with his contract the profits
accruing to the assigning partner
To avail himself of the usual remedies provided by law
in the event of fraud in the management
To receive the assignor’s interest in case of
dissolution; and
To require an account of partnership affairs, but only
in case the partnership is dissolved, and such account
shall cover the period from the date only of the last
account agreed to by all the partners.
Dissolution of the partnership
Dissolution not
intended
The mere assignment of a partner's interest does not dissolve the
partnership. Many partnership agreements are made merely as a security
for loans, the assigning partner never intending to destroy the partnership
relation.
Dissolution intended
A partner's conveyance of his interest in the partnership operates as a
dissolution of the partnership only when it is clear that the parties
contemplated and intended the entire withdrawal from the partnership of
such partner in the termination of the partnership as between the partners.
Article 1814
Without prejudice to the preferred rights of
partnership creditors under article 1827, on due
application to a competent court by any judgment
creditor of a partner, the court which entered the
judgment, or any other court, may charge the interest of
the debtor partner with payment of the unsatisfied
amount of such judgment debt with interest thereon;
and may then or later appoint a receiver of his share of
the profits, and of any other money due or to fall due to
him in respect of the partnership, and make all other
orders, directions, accounts and inquiries which the
debtor partner might have made, or which the
circumstances of the case may require.
The interest charged may be redeemed at any
time before foreclosure, or in case of a sale being
directed by the court, may be purchased without
thereby causing a dissolution:
(1) With separate property, by any one or more of the
partners; or
(2) With partnership property, by any one or more of
the partners with the consent of all the partners
whose interests are not so charged or sold.
Nothing in this Title shall be held to deprive a
partner of his right, if any, under the exemption laws, as
regards his interest in the partnership.
Remedies of separate judgment
creditor of a partner
Application for a “charging
order” after securing judgment
on his credit
Preferred rights of partnership
creditors
Availability of other remedies
Redemption or purchase of interest
charged
Redemptioner
The interest of the debtor-partner so charged may be redeemed with the separate
property of anyone or more of the partners, are with partnership property but with the
consent of all the partners whose interests are not so charged or sold.
Redemption price
In an ordinary sale the price of the thing sold theoretically represents its market or
actual value. This is not true in a foreclosure sale where mere inadequacy of the price
obtained at the sheriff's sale is not material because the mortgagor is given the right to
redeem. By the same token valley of the partners interest in the partnership has no
bearing on the redemption price which is likely to be lower since it will be dependent on
the amount of the unsatisfied judgment debt.
Right of redeeming non-deptor partner
For this reason the redeeming non-debtor-partner, it is believed, does not
acquire absolute ownership over the debtor-partner's interest but hold it in
trust for him consistent with the principles of fiduciary relationship.
Thank
You
