III.

CLASSES OF PARTNERSHIP AND PARTNERS partners may possess at the time of the
celebration of the contract.
A. Kinds of Partnership Property belonged to each of the parties
1. As to object at the time of the construction of the
Art. 1776. As to object, a partnership is
partnership;
either universal or particular. Profits which may be acquired from the
As regards the liability of the partners, a
property contributed.
partnership may be general or limited. 3) Presumption when kind of universal
partnership not specified: merely a
ART. 1777. A universal partnership may
partnership of profits.
refer to all the present property or to all the
ART. 1781. Articles of universal
profits. (1672)
partnership, entered into without
ART. 1778. A partnership of all present specification of its nature, only
property is that in which the partners constitute a universal partnership of
contribute all the property which actually profits.
belongs to them to a common fund, with the Reason: universal partnership of profits
intention of dividing the same among imposes less obligations on the partners,
themselves, as well as all the profits they may since they preserve the ownership of their
acquire therewith. (1673) separate property.
4) Persons disqualified from universal
ART. 1779. In a universal partnership of partnership.
all present property, the property which Art. 1782. Persons who are
belongs to each of the partners at the time of prohibited from giving each other any
the constitution of the partnership, becomes donation or advantage cannot enter into
the common property of all the partners, as a universal partnership.
Partnership formed in violation thereof:
well as all the profits which they may acquire
null and void
therewith.
A stipulation for the common enjoyment
2. As to liability of partners
of any other profits may also be made; but the
a. General partnership
property which the partners may acquire b. Limited partnership
subsequently by inheritance, legacy or
donation cannot be included in such General Limited
As to:
stipulation, except the fruits thereof. partner/ship partner/ship
Liability Personally liable Extends only to
a. Universal partnership for partnership capital
1) Universal partnership of present property obligations contribution
2) Universal partnership of profits comprises all Absent All of the No share in the
that the parties may acquire by their industry manner of general partners management of a
or work during the existence of the manageme have equal right limited
partnership and the usufruct of movable or nt agreed in the partnership =>
upon management of he renders
immovable property which each of the
the business himself liable to

1
 General Limited General Limited
As to: As to:
partner/ship partner/ship partner/ship partner/ship
creditors as a conduct of the set forth by law;
general partner if parties Composed only
he takes part in of general
the control of the partners;
business Must operate
Contributio Money, property Cash or property, under a firm
n or industry but not services name (Limited)
Being party Otherwise Not a proper May carry on any
to a party to a business which
proceeding proceeding by or could be carried
against a on by a general
partnership, partner.
unless he is also c. Anonymous partnership (Sociedad
a general Anonima)
manager, or
where the object 3. As to business
of the proceeding a. Commercial/trading partnership: formed
is to enforce a for the transaction of business
limited partners b. Non-commercial/non-trading partnership:
right against, or
formed for the exercise of a profession.
liability to, the
partnership.
B. Kinds of partners
Assignment May not be Freely assignable 1. As to liability:
of interest assigned ART. 1816. All partners, including
without the
industrial ones, shall be liable pro rata with all
consent of the
other partners their property and after all the partnership
Name May appear in Generally, not. assets have been exhausted, for the contracts
the firm name which may be entered into in the name and for
Freedom to Prohibited. Not prohibited the account of the partnership, under its
engage to signature and by a person authorized to act for
business the partnership.
Effect of Dissolves Does NOT; However, any partner may enter into a
retirement, partnership executor or
separate obligation to perform a partnership
death, administrator
insanity or shall have the contract. (n)
insolvency rights of a limited
of a partner partner in selling ART. 1843. A limited partnership is one
estate. formed by two or more persons under the
Who may May be created by the provisions of the following article, having as
constitute constituted in members after members one or more general partners and
any form by compliance with one or more limited partners. The limited
contract or the requirements

2
 partners as such shall not be bound by the
obligations of the partnership.
a. General: one whose liability to third
persons extends to his separate
property;
- May either be a capitalist or
industrial partner.
b. Limited: one whose liability to third
persons is limited to his capital
contribution; special partner
2. As to contribution:
Art. 1767
ART. 1789. An industrial partner cannot
engage in business for himself unless the
partnership expressly permits him to do so;
and if he should do so, the capitalist partners
paragraph, No. 2, shall be satisfied out of
may either exclude him from the firm or avail
partnership assets alone when such partner
themselves of the benefits which he may have
had been prior to dissolution:
obtained in violation of this provision, with a
right to damages in either case. (n)
ART. 1845. The contributions of a limited
partner may be cash or other property, but not
services.
Notes:
a. Capitalist: one who contributes money or property to
the common fund
b. Industrial: one who contributes only his industry or
personal service
3. As to degree/manner of connection:
ART. 1834. After dissolution, a partner
can bind the partnership, except as provided in
the third paragraph of this article:
(1) By an act appropriate for winding up
partnership affairs or completing
transactions unfinished at dissolution;
(2) By any transaction which would bind the
partnership if dissolution had not taken
place, provided the other party to the
transaction:
(a) Had extended credit to the
partnership prior to dissolution and
had no knowledge or notice of the
dissolution; or
(b) Though he had not so extended
credit, had nevertheless known of the
partnership prior to dissolution, and
having no knowledge or notice of
dissolution, the fact of dissolution
had not been advertised in a
newspaper of general circulation in
the place (or in each place if more
than one) at which the partnership
was regularly carried on.
The liability of a partner under the first
(1) Unknown as a partner to the person
with whom the contract is made; and
(2) So far unknown and inactive in
partnership affairs that the business
reputation of the partnership could
not be said to have been in any
degree due to his connection with it.
The partnership is in no case bound by
any act of a partner after dissolution:
(1) Where the partnership is dissolved
because it is unlawful to carry on the
business, unless the act is appropriate
for winding up partnership affairs; or
(2) Where the partner has become
insolvent; or
(3) Where the partner had no authority to
wind up partnership affairs, except by a
transaction with one who
(a) Had extended credit to the
partnership prior to dissolution and
3
 had no knowledge or notice of his
want of authority; or
(b) Had not extended credit to the
partnership prior to dissolution, and,
having no knowledge or notice of his
want of authority, the fact of his want
of authority has not been advertised
in the manner provided for
advertising the fact of dissolution in
the first paragraph, No. 2(b).
Nothing in this article shall affect the
liability under article 1825 of any person who
after dissolution represents himself or
consents to another representing him as a
partner in a partnership engaged in carrying
on business. (n)
ART. 1815. Every partnership shall
operate under a firm name, which may or may
not include the name of one or more of the
partners.
Those who, not being members of the
partnership, include their names in the firm
name, shall be subject to the liability of a
partner. (n)
Notes:
a. Ostensible: one who takes active part and known to
the public as a partner in the business;
- May be actual or nominal partner
b. Nominal
c. Dormant: one who does not take active part in the
business and is not known or held out as partner.
4. As to time of joining:
ART. 1826. A person admitted as a
partner into an existing partnership is liable
for all the obligations of the partnership
arising before his admission as though he had
been a partner when such obligations were
incurred, except that this liability shall be
satisfied only out of partnership property,
unless there is a stipulation to the contrary.
Notes:
a. Original: one who is a member of the partnership
from the time of its organization
b. Incoming: a person lately, or about to be, taken into
an existing partnership as a member
5. As to special duties:
ART. 1800. The partner who has been
appointed manager in the articles of
partnership may execute all acts of
administration despite the opposition of his
partners, unless he should act in bad faith; and
his power is irrevocable without just or lawful
cause. The vote of the partners representing
the controlling interest shall be necessary for
such revocation of power.
A power granted after the partnership
has been constituted may be revoked at any
time. (1692a)
ART. 1836. Unless otherwise agreed, the
partners who have not wrongfully dissolved
the partnership or the legal representative of
the last surviving partner, not insolvent, has
the right to wind up the partnership affairs,
provided, however, that any partner, his legal
representative or his assignee, upon cause
shown, may obtain winding up by the court. (n)
Notes:
a. Managing: one who manages the affairs or business
of the partnership;
- General or real
b. Liquidating: one who takes charge of the winding up
of partnership affairs upon dissolution
6. As to status at dissolution:
4
 ART. 1840. In the following cases,
creditors of the dissolved partnership are also
creditors of the person or partnership
continuing the business:
(1) When any new partner is admitted into
an existing partnership, or when any
partner retires and assigns (or the
representative of the deceased partner
assigns) his rights in partnership
property to two or more of the partners,
or to one or more of the partners and
one or more third persons, if the
business is continued without liquidation
of the partnership affairs;
(2) When all but one partner retire and
assign (or the representative of a
deceased partner assigns) their rights in
partnership property to the remaining
partner, who continues the business
without liquidation of partnership
affairs, either alone or with others;
(3) When any partner retires or dies and the
business of the dissolved partnership is
continued as set forth in Nos. 1 and 2 of
this article, with the consent of the
retired partners or the representative of
the deceased partner, but without any
assignment of his right in partnership
property;
(4) When all the partners or their
representatives assign their rights in
partnership property to one or more a.
(5) When any partner wrongfully causes a
dissolution and the remaining partners
continue the business under the
provisions of article 1837, second
paragraph, No. 2, either alone or with
others, and without liquidation of the
partnership affairs;
(6) When a partner is expelled and the
remaining partners continue the
business either alone or with others
without liquidation of the partnership
affairs.
The liability of a third person 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
is a stipulation to the contrary.
When the business of a partnership after
dissolution is continued under any conditions
set forth in this article the creditors of the
dissolved partnership, as against the separate
creditors of the retiring partner or deceased
partner or the representative of the deceased
partner, have a prior right to any claim of the
retired partner or the representative of the
deceased partner against the person or
partnership continuing the business, on
account of the retired or deceased partners
interest in the dissolved partnership or on
account of any consideration promised for such
interest or for his right in partnership
property.
Nothing in this article shall be held to
modify any right of creditors to set aside any
assignment on the ground of fraud. The use by
the person or partnership continuing the
business of the partnership name, or the name
of a deceased partner as part thereof, shall not
of itself make the individual property of the
deceased partner liable for any debts
contracted by such person or partnership.
ART. 1842. The right to an account of his
interest shall accrue to any partner, or his legal
representative as against the winding up
partners or the surviving partners or the
person or partnership continuing the business,
at the date of dissolution, in the absence of
any agreement to the contrary. (n)
5

Notes:
b. Retiring: one withdrawn from the partnership; a withdrawing
partner
c. Continuing: one who continues the business of a partnership
after it has been dissolved by reason of the admission of a
new partner, or the retirement, death, or expulsion of one or
more partners.
d. Surviving: one who remains after a partnership has been
dissolved by the death of any partner third persons who
promise to pay the debts and who continue the business of
the dissolved partnership;
IV. OBLIGATION OF PARTNERS TO ONE ANOTHER
A. Promised contribution
ART. 1784. A partnership begins from the
moment of the execution of the contract, unless it is
otherwise stipulated. (1679)
ART. 1789. An industrial partner cannot engage
in business for himself unless the partnership
expressly permits him to do so; and if he should do
so, the capitalist partners may either exclude him
from the firm or avail themselves of the benefits
which he may have obtained in violation of this
provision, with a right to damages in either case. (n)
ART. 1790. Unless there is a stipulation to the
contrary, the partners shall contribute equal shares
to the capital of the partnership. (n)
ART. 1791. If there is no agreement to the
contrary, in case of an imminent loss of the business
of the partnership, any partner who refuses to
contribute an additional share to the capital, except
an industrial partner, to save the venture, shall be
obliged to sell his interest to the other partners. (n)
ART. 1811. A partner is co-owner with his
partners of specific partnership property.
The incidents of this co-ownership are such
that:
(1) A partner, subject to the provisions of this Title
and to any agreement between the partners,
has an equal right with his partners to possess
specific partnership property for partnership
purposes; but he has no right to possess such
property for any other purpose without the
consent of his partners;
(2) A partners 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 partners right in specific partnership
property is not subject to attachment or
execution, except on a claim against the
partnership. When partnership property is
attached for a partnership debt the partners,
or any of them, or the representatives of a
deceased partner, cannot claim any right under
the homestead or exemption laws;
(4) A partners right in specific partnership
property is not subject to legal support under
article 291. (n)
ART. 1845. The contributions of a limited
partner may be cash or other property, but not
services.
1. Money
ART. 1786. Every partner is a debtor of
the partnership for whatever he may have
promised to contribute hereto.
He shall also be bound for warranty in
case of eviction with regard to specific and
determinate things which he may have
contributed to the partnership, in the same
cases and in the same manner as the vendor is
bound with respect to the vendee.
He shall also be liable for the fruits
thereof from the time they should have been
delivered, without the need of any demand.
(1681a)
6

a. Consequence of default
ART. 1788. A partner who has
undertaken to contribute a sum of money and
fails to do so becomes a debtor for the interest
and damages from the time he should have
complied with his obligation.
The same rule applies to any amount he
may have taken from the partnership coffers,
and his liability shall begin from the time he
converted the amount to his own use. (1682)
ART. 1794. Every partner is responsible
to the partnership for damages suffered by it
through his fault, and he cannot compensate
them with the profits and benefits which he
may have earned for the partnership by his
industry. However, the courts may equitably
lessen this responsibility if through the
partners extraordinary efforts in other
activities of the partnership, unusual profits
have been realized. (1686a)
b. Remedies
ART. 1831. On application by or for a
partner, the court shall decree a dissolution
whenever: (2) A partner becomes in any other
way incapable of performing his part of the
partnership contract;
ART. 1838. Where a partnership contract
is rescinded on the ground of the fraud or
misrepresentation of one of the parties
thereto, the party entitled to rescind is,
without prejudice to any other right, entitled:
(1) To a lien on, or right of retention of, the
surplus of the partnership property after
satisfying the partnership liabilities to third
persons for any sum of money paid by him
for the purchase of an interest in the
partnership and for any capital or advances
contributed by him;
(2) To stand on, after all liabilities to third
persons have been satisfied, in the place of
the creditors of the partnership for any
payments made by him in respect of the
partnership liabilities; and
(3) To be indemnified by the person guilty of
the fraud of making the representation
against all debts and liabilities of the
partnership. (n)
2. Property
a. Form or kind
b. Time and manner of delivery
c. Appraisal
ART. 1787. When the capital or a part
thereof which a partner is bound to contribute
consists of goods, their appraisal must be
made in the manner prescribed in the contract
of partnership, and in the absence of
stipulation, it shall be made by experts chosen
by the partners, and according to current
prices, the subsequent changes thereof being
for the account of the partnership. (n)
ART. 1773
d. Warranties and liability for fruits
ART. 1786. Every partner is a debtor of
the partnership for whatever he may have
promised to contribute hereto.
He shall also be bound for warranty in
case of eviction with regard to specific and
determinate things which he may have
contributed to the partnership, in the same
cases and in the same manner as the vendor is
bound with respect to the vendee.
He shall also be liable for the fruits
thereof from the time they should have been
delivered, without the need of any demand.
(1681a)
7

e. Risk of loss
ART. 1786.
ART. 1794.
ART. 1795. The risk of specific and
determinate things, which are not fungible,
contributed to the partnership so that only
their use and fruits may be for the common
benefit, shall be borne by the partner who
owns them.
If the things contributed are fungible, or
cannot be kept without deteriorating, or if they
were contributed to be sold, the risk shall be
borne by the partnership. In the absence of
stipulation, the risks of things brought and
appraised in the inventory, shall also be borne
by the partnership, and in such case the claim
shall be limited to the value at which they were
appraised. (1687)
3. Industry or service
ART. 1789. An industrial partner cannot
engage in business for himself unless the
partnership expressly permits him to do so;
and if he should do so, the capitalist partners
may either exclude him from the firm or avail
themselves of the benefits which he may have
obtained in violation of this provision, with a
right to damages in either case. (n)
ART. 1845. The contributions of a limited
partner may be cash or other property, but not
services.
4. Amount of contribution
ART. 1784. A partnership begins from the
moment of the execution of the contract,
unless it is otherwise stipulated. (1679)
DOWN TO 1809
B. Fiduciary duty
1. Secret benefit or profits
2. Engaging in competitive business
ART. 1808. The capitalist partners cannot
engage for their own account in any operation
which is of the kind of business in which the
partnership is engaged, unless there is a
stipulation to the contrary.
Any capitalist partner violating this
prohibition shall bring to the common funds
any profits accruing to him from his
transactions, and shall personally bear all the
losses. (n)
ART. 1789. An industrial partner cannot
engage in business for himself unless the
partnership expressly permits him to do so;
and if he should do so, the capitalist partners
may either exclude him from the firm or avail
themselves of the benefits which he may have
obtained in violation of this provision, with a
right to damages in either case. (n)
ART. 1794. Every partner is responsible
to the partnership for damages suffered by it
through his fault, and he cannot compensate
them with the profits and benefits which he
may have earned for the partnership by his
industry. However, the courts may equitably
lessen this responsibility if through the
partners extraordinary efforts in other
activities of the partnership, unusual profits
have been realized. (1686a)
3. Collected share in firm credit
ART. 1793. A partner who has received,
in whole or in part, his share of a partnership,
when the other partners have not collected
theirs, shall be obliged, if the debtor should
thereafter become insolvent, to bring to the
partnership capital what he received even
8
 though he may have given receipt for his share
only.
4. Collections from common debtors
ART. 1792. If a partner authorized to
manage collects a demandable sum, which was
owed to him in his own name, from a person
who owed the partnership another sum also
demandable, the sum thus collected shall be
applied to the two credits in proportion to their
amounts, even though he may have given a
receipt for his own credit only; but should he
have given it for the account of the partnership
credit, the amount shall be fully applied to the
latter.
The provisions of this article are
understood to be without prejudice to the right
granted to the debtor by Article 1252, but only
if the personal credit of the partner should be
more onerous to him. (1684)
C. Participation in losses
V. PROPERTY RIGHTS OF A PARTNER
Art. 1810. The property rights of a partner are:
(1) His rights in specific partnership property;
(2) His interest in the partnership; and
(3) His right to participate in the management.
Notes:
Principal rights: Art. 1810
Related rights:
(a) Right to reimbursement for amounts advanced to the
partnership and to indemnification for risks in
consequence of management
(b) Right of access and inspection of partnership books
(c) Right to true and full information of all things affecting
the partnership
(d) Right to a formal account of partnership affairs under
certain circumstances; and
(e) Right to have the partnership dissolved (under certain
conditions)
Art. 1812. A partners interest in th
his share of the profits and surplus.
Notes:
Profit the excess of returns over expenditure in a
transaction or series of transactions; or the net income of
the partnership for a given period of time.
Surplus assets of the partnership after partnership debts
and liabilities are paid and settled and the rights of the
partners among themselves are adjusted;
- Excess of assets over liabilities
Art. 1813. A conveyance by a partner of his
whole interest in the partnership does not of itself
dissolve the partnership, or, against the other
partners in the absence of agreement, entitle the
assignee, during the continuance of the partnership,
to interfere in the management or administration of
the partnership business or affairs, or to require any
information or account of 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 assignors interest
and may require an account from the date only of the
last account agreed to by all the partners.
ART. 1814. Without prejudice to the preferred
rights of partnership creditors under article 1827, on
due application to a competent court by any
judgment creditor of a partner, the court which
entered the judgment, or any other court, may
charge the interest of the debtor partner with
payment of the unsatisfied amount of such judgment
debt with interest thereon; and may then or later
appoint a receiver of his share of the profits, and of
any other money due or to fall due to him in respect
9
 of the partnership, and make all other orders,
directions, accounts and inquiries which the debtor
partner might have made, or which circumstances of
the case may require.
The interest charged may be redeemed at any time
before foreclosure, or in case of a sale being directed
by the court, may be purchased without thereby
causing a dissolution:
(1) With separate property, by any one or more of
the partners; or
(2) With partnership property, by any one or more
of the partners with the consent of all the
partners whose interests are not so charged or
sold.
Nothing in this Title shall be held to deprive a partner
of his right, if any, under the exemption laws, as
regards his interest in the partnership. (n)
A. Specific partnership property
1. Co-ownership sui generis
Art. 1811. A partner is co-owner with his
partners of specific partnership property.
The incidents of this co-ownership are such that:
(1) A partner, subject to the provisions of this Title
and to any agreement between the partners, has
an equal right with his partners to possess
specific partnership property for partnership
purposes; but he has no right to possess such
property for any other purpose without the
consent of his partners;
(2) A partners 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 partners 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 partners, cannot
claim any right under the homestead or
exemption laws;
(4) A partners right in specific partnership property
is not subject to legal support under art. 291.
a. Equal rights to possess
Art. 1807. Every partner must account to the
partnership for any benefit, and hold as trustee for it
any profits delivered by him without the consent of
the other partners from any transaction connected
with the formation, conduct, or liquidation of the
partnership or from any use by him of its property.
ART. 1788. A partner who has undertaken to
contribute a sum of money and fails to do so
becomes a debtor for the interest and damages from
the time he should have complied with his obligation.
The same rule applies to any amount he may
have taken from the partnership coffers, and his
liability shall begin from the time he converted the
amount to his own use. (1682)
Art. 1811.
ART. 1803. When the manner of management
has not been agreed upon, the following rules shall
be observed:
(1) All the partners shall be considered agents and
whatever any one of them may do alone shall
bind the partnership, without prejudice to the
provisions of Article 1801.
(2) None of the partners may, without the consent
of the others, make any important alteration in
the immovable property of the partnership,
even if it may be useful to the partnership. But
if the refusal of consent by the other partners
is manifestly prejudicial to the interest of the
partnership, the courts intervention may be
sought. (1695a)
ART. 1800. The partner who has been
appointed manager in the articles of partnership may
execute all acts of administration despite the
opposition of his partners, unless he should act in
10
bad faith; and his power is irrevocable without just or
lawful cause. The vote of the partners representing
the controlling interest shall be necessary for such
revocation of power.
A power granted after the partnership has
been constituted may be revoked at any time.
(1692a)
ART. 1818. Every partner is an agent of the
partnership for the purpose of its business, and the
act of every partner, including the execution in the
partnership name of any instrument, for apparently
carrying on in the usual way the business of the
partnership of which he is a member binds the
partnership, unless the partner so acting has in fact
no authority to act for the partnership in the
particular matter, and the person with whom he is
dealing has knowledge of the fact that he has no
such authority.
An act of a partner which is not apparently for
the carrying on of the business of the partnership in
the usual way does not bind the partnership unless
authorized by the other partners.
Except when authorized by the other partners
or unless they have abandoned the business, one or
more but less than all the partners have no authority
to:
(1) Assign the partnership property in trust for
creditors or on the assignees promise to pay
the debts of the partnership;
(2) Dispose of the goodwill of the business;
(3) Do any other act which would make it
impossible to carry on the ordinary business of
a partnership;
(5) Confess a judgment;
(6) Enter into a compromise concerning a
partnership claim or liability;
(7) Submit a partnership claim or liability to
arbitration;
(8) Renounce a claim of the partnership.
No act of a partner in contravention of a
restriction on authority shall bind the partnership to
persons having knowledge of the restriction. (n)
b. Non-assignability
Art. 1811.
Note:
Reasons for non-assignability:
(a) It prevents interference by outsiders in partnership
affairs;
(b) It protects the right of other partners and partnership
creditors to have partnership assets applied to firm
debts; and
(c) it is often impossible to measure or value a partners
beneficial interest in a particular partnership asset.
ART. 1819. Where title to real property is in the
partnership name, any partner may convey title to
such property by a conveyance executed in the
partnership name; but the partnership may recover
such property unless the partners act binds the
partnership under the provisions of the first
paragraph of article 1818, or unless such property
has been conveyed by the grantee or a person
claiming through such grantee to a holder for value
without the knowledge that the partner, in making
the conveyance, has exceeded his authority.
Where title to real property is in the name of
the partnership, a conveyance executed by a partner,
in his own name, passes the equitable interest of the
partnership, provided the act is one within the
authority of the partner under the provisions of the
first paragraph of article 1818.
Where title to real property is in the name of
one or more but not all the partners, and the record
does not disclose the right of the partnership, the
partners in whose name the title stands may convey
title to such property, but the partnership may
recover such property if the partners act does not
bind the partnership under the provisions of the first
paragraph of Article 1818, unless the purchaser or
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his assignee, is a holder for value, without
knowledge.
Where the title to real property is in the name
of one or more or all the partners, or in a third
person in trust for the partnership, a conveyance
executed by a partner in the partnership name, or in
his name, passes the equitable interest of the
partnership, provided the act is one within the
authority of the partner under the provisions of the
first paragraph of article 1818.
Where the title to real property is in the names
of all the partners a conveyance executed by all the
partners passes all their rights in such property. (n)
ART. 1840. In the following cases, creditors of
the dissolved partnership are also creditors of the
person or partnership continuing the business:
(1) When any new partner is admitted into an
existing partnership, or when any partner
retires and assigns (or the representative of
the deceased partner assigns) his rights in
partnership property to two or more of the
partners, or to one or more of the partners and
one or more third persons, if the business is
continued without liquidation of the
partnership affairs;
(2) When all but one partner retire and assign (or
the representative of a deceased partner
assigns) their rights in partnership property to
the remaining partner, who continues the
business without liquidation of partnership
affairs, either alone or with others;
(3) When any partner retires or dies and the
business of the dissolved partnership is
continued as set forth in Nos. 1 and 2 of this
article, with the consent of the retired partners
or the representative of the deceased partner,
but without any assignment of his right in
partnership property;
(4) When all the partners or their representatives
assign their rights in partnership property to
one or more third persons who promise to pay
the debts and who continue the business of the
dissolved partnership;
(5) When any partner wrongfully causes a
dissolution and the remaining partners
continue the business under the provisions of
article 1837, second paragraph, No. 2, either
alone or with others, and without liquidation of
the partnership affairs;
(6) When a partner is expelled and the remaining
partners continue the business either alone or
with others without liquidation of the
partnership affairs.
The liability of a third person 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 is a stipulation to the
contrary.
When the business of a partnership after
dissolution is continued under any conditions set
forth in this article the creditors of the dissolved
partnership, as against the separate creditors of the
retiring partner or deceased partner or the
representative of the deceased partner, have a prior
right to any claim of the retired partner or the
representative of the deceased partner against the
person or partnership continuing the business, on
account of the retired or deceased partners interest
in the dissolved partnership or on account of any
consideration promised for such interest or for his
right in partnership property.
Nothing in this article shall be held to modify
any right of creditors to set aside any assignment on
the ground of fraud.
The use by the person or partnership
continuing the business of the partnership name, or
the name of a deceased partner as part thereof, shall
not of itself make the individual property of the
deceased partner liable for any debts contracted by
such person or partnership. (n)
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c. Not subject to support
Art. 1811.
Note:
The right of the partners to specific partnership
property is not subject to legal support.
o Reason: The property belongs to the
partnership and not to the partners.
B. Interest in partnership
1. Scope of interest
Art. 1812. A partners interest in the
partnership is his share of the profits and
surplus.
Notes:
Extent of the partners interest. 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 in liquidating firm debts
or in making advances to the partnership, and until
that occurs, it is impossible to determine the extent
of his interest.
2. Partnership interest vs Rights in specific property
ART. 1813. A conveyance by a partner of his
whole interest in the partnership does not of itself
dissolve the partnership, or, against the other
partners in the absence of agreement, entitle the
assignee, during the continuance of the partnership,
to interfere in the management or administration of
the partnership business or affairs, or to require any
information or account of 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 assignors interest
and may require an account from the date only of the
last account agreed to by all the partners. (n)
Notes:
A partners right in specific partnership property is
not assignable, but he may assign his interest in the
partnership to any of his co-partners or to a third
person without the consent of the other partners, in
the absence of agreement to the contrary.
3. Assignment
Art. 1813.
Notes:
(1) Rights withheld from assignee:
a. To interfere in the management
b. To require any information or account
c. To inspect any of the partnership books
(2) Status and rights of assignor as partner unaffected: no
one may be introduced into the firm as a partner without
the unanimous consent of the partners.
Assignment does not divest the assignor of his status
and rights as a partner nor operate as a dissolution
of the partnership.
(3) Rights of assignee of partners interest:
a. To receive in accordance with his contract the
profits accruing to the assigning partner
b. To avail himself of the usual remedies provided by
law in the event of fraud in the management;
c. To receive the assignors interest in case of
dissolution; and
d. 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.
4. Charging order
ART. 1814. Without prejudice to the preferred
rights of partnership creditors under article 1827, on
due application to a competent court by any
judgment creditor of a partner, the court which
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 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 circumstances of
the case may require.
The interest charged may be redeemed at any
time before foreclosure, or in case of a sale being
directed by the court, may be purchased without
thereby causing a dissolution:
(1) With separate property, by any one or
more of the partners; or
(2) With partnership property, by any one or more
of the partners with the consent of all the
partners whose interests are not so charged or
sold.
Nothing in this Title shall be held to deprive a
partner of his right, if any, under the exemption laws,
as regards his interest in the partnership. (n)
Notes:
Remedies of separate judgment creditor of a partner:
(1) Application for a charging order after securing
judgment on his credit: any amount or portion
thereof which the partnership would otherwise
pay to the debtor-partner should instead be given
to the judgment creditor.
(2) Availability of other remedies: e.g. appointment
of receiver, sale of interest, etc.) applicable if the
judgment debt remains unsatisfied,
notwithstanding the issuance of the charging
order.
C. Participation in management
ART. 1800. The partner who has been
appointed manager in the articles of partnership may
execute all acts of administration despite the
opposition of his partners, unless he should act in
bad faith; and his power is irrevocable without just or
lawful cause. The vote of the partners representing
the controlling interest shall be necessary for such
revocation of power.
A power granted after the partnership has
been constituted may be revoked at any time.
(1692a)
Notes:
Scope of power:
General rule: all and incidental powers of a general
agent necessary to carry out the object of the
partnership in the transaction of its business.
o Exception: when specifically restricted
(1) Issue receipts (as minor power)
(2) Purchase on credit (in a partnership engaged in buying
and selling)
(3) Secure loans and complete construction for use in the
business and necessary to carry out the express object
of the partnership
(4) May sue or be sued in its name or by its duly authorized
representative
(5) Unauthorized to purchase supplies not considered that
for the partnership business, not sell or convey a
partnership property without the consent of all the
partners.
(6) Managing partner may not bind the partnership by a
contract wholly foreign to its business.
ART. 1801. If two or more partners have been
intrusted with the management of the partnership
without specification of their respective duties, or
without stipulation that one of them shall not act
without the consent of all the others, each one may
separately execute all acts of administration, but if
any of them should oppose the acts of the others, the
decision of the majority shall prevail. In case of tie,
the matter shall be decided by the partners owning
the controlling interest. (1693a)
Notes:
(1) Each one may separately perform acts of administration
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 a. One or more managers oppose the acts of the
others: decision of the majority shall prevail
b. In case of tie: shall be decided by the vote of the
partners owning the controlling interest (>50% of
the capital investment)
(2) Requisites for application of rule:
a. Two or more partners have been appointed as
managers
b. No specification of the respective duties
c. No stipulation that one of them shall not act
without the consent of all the others.
ART. 1803. When the manner of management
has not been agreed upon, the following rules shall
be observed:
(1) All the partners shall be considered agents and
whatever any one of them may do alone shall
bind the partnership, without prejudice to the
provisions of Article 1801.
(2) None of the partners may, without the consent
of the others, make any important alteration in
the immovable property of the partnership,
even if it may be useful to the partnership. But
if the refusal of consent by the other partners
is manifestly prejudicial to the interest of the
partnership, the courts intervention may be
sought. (1695a)
D. Access to partnership books
ART. 1818. Every partner is an agent of the
partnership for the purpose of its business, and the
act of every partner, including the execution in the
partnership name of any instrument, for apparently
carrying on in the usual way the business of the
partnership of which he is a member binds the
partnership, unless the partner so acting has in fact
no authority to act for the partnership in the
particular matter, and the person with whom he is
dealing has knowledge of the fact that he has no
such authority.
An act of a partner which is not apparently for
the carrying on of the business of the partnership in
the usual way does not bind the partnership unless
authorized by the other partners.
Except when authorized by the other partners
or unless they have abandoned the business, one or
more but less than all the partners have no authority
to:
(1) Assign the partnership property in trust for
creditors or on the assignees promise to pay
the debts of the partnership;
(2) Dispose of the goodwill of the business;
(3) Do any other act which would make it
impossible to carry on the ordinary business of
a partnership;
(4) Confess a judgment;
(5) Enter into a compromise concerning a
partnership claim or liability;
(6) Submit a partnership claim or liability to
arbitration;
(7) Renounce a claim of the partnership.
No act of a partner in contravention of a
restriction on authority shall bind the partnership to
persons having knowledge of the restriction. (n)
1. General rule
2. When agreement exists
a. Extent of authority
b. Revocation of authority
Art. 1805. The partnership books shall be kept,
subject to any agreement between the partners, at
the principal place of business of the partnership,
and every partner shall at any reasonable hour have
access to and may inspect and copy any of them.
Notes:
(1) Managing or active partner has the duty to keep
partnership books (primarily)
(2) Books to be kept at the principal place of business of the
partnership: to enable partners to have true and full
information of all things affecting the partnership.
(3) at any reasonable hour = hours on business days
throughout the year
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 Art. 1807. Every partner must account to the
E. Right to true and full information partnership for any benefit, and hold as trustee for it
Art. 1806. Partners shall render on demand any profits delivered by him without the consent of
true and full information of all things affecting the the other partners from any transaction connected
partnership to any partner or the legal with the formation, conduct, or liquidation of the
representative of any deceased partner or of any partnership or from any use by him of its property.
partner under legal disability.
G. Reimbursement of advances and indemnification for risks
Note: Only upon demand; information must be used only for ART. 1796. The partnership shall be responsible
a partnership purpose to every partner for the amounts he may have
disbursed on behalf of the partnership and for the
F. Right to formal account
corresponding interest, from the time the expenses
ART. 1809. Any partner shall have the right to a
are made; it shall also answer to each partner for the
formal account as to partnership affairs:
(1) If he is wrongfully excluded from the obligations he may have contracted in good faith in
partnership business or possession of its the interest of the partnership business, and for risks
property by his copartners; in consequence of its management. (1688a)
(2) If the right exists under the terms of any
Notes:
agreement;
Absence of any stipulation to the contrary, every partners is
(3) As provided by Article 1807;
(4) Whenever other circumstances render it an agent of the partnership for the purpose of its business.
Obligation of the partnership:
just and reasonable. (n)
(1) Refund amounts disbursed by the partner in behalf of
Notes: the partnership plus the corresponding interest from the
General rule: partner is not entitled to formal account of time the expenses are made; -- loans or advances made
partnership affairs by a partner to the partnership other than capital
o Reason: rights to know partnership affairs amply contributed by him;
protected under Arts. 1805 & 1806; (2) Answer for the obligations of the partner may have
Can cause inconvenience and unnecessary waste of contracted in good faith in the interest of the partnership
time business
Formal account as a necessary incident to the (3) Answer for the risks in consequence of its management
dissolution of the partnership. Partner not personally liable, provided that he is free from all
o Exceptions: (i.e.) the justification for a formal fault and he acted within the scope of his authority.
accounting even before dissolution of the Compensation: partner not entitled without the consent of
partnership cannot be doubted. all the parties.
Prescriptive period: right to demand accounting exists as
long as the partnership lasts.
o Runs upon the dissolution of the partnership and when
final accounting is done.
Nature of accounting: Action in personam: an action against
a person for the performance of a personal duty on his part.

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