CHAP 2

• Obligations of the partners

  • Obligation to contribute what had been promised
  • Prohibition against engaging in business
  • Obligation to contribute additional capital
  • Obligation of a managing partner to apply payment received to partnership credit
  • Obligation to return credit received
  • Obligation to indemnify for damages
  • The risk of loss
  • Right to refund for amounts disbursed on behalf of the partnership
  • Right to associate another in share
  • Right to inspect partnership books
  • Obligation to render on demand true and full information of all things affecting the partnership
  • Right to a formal account
  • Obligation to share in the profits and losses
  • Right to participate in management
• Obligation to deliver the fruits/interest

  Warranty against eviction
• Industrial partner


  Cannot engage in business for himself unless the partnership expressly permits him to do so
• Capitalist partner


  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
• Property rights of a partner


  • His rights in specific partnership property
  • His interest in the partnership
  • His right to participate in the management
• Any stipulation against the liability laid down in the preceding article shall be void, except as among the partners
• Acts apparently for the carrying on of usual business

  • Any act of a partner which is apparently for the carrying on of the usual business of the partnership binds the latter, including the execution of any instrument in the partnership name
  • The partnership is not bound when the partner has in fact no authority to act and the person with whom he deals has knowledge of such fact
• Acts not apparently for carrying on of the usual business

  • Acts of a partner which is not apparently for carrying on of the usual business does not bind the partnership
  • The partnership is bound if the other partners authorized him to do the act
• Acts of strict dominion

  • One or some of the partners have no authority to assign the partnership property in trust for creditors, dispose of the goodwill of the business, do any other act which makes it impossible to carry on the ordinary business of the partnership, confess a judgment, enter into a compromise concerning a partnership claim or liability, submit a partnership claim or liability to arbitration, or renounce a claim of the partnership
  • They may do so if authorized by all the partners or the other partners have abandoned the business
• Conveyance of partnership real property

  • Any partner may convey the real property in the name of the partnership
  • Where the title is in the name of one or more but not all the partners, the partners having title may convey title, and the partnership may recover it when the partners conveying title have no authority to carry on the usual business of the partnership, unless the purchaser or his assignee is a holder for value and without knowledge that the act exceeded authority
• Liability of the partnership for admission by a partner


  An admission or representation by any partner may be used as evidence against the partnership when it concerns partnership affairs and such affairs are within the scope of his authority
• Liability of the partnership for wrongful acts of a partner


  The partnership is solidarily liable with the partner who causes loss or injury to any person not a partner, or incurs any penalty through any wrongful act or omission in the ordinary course of the business of the partnership or not in such ordinary course of business, but with the authority of his co-partners
• Liability of the partnership for misapplication of money or property


  The partnership is liable for losses suffered by a third person whose money or property was received by a partner acting within the scope of his apparent authority and misapplied it, or received by the partnership in the course of its business and misapplied by any partner while it is in the custody of the partnership
• Partner by estoppel


  A person who, by words spoken or written or by conduct represents himself as a partner or consents to another representing him to anyone as a partner in an existing partnership or with one or more persons not actual partners
• Liability of a partner by estoppel


  • He is liable as though he were a partner when there is an existing partnership, all the partners consented to the representation, and a partnership liability results
  • He is liable jointly and pro rata (as though he were a partner in fact) with those who consented to the representation when there is an existing partnership but not all the partners consented, or there is no existing partnership and all those represented as partners consented to the representation
  • He is liable separately when there is an existing partnership but none of the partners consented, or there is no existing partnership and not all of those represented as partners consented to the representation
• Liability of a person admitted as a partner

  • He is liable for obligations incurred subsequent to his admission as the other partners are liable
  • He is liable for obligations incurred before his admission, but will be satisfied only out of the partnership property, unless otherwise stipulated that he fully assumes such obligations