ARTICLES 1814- 1821

Reported by:
Angie Louh S. Dioso

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.

Article 1814
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)

Redemption of interest charged:

The interest of the debtor-partner so charged may be

redeemed with the separate property of any one or

more of the partners or with partnership property
but with the consent of all the partners whose
interests are not so charged or sold.

Example:
Jo, Sol and Marlou are partners. Jo is personally indebted to

Elaine in the sum of P200,000 .Elaine filed a complaint against Jo

and obtained from the court a final judgment in his favor.
If Jo is insolvent, Elaine can ask the same court or any competent
court that Jos interest in the partnership be attached or levied
upon for the payment of his debt
The other partners, sol and marlou may redeem or purchase the
interest of Jo, the debtor-partner, before the foreclosure sale or
before the redemption period fixed by the court without dissolving
the partnership.
Note: under an attachment, the property or defendant is placed in

custody of the law to await determination of a suit.

SECTION 3: Obligations of the Partners with Regard

to Third Persons
Article 1815.
Every partnership shall operate under a firm name,
which may or may not include the name of one or more
of the partners. Those who, not being members of the
partnership, include their names in the firm name,
shall be subject to the liability of a partner. (n)

Article 1815
Every partnership shall operate under a firm
name, which may or may not include the name of
one or more of the partners. Those who, not being
members of the partnership, include their names in
the firm name, shall be subject to the liability of a
partner. (n)

Firm: is defined as the name, title or style under which a company

transacts business; a partnership of two or more persons.

Rights of partners to choose firm name:
It may be individual partners
Surnames of all the partners
Surname of one or the surnames of more the members with the
addition of and company
Note: Partnership may adopt any name it wishes as long as it is not

identical with or similar to a name which was previously adopted by

any other entity nor interfere with the rights of others or is contrary
to law. No false or misleading or assumed name shall be used.

Question: Is the names of the deceased persons can be

continued to use as a firm name?
Answer: No the SC has ruled that a partnership cannot

continue to use in its firm names of deceased partners for

such will run counter to article 1815.Under article 1830(5)
ordains that a partnership is dissolved by the death of any
partner.
However, the above ruling was no longer applicable in
view of Rule 302 of the code of professional
responsibilities approved and adopted by the Sc provides
the continued use of the name of a deceased partnership
is permissible provided that the firm indicates in all its
commutations that said partner is deceased.

Article 1816
All partners, including industrial ones, shall be liable
pro rata with all their property and after all the
partnership assets have been exhausted, for the
contracts which may be entered into in the name and for
the account of the partnership, under its signature and
by a person authorized to act for the partnership.
However, any partner may enter into a separate
obligation to perform a partnership contract. (n)

As to the 3rd person , all partners are liable pro-rata and

subsidiary , but as to each other they are liable in
proportion to their capital contribution.
Question: Pre, honey and Dei are in partnership where Dei is
an industrial partner and a sum of p26,000 is owed to Jo.
Pre and honey contributed 15, 000 and 5, 000 respectively .
How does the debt be shared?
Answer: AS to Jo, the partners will share equally in the debt
after exhausting all assets (6, 000) so they will each have to
pay 2,000 regardless of jo being an industrial partner. If dei
is insolvent, or if honey died or prei has left the country the
liability of partners cannot be increased.
As to each other they are liable in proportion to their capital
contribution , so honey and dei shall be reimburse by pre.

Article 1817
Any stipulation against the liability laid down in
the preceding article shall be void, except as among
the partners. (n)

Article 1818
Every partner is an agent of the partnership for the purpose of
its business, and the act of every partner, including the
execution in the partnership name of any instrument, for
apparently carrying on in the usual way the business of the
partnership of which he is a member binds the partnership,
unless the partner so acting has in fact no authority to act for
the partnership in the particular matter, and the person with
whom he is dealing has knowledge of the fact that he has no
such authority

Article 1818
An act of a partner which is not apparently for the carrying on of business of the partnership
in the usual way does not bind the partnership unless authorized by the other partners
.
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 assignee's promise to pay
the debts of the partnership;
(2) Dispose of the good-will 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)

Article 1819

Where title to real property is in the partnership name, any

partner may convey title to such property by a conveyance
executed in the partnership name; but the partnership may
recover such property unless the partner's act binds the
partnership under the provisions of 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 knowledge that the partner, in making the conveyance,
has exceeded his authority.

Article 1819
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.

Article 1819
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 his
assignee, is a holder for value, without knowledge.

Article 1819
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 own
name,

passes

the

equitable

interest

partnership, provided the act is one within th

of

the

Article 1819
Where the title to real property is in the name of
all the partners a conveyance executed by all the
partners passes all their rights in such property. (n) e
authority of the partner under the provisions of the
first paragraph of article 1818.

Suppose, pre, Elaine and sol are partners engaged in the

buying and selling of property, and the following
situations occurs:
Pre without authority sells land to Jo in the partnerships
name but jo immediately sells it to Marlou. The land
title was originally under the partnerships name. can the
partnership recover the land?
Tiltle passes to jo then to marlou, the partnership
cannot recover once it was transferred to marlou but if
the land was still in jo , they could have recovered it if
the contract is not binding

Article 1820
An admission or representation made by any
partner concerning partnership affairs within the
scope of his authority in accordance with this Title is
evidence against the partnership. (n)

Article 1821
Notice to any partner of any matter relating to partnership
affairs, and the knowledge of the partner acting in the
particular matter, acquired while a partner or then present
to his mind, and the knowledge of any other partner who
reasonably could and should have communicated it to the
acting partner, operate as notice to or knowledge of the
partnership, except in the case of fraud on the partnership,
committed by or with the consent of that partner. (n)

3 cases of knowledge of a partner

1.

knowledge of a partner acting in the particular

matter acquired while a partner

2. knowledge of a partner acting in the particular

matter then present to his mind.
3. knowledge of any other partner who reasonably
could and should have communicated it to the acting
partner.