1st MEETING

Article 1767 By the contract of partnership two or more persons bind themselves to contribute money,
property, or industry to a common fund, with the intention of dividing the profits among themselves. Two or
more persons may also form a partnership for the exercise of a profession. (1665a).

 NOMINATE - There is a name given by the law - Contract of Partnership:

 - Includes not only natural persons

but also JURIDICAL persons. A corporation may NOT be a partner but it may engage in JOINT

 BIND THEMSELVES - Must be capable and competent, meaning, the following may are not included: 1.
Minors 2. Emancipated Minors 3. Those under civil interdiction – accessory penalty of being convicted
of crimes 4. Insane persons 5. Incompetent persons (see oblicon notes) - HOWEVER, if the person is
only a SUSPE

 TO CONTRIBUTE MONEY, PROPERTY OR INDUSTRY - Makes the contract onerous since this is MUTAL
and ALL must give either one of the above –

 TO A COMMON FUND TO DIVIDE PROFITS AMONGST EACH OTHER - The primary objective of
partnerships is to make profits. Sharing profits need not be equal. - Sharing ratios are determined by
the partner’s agreement, and if there was no agreement, then the ratios will be based on the ratio of
the partners’ contributions. - Sharing ratios for losses will be the same as the sharing ratios for profits.
- The industrial partner shall NOT share in losses. - The industrial partner is exempt only to the
partners but not to 3rd parties without prejudice to

 CONSENT (DELECTUS PERSONAE) - You can’t join a partnership without the consent of ALL partners.
Why? Because the partnership will need to be dissolved before you are admitted and a new partnership
will be made in its place.

Article 1768 The partnership has a juridical personality separate and distinct from that of each of the partners,
even in case of failure to comply with the requirements of article 1772, first paragraph. Can sue and be sued,
acquire any kind of property, insolvency of a partnership does not mean that the partners themselves are
insolvent.

Article 1769 In determining whether a partnership exists, these rules shall apply: (1) Except as provided by
article 1825, persons who are not partners as to each other are not partners as to third persons. (2) Co-
ownership or co-possession odes not of itself establish a partnership, whether such co-owners or co-
possessors do or do not share any profits made by the use of the property (3) The sharing of gross returns
does not of itself establish a partnership, whether or not the persons sharing them have a joint or common
right or interest in any property from which the returns are derived (4) The receipt by a person of a share in
the profits of a business is prima facie evidence that he is partner in the business, but no such inference shall
be drawn if such profits were received in payment: (a) As a debt by installments or otherwise; (b) As wages of
an employee or rent to a landlord (c) As an annuity to a widow or representative of a deceased partner (d) As
interest on a loan, though the amounts of payment vary with the profits of the business (e) As consideration
for the sale of a goodwill of a business or other property by installments or otherwise.
Article 1770 A partnership must have a lawful object or purpose, and must be established for the common
benefit or interest of the partners.

When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the
State, without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and
effects of a crime. (1666a)

The partnership must have a lawful object or purpose - Lawful object refers to CAPITAL - Lawful purpose

will cause it to be dissolved and profits sh -

Partnership is considered void from the beginning - Profit and instrument of the crime is confiscated - The only
returnable items are those that were never related to or connected with the crime committed

Article 1771 A partnership may be constituted in any form, except where immovable property or real rights are

created orally? Yes. A pa

not covered by the Statute of Fraud since these are not necessarily required to be in writing (contract of
r real rights are contributed to the partnership,

transfer of OWNERSHIP of immovable property MUST BE REGISTERED with the REGISTRY OF PROPERTY in
the
MERE CONSENT.

Article 1772 Every contract of partnership having a capital of P3,000.00 or more, in money or property, shall
appear in a public instrument, which must be recorded in the office of the Securities and Exchange
Commission. Failure to comply with the requirements of the preceding paragraph shall not affect the liability of
the partnership and the members thereof to third persons. (n)

Purpose of Registration: (1) Condition for obtaining a license to engage in business and in trade (2) 3rd
persons want proof that the partnership is existent, who the partners are and what the capitalization is before
they enter into contracts/engage in business. (3) The government requires this so that tax liabilities may not

ade by the contracting parties.

Article 1773 A contract of partnership is void, whenever immovable property is contributed thereto, if an
inventory of said property is not made, signed by the parties and attached to the public instrument. (1668a)

Refers specifically where one or both of the parties contribute immovable property. The requirements are: (1)
The contract must be in a public instrument (2) An inventory of the immovable property must be made, signed
by BOTH parties and attached to the public instrument, otherwise the partnership is VOIDED.

Article 1774 Any immovable property or an interest therein may be acquired in the partnership name. Title so
acquired can be conveyed only in the partnership name. (n)

Being a juridical entity, a partnership can acquire property and subsequently become its owner.
Article 1775 Associations and societies whose articles are kept secret among members, and wherein anyone of
the members may contract in his own name with third persons, shall have no juridical personality and shall be
governed by the provisions relating to co-ownership. (1669)

There is no juridical entity since the members can contract with 3rd persons in their own name without binding
who cannot act alone (2) Articles of Partnership
are known to ALL partners AND to the GENERAL PUBLIC.

Article 1776 As to its object, a partnership is either universal or particular. As regards to the liability of the
partners, a partnership may be general or limited. (1671a)

Classifications of Partnerships:

(1) As to the Object:

(a) Universal Partnership of All Present Property – defined in Article 1778

(b) Universal Partnership of All Profits – defined in Article 1780

(c) Particular Partnerships – defined in Article 1783

(2) As to the Liability:

(a) General – general partners are liable PRO-RATA and subsidiarily, sometimes solitarily, with their
own property/assets if the partnership is insolvent. (may include industrial partners)

(b) Limited – limited partners are liable only up to the extent of their contribution

(3) As to Duration:

(a) At will – no particular undertaking, can be dissolved at any time

(b) With a Fixed Term – may only be dissolved upon the end of its term unless continued by the
partners

(4) As to Legality of Existence:

(a) De Jure – complied with ALL requirements

(b) De Facto – failed to comply with ALL requirements

(5) As to Representation to Others:

(a) Ordinary/Real – actually exists

(b) Ostensible/by Estoppel – exists only to partners

(6) As to Publicity:

(a) Secret – some partners are not known to the public

(b) Open/Notorious – all partners are known to the public

(7) As to Purpose:

(a) Commercial/Trading – business transactions

(b) Professional/Non-Trading – exercise of professions

Kinds of Partners:

(1) Under the Civil Code:

(a) Capitalist – contributes money/property

(b) Industrial – contributes industry

(c) General – liability extends to personal assets

(d) Limited – liability up to contribution only

(e) Managing – manages the partnership

(f) Liquidating – responsible during dissolution

(g) By Estoppel – not really a partner

(h) Continuing – continues business after dissolution

(i) Surviving – remains after partner’s death

(j) Sub-partner – contracts with partners, Article 1804

(2) Other Classifications:

(a) Ostensible – active, known to the public

(b) Secret – active, unknown to the public

(c) Silent – inactive, known to the public

(d) Dormant – inactive, unknown to the public

(e) Original – member at time of organization

(f) Incoming – about to become a member

(g) Retiring – about to withdraw

Article 1777 A universal partnership may refer to all the present property or to all the profits. (1672)

Article 1778 A partnership of all present property is that in which the partners contribute all the property which
actually belongs to them to a common fund, with the intention of dividing the same among themselves, as
well as the profits which they may acquire therewith. (1673)

Article 1779 In a universal partnership of all present property, the property which belongs to each of the
partners at the time of the constitution of the partnership becomes the common property of all the partners,
as well as all the profits which they may acquire therewith. A stipulation for the common enjoyment of any
other profits may also be made; but the property which the partners may acquire subsequently by inheritance,
legacy or donation cannot be included in such stipulation, except the fruits thereof. (1674a)

Article 1780 A universal partnership of profits comprises all that the partners may acquire by their industry or
work during the existence of the partnership. Movable or immovable property which each of the partners may
possess at the time of the celebration of the contract shall continue to pertain exclusively to each, only the
usufruct passing to the partnership. (1675)

Article 1781 Articles of Universal Partnership, entered into without specification of its nature, only constitute a
universal partnership of profits (1676) If the articles of universal partnership are doubtful or unclear then the
presumption is that it is a universal partnership of all profits. - Because a universal partnership of all profits
require less obligations and is less onerous since the partners get to retain ownership over the property that
they contribute.

Article 1782 Persons who are prohibited from giving each other any donation or advantage cannot enter into a
universal partnership. (1677) A husband and wife cannot join a universal partnership. - They are not allowed
to donate to each other and a universal partnership essentially requires that the partners donate to each other.
article shall be null
and void. It shall not have any legal personality either.

Article 1783 A particular partnership has for its object determinate things, their use or fruits, or a specific
undertaking, or the exercise of a profession or vocation (1678) Defines what a particular partnership is
Particular partnerships are those that are: - Neither a universal partnership for all present property nor a
universal partnership for all profits

2nd MEETING

Art. 1784. A partnership begins from the moment of the execution of the contract, unless it is otherwise
stipulated. (1679)

GENERAL RULE: A partnership begins from the moment of the execution of the contract

EXCEPTION: The partners can agree on some other dates for the start of the partnership

Art. 1785. When a partnership for a fixed term or particular undertaking is continued after the termination of
such term or particular undertaking without any express agreement, the rights and duties of the partners
remain the same as they were at such termination, so far as is consistent with a partnership at will.

A continuation of the business by the partners or such of them as habitually acted therein during the term,
without any settlement or liquidation of the partnership affairs, is prima facie evidence of a continuation of the
partnership. (n)

PARTNERSHIP WITH FIXED TERM

IT IS ONE WHERE THE LIFE OR PERIOD OF EXISTENCE OF THE PARTNERSHIP HAS BEEN AGREED
UPON BY THE PARTNERS.

PARTNERSHIP FOR A PARTICULAR UNDERTAKING

IT IS ONE WHERE IT WILL EXIST UNTIL THE PURPOSE IS ACCOMPLISHED.
PARTNERSHIP AT WILL
A PARTNERSHIP THAT DOES NOT FIXED ITS TERM IS A PARTNERSHIP AT WILL.

Art. 1786. Every partner is a debtor of the partnership for whatever he may have promised to contribute
thereto.

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)

OBLIGATION OF EVERY PARTNER

1. The obligation to contribute what had been promised
2. The obligation to deliver the fruit of the thing thereof: and
3. The obligation to warrant

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 account of the partnership. (n)

MANNER OF APPRAISAL:
1. BY STIPULATION
2. IN THE ABSENCE OF STIPULATION, BY EXPERTS CHOSEN BY THE PARTNERS ACCORDING TO
CURRENT PRICES.

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)

CASES COVERED OF THE LIABILITY FOR DAMAGES AND INTEREST

1. Money promised by a partner is not given on time
2. Money of the partnership is converted the amount to partners’ own use.

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)

CAPITALIST PARTNER - Those who contribute money or property or both money and property to the
common fund
INDUSTRIAL PARTNER - Those who contribute only their industry or labor to the common fund.
CAPITALIST-INDUSTRIAL PARTNER - Those who contribute money or property and industry or both
money property and industry to the common fund.

REMEDIES OF THE CAPITAIST PARTNER AGAINST AN INDUSTRIAL PARTNER WHO ENGAGE IN

BUSINESS FOR HIMSELF
1. The capitalist partners may exclude the industrial partner from the partnership plus damages: or
2. The capitalist partner may avail themselves of the benefits which the industrial partner may have
obtained plus damages.

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 he obliged to sell his interest to the other partners. (n)

GENERAL RULE: capitalist partners are not bound to contribute additional capital.
EXCEPTIONS:
1. stipulation
2. in case of imminent loss of the business of the partnership to save the venture. If the capitalist
partner refuse to contribute additional capital they shall be oblige to sell their to the other capitalist
partners who are willing to contribute additional capital.

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 other debtor by
Article 1252, but only if the personal credit of the partner should be more onerous to him. (1684)

OBLIGATION OF A MANAGING PARTNER WHO COLLECTS DEBT

REQUISITES:
1. the existence of at least 2 debts( one where the managing partner is the creditor and the other
one where the partnership is the creditor);and
2. both sums are demandable

Art. 1793. A partner who has received, in whole or in part, his share of a partnership credit, 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 though he may have given receipt for his share only. (1685a)

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 partner's extraordinary
efforts in other activities of the partnership, unusual profits have been realized. (1686a)

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 contribute 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 risk of the 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)

RISK OF LOSS
1. SPECIFIC AND DETERMINATE THING WHICH ARE FUNGIBLE

The ownership here is transferred to the partnership therefore the partnership will bear the
losses

2. SPECIFIC AND DETERMINATE THING WHICH ARE NOT FUNGIBLE

What is contributed here is only the use of the object, hence, it is the partner who bears the
risk of loss because the partner did not transfer the ownership to the partnership.
3. FUNGIBLE THINGS
It is the partnership who bears the risk of the loss as there was transfer of the ownership
4. THINGS CONTRIBUTED TO BE SOLD
it is the partnership who bears the risk of loss as there was transfer of ownership
5. THINGS BROUGHT AND APPRAISED IN THE INVENTORY
it is the partnership who bears the risk of the loss as there was transfer of the ownership

Art. 1796. The partnership shall be responsible to every partner for the amounts he may have disbursed on
behalf of the partnership and for the corresponding interest, from the time the expense are made; it shall also
answer to each partner for the obligations he may have contracted in good faith in the interest of the
partnership business, and for risks in consequence of its management. (1688a)

Art. 1797. The losses and profits shall be distributed in conformity with the agreement. If only the share of
each partner in the profits has been agreed upon, the share of each in the losses shall be in the same
proportion.

In the absence of stipulation, the share of each partner in the profits and losses shall be in proportion to what
he may have contributed, but the industrial partner shall not be liable for the losses. As for the profits, the
industrial partner shall receive such share as may be just and equitable under the circumstances. If besides his
services he has contributed capital, he shall also receive a share in the profits in proportion to his capital.
(1689a)

RULES FOR THE DISTRIBUTION OF PROFIT AND LOSSES OF A PARTNERSHIP

1. DISTRIBUTION OF PROFITS
a. According to agreement
b. If there is no agreement
1. CAPITALIST PARTNER – in proportion to what he may have contributed to the common
fund.
2. INDUSTRIAL PARTNER – that is which is just and equitable under circumstances

2. DISTRIBUTION OF LOSSES
a. According to the agreement
b. If there’s no agreement
1. CAPITALIST PARTNER – In proportion to what he may have contributed to the
common fund
2. INDUSTRIAL PARTNER – Not liable for losses
3rd MEETING *SHEEN AND DEVIE*

4th MEETING

1810-1819

We have learned in our previous discussion the different property rights of a partner in the partnership
as stated in article 1810. ThEses includes his right in specific partnership property, his right in the interest in
the partnership and his right to participate in the management. As a general rule, a partner is a co-owner with
his partners in specific partnership property. Thus, he has equal rights with his partners to possess the
property but only for the partnership purposes. He may possess such property for other purposes provided
that the others expressly or impliedly gave their consent. Furthermore, a partner cannot also assign his right
to the property, nor can be attached/executed and is not subject for legal support. It is for this reason that
such property belongs to the partnership which is considered as a juridical person and also, for reservation
against partnership creditors. A partners interest in the partnership is his share of the profits and surplus
wherein it can be assigned, attached and can be subject for legal support. Article 1813 permits the conveyance
by a partner of his whole interest in the partnership as a collateral security for a loan. Generally, mere
conveyance does not necessarily dissolve the partnership neither make the assignee a partner to the
partnership. The rights of the assignee in the partnership is limited only to (1) get whatever profits the
assignor would have obtained,(2) to avail himself of the usual remedies provided by law in cases of fraud in
the management, to receive the assignor interest and demand an accounting if the partnership is dissolved.
He cannot interfere in the management of the partnership business nor to demand any information or account,
or to inspect any of the partnership books.
Separate or individual creditors of the partners can go to court and apply for a charging order or attach
the interest of the partner-debtor in the partnership for the satisfaction of his credit. Furthermore, when the
charging order is applied for or granted, the court may appoint a receiver of the partners share in the profits.
However, interest charged may be redeemed at any time before foreclosure. The article further stated that the
interest charged may be redeemed after foreclosure with (1) separate property by one or more of the partners
OR (2) with partnership property with the consent of all the partners whose interest are not charged or sold.
Article 1815 guides partners in selecting partnership names for their firms. As a general rule, every
partnership shall operate under a firm name and they may or may not include the name of one or more of the
partners. Furthermore, strangers who include their names in the firm are liable as partners because of
estoppel. As stated in 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. While industrial partners are exempted
from losses as between partners, he is not exempted from liability insofar as third persons are involved but he
may recover what he has paid from the capitalist partners. A stipulation exempting liability to third persons is
VOID.
Every partner is an agent of the partnership for the purpose of the business. Any acts of any partners
for apparently carrying on in the usual way the business of the partnership binds the partnership (mutual
agency principle) provided that he has authority and the person whom he was dealing with has no knowledge
of the fact that he has no such authority. An act of a partner which is not in the usual way of the business of
the partnership. One or more but less than all the partners have no authority to:
1.dispose of goodwill
2. to do any other act which could make it impossible to carry on the ordinary business of the partnership
4. confess a judgement
5. Enter into a compromise
6. Submit a arbitration
7. Renounce to claim.

Rules on Conveyance of Real Property

1. TITLE: Partnership
CONVEYANCE: Partnership
EFFECT: Title passes to third person even without express authority unless
 (a) the conveyance was not in the usual way of business
(b) if property was conveyed to a holder who has knowledge of the partners lack of authority.

2. TITLE: Partnership
CONVEYANCE: Partner's name
EFFECT: buyer does not become owner but only acquires EQUITABLE INTEREST provided:
(a) the partnership is engaged in real estate business
(b) the third person or buyer is in good faith or is innocent

3. TITLE: One or more but not all of the partners

CONVEYANCE: The partners in whose name the title stands
EFFECT: Title passes to the buyer/ third person provided:
(a) it is in the usual way of the business
(b) third person is innocent

4. TITLE: One or more or all of the partners or in a third person in trust for the partnership
CONVEYANCE: Partnership name or partners name
EFFECT: the sale only passes EQUITABLE INTEREST provided:
(a) it is in the usual way of business
(b) the purchaser is innocent

5. TITLE: Name of all Partners

CONVEYANCE: Name of all partners
EFFECT: Title passes to third person

5th Meeting:

Article 1820 - Admission by a partner

Admission definition:
A statement in which someone admits that something is true or that he or she has done something wrong.

An admission by any partner is evidence against the partnership if:

(1)The admission must concern partnership affairs
(2)The admission must be within the scope of his authority.

Note: An admission by a former partner, made after he has retired from the partnership, is not evidence
against the partnership.

Article 1821 - Notice to any partner in any matter relating to partnership

GENERAL RULE: Notice to a partner is notice to the partnership.

EXCEPT: In the case of fraud on the partnership, committed by or with the consent of that partner.

3 Types of Knowledge of a partner is considered knowledge of the partnership:

(1) Knowledge of the partner acting in the particular matter acquired while a partner
(2) Knowledge of the partner acting in the particular matter then present to his mind
(3) Knowledge of any partner who reasonably could and should have communicated it to the acting partner.

Example:
A, B, and C are partners in ABC partnership. Later, X sent a demand letter to ABC partnership which was
received by partner B. In this case, when B received the demand letter, by operation of law, ABC partnership
also received the deman letter.
Article 1822 - 1824 - Liability of partnership as to third persons

Article 1822 - By wrongful act or omission of a partner

By incurring such acts, the partnership is held liable therefore to the same extent as the partner so acting or
omitting the act.

Article 1823 - Partnership is bound to make good the loss:

(1) Where one partner acting within the scope of his apparent authority receives money or property of a third
person and misapplies it;
(2) When the partnership in the course of its business receives money or property of a third person and the
same is misapplied by any partner while it is in the custody of the partnership.

Article 1824 - All partners are liable solitarily with the partnership foe everything chargeable to the partnership
under the Art. 1822 and 1823.

A third person can hold the partners solidary liable for the whole obligation if the case of the third person falls
under Articles 1822 or 1823.

Article 1825 - Partnership by Estoppel

(1) Partnership by Estoppel - when all the partners consented to the misrepresentation of a third person.
(2) Partners by Estoppel - not all partners consented to such.

Note: Partnership by Estoppel does not apply when the third person is not deceived. Thus, it is the third
person who has the burden of proving the existence of a partner by Estoppel or partnership by Estoppel.

When a partnership liability results:

(1) He is liable as though he were an actual member of the partnership.
(2) When no partnership liability results, he is liable pro rata with the other persons if any liability will incur to
the contract he consented.

Article 1826 - Liability of newly admitted partner to an existing partnership

The newly admitted partner is liable to all the debts of the partnership as though he were a partner when
those debts have incurred.

Exception:
The liability shall be satisfied out of partnership property, unless there is a stipulation to the contrary.

The creditor can only go against the capital contribution of the newly admitted partner.

Article 1827 - Preference of the partnership property as to creditors

The partnership creditor is preferred to those of each partner as regards to the partnership property.

The remedy for the private creditors of each partners:

They may ask for the attachment and public sale of the share of the latter in the partnership assets.
6th MEETING:

Article 1828 talks about the dissolution. We've differentiated dissolution, winding up and termination.
Dissolution is the change in the relation of the partners caused by any partner ceasing to be associated in the
carrying on of the business.
Winding up is the process of settling the business or partnership affairs after dissolution.
Termination is the end of the partnership life where all the partnership affairs are completely wound up and
finally settled.

Article 1829 talks about, on dissolution of the partnership is not terminated. It means that dissolution is not to
be understood as the extinguishment of the partnership because it continues until winding up of the
partnership affairs is completed.
Article 30 talks about the caused of dissolution.
1. Without violation of the agreement between the partners. Then dissolution is effected of this:
*By the termination of the definite or particular undertaking
* By the express will of any partner who must act in good faith
* By the express will of all the partners
* By the expulsion of any partner
2. In contravention of the agreement between the partners, where the circumstances do not permit a
dissolution under other provision of this article, by the express will of any partner at any time.
3. By any event which makes it unlawful for the business of the partnership to be carried on.
4. When a specific thing, which a partner had promised to contribute to the partnership, perishes before the
delivery.
But the partnership shall not be dissolve by the loss of the thing when it occurs after the partnership has
acquired the ownership.
5. By the death of any partner
6. By the insolvency of any partner or the partnership
7. By the civil interdiction of any partner
8. By decree of court under the following article 1700a and 1701a

We've also discussed the Article 1831 which talks about when the court shall decree a dissolution.
*So on application by a partner:
1. When a partner has been declared insane.
2. When a partner becomes incapable of performing his part in the partnership contract.
3. When a partner is guilty of such misconduct.
4. When a partner willfully or persistently commits a breach of the partnership agreement.
5. When the business of the partnership is only carried on at a loss.
6. And other circumstances.
*On application by a purchaser of a partner's interest:
1. After the termination of the specific term or particular undertaking.
2. At the time if the partnership was a partnership at will when the interest was assigned or when the
charging order was issued.
Article 1832 also talks about the effect of dissolution on authority of partner.
As a general rule: Upon dissolution it extinguishes the authority of the other partners to bind the partner to
the partnership, except :
1. If the acts is to winding up the partnership business.
2. And in completing unfinished transaction of the business.
Article 1833 talks about the dissolution is caused by the act, death or insolvency of a partner. Where a
partners enters into a new contract with the third person after dissolution, the new contract will bind the
partners and each of them is liable for his share of any liability created by the acting partner as if the
partnership had not been dissolved.
Exception of this is when the cause of dissolution is the act, death or insolvency of a partner and the acting
partner had knowledge from this act, death or insolvency. And so the other partners could not be held liable.
Article 1834 talks about the power of the partner who binds the partnership to the third person. This compose
of three paragraph which talks about :
1st. A partner can bind the partnership after dissolution.
2nd. The liability of a partner under the first paragraph shall be satisfied out of partnership assets alone .
3rd. The partnership is in no case bound by any act of a partner after dissolution.

The discussion only focus on the 3rd paragraph of this article. 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
2. Where the partner has become insolvent
3. Where the partner had no authority to wind up up partnership affairs.
Exception of this is when the third person has no knowledge or innocent of such defect to the authority.
Lastly, the article 1835 talks about the dissolution of the partnership does not of itself discharge the existing
liability of any partner.

Since the liability of the partner is unlimited where the partner is liable up to his personal asset even if the
authority has been dissolve, it will not extinguish his liability until such time the partnership has been
terminated. Therefore, consent is really necessary for the extinguishment because in order for the partner to
be discharge it must been agreed and accepted by all of the partners.

And also in terms of the personal asset of the partners, the preference must be the personal creditors of the
partner.