The document discusses several articles from the Law on Partnership in the Philippines.
Article 1788 states that a partner who fails to contribute money as promised becomes a debtor responsible for interest and damages from when they should have complied. Article 1789 prohibits an industrial partner from engaging in other businesses unless permitted by the partnership agreement. Article 1792 addresses how payments should be applied if a managing partner collects money from a debtor who owes both the partnership and the partner. Unless otherwise agreed, partners must contribute equal shares to the partnership's capital according to Article 1790.
The document discusses several articles from the Law on Partnership in the Philippines.
Article 1788 states that a partner who fails to contribute money as promised becomes a debtor responsible for interest and damages from when they should have complied. Article 1789 prohibits an industrial partner from engaging in other businesses unless permitted by the partnership agreement. Article 1792 addresses how payments should be applied if a managing partner collects money from a debtor who owes both the partnership and the partner. Unless otherwise agreed, partners must contribute equal shares to the partnership's capital according to Article 1790.
The document discusses several articles from the Law on Partnership in the Philippines.
Article 1788 states that a partner who fails to contribute money as promised becomes a debtor responsible for interest and damages from when they should have complied. Article 1789 prohibits an industrial partner from engaging in other businesses unless permitted by the partnership agreement. Article 1792 addresses how payments should be applied if a managing partner collects money from a debtor who owes both the partnership and the partner. Unless otherwise agreed, partners must contribute equal shares to the partnership's capital according to Article 1790.
Law on Partnership (Article 1784-1827) and in the same manner as the vendor is bound
with respect to the vendee. He shall also be liable
Art. 1784. A partnership begins from the moment of for the fruits thereof from the time they should have the execution of the contract, unless it is otherwise been delivered, without the need of any demand. stipulated. (1679) Explanation: The article explains that failure of a Article 1679 - If nothing has been stipulated partner to deliver the promised specific and concerning the place and the time for the payment determinate contribution in a partnership of the lease, the provisions or article 1251 shall be automatically makes that partner a debtor even observed as regards the place; and with respect to without the demand of the other partner. If we can the time, the custom of the place shall be followed. still remember, during ObliCon, there is a need to (1574) demand so that debtor is bound to his/her Article 1251. Payment shall be made in the place obligation but it this case, the partner who failed to designated in the obligation. deliver the promised contribution makes the partner automatically a debtor and is bound to his/her Article 1574. There is no warranty against hidden obligation and liability in partnership. But this only defects of animals sold at fairs or at public auctions, apply to specific and determinate things. or of live stock sold as condemned. (1493a) Failure of compliance doesn’t mean recession, Explanation: Partnership starts at the very dissolution/cancelation of partnership. It is a call for moment of the execution of contract, unless there is action on specific performance as to the damages a stipulation/condition such as an agreement on the and liability made. start of date, requirements or terms. Art. 1787. When the capital or part thereof which a Art. 1785. When a contract for a fixed term or partner is bound to contribute consists of goods, particular undertaking is continued after the their appraisal must be made in the manner termination of such term or particular undertaking prescribed in the contract of partnership, and in the without any express agreement, the rights and absence of stipulation, it shall be made by experts duties of the partners remains the same as they chosen by the partners, and according to current were at such termination, so far as is consistent prices, the subsequent changes thereof being for with a partnership at will. the account of the partnership. A continuation of the business by the partners or Explanation: Article 1787 explains that the such of them as habitually acted therein during the appreciation/deprecation of Capital or a part of it term, without any settlement or liquidation of the depends on the prescribed contracts of the partnership affairs, is prima facie evidence of a partnership as to the extent of its subject matter continuation of the partnership. under article 1776. The appreciation/depreciation of Partnership at will is one in which no term of the capital or a part of the capital such as (land, existence has been fixed and which may be machinery, equipment) in a Universal Partnership terminated at the will of any partners of All present property the gain and loss of the capital/part of the capital is accounted to the Explanation: Paragraph 1 explains Partnership partnership since the extent of the partnership with fixed terms is a partnership wherein there is a extends to the all the properties they have term of existence/duration agreed upon meaning contributed. But in a Universal Partnership of Profit, that once the fixed term is finished, the partnership the appreciation/depreciation of the capital/part of therefore is now dissolved/extinguished but in any the capital is bound to account by the partner and case, the partners continued the NOT by the partnership/business since the extent partnership/business, the fixed term or particular of the subject matter is only in to the gains/usufruct, undertaking is now deemed extinguished and so in any case, the appraisal of the capital/part of partnership at will arises. In partnership at will, the the capital is being account to the partner solely obligation of the partners still remains the same so far that it is consistent with partnership at will Art. 1788. A partner who has undertaken to meaning it can be dissolved by will of either the contribute a sum of money and fails to do so partners becomes a debtor for the interest and damages from the time he should have complied with his ***Once there is no indication of fixed term/duration obligation. of existence/operations it is considered as partnership at will The same rule applies to any amount he may have taken from the partnership coffers, and his liability Art. 1786. Every partner is a debtor of the shall begin from the time he converted the amount partnership for whatever he may have promised to to its own use contribute thereto. He shall also be bound for warranty in case of eviction with regard to specific Explanation: Article 1788 explains that a partner’s and determinate things which he may have failure to contribute the pledged sum of money contributed to the partnership, in the same cases becomes a debtor to the sworn contribution including the damages from the time of the supposed execution of the obligation. In the case The provisions of this article are understood to be that a partner used the money of the without prejudice to the right granted to the debtor partnership/business for his/her personal use by Art. 1252, but only if the personal credit of the he/she is a debtor thereof. partner should be more onerous to him. Art. 1789. An industrial partner cannot engage in Requisites: any business for himself, UNLESS the partnership 1. Two existing debts expressly permits him to do so; and if he should do so, the capitalist partners may either exclude him 2. Both debts must be demandable from the firm or avail themselves of the benefits which he may have obtained in violation of this 3. The one who collected the debt is a partner who provision, with a right to damages in either case. is authorized to manage and is actually managing the partnership. Explanation: Article 1789 explains that an industrial partner cannot engage in other business Article 1252. He who has various debts of the same for the his/her own benefit unless the partnership kind in favor of one and the same creditor, may allows the industrial partner to do so. Industrial declare at the time of making the payment, to which partner engage in other business for his/her own of them the same must be applied. Unless the benefit can be excluded in the partnership or the parties so stipulate, or when the application of capitalist may avail themselves of the benefits that payment is made by the party for whose benefit the the indus. Partner obtain including damages in the term has been constituted, application shall not be case. This is to prevent any conflict of interest made as to debts which are not yet due. between the industrial and the partnership, and to If the debtor accepts from the creditor a receipt in ensure faithful compliance by said partner with his which an application of the payment is made, the prestation. On the side note, the Industrial are not former cannot complain of the same, unless there allowed to engage in any business even if he/she is a cause for invalidating the contract. (1172a) renders two different service to each. Capitalist are prohibited to engage in similar business only. Explanation: Article 1792 explains that in any case a managing partner collect a demandable sum to a Art. 1790. Unless there is a stipulation to the debtor who has a demandable sum to both the contrary, the partners shall contribute equal shares partnership and to the managing partner, the to the capital of the partnership. collected demandable sum will be given to the Explanation: Since there is no agreement or partnership and the partner proportionately even if stipulation partners should contribute their shares the debtor only paid for the account of the equally to the capital. managing partner and not yet the partnership. But in any case, that the debtor credit his payment to Art. 1791. If there is no agreement to the contrary, the partnership, the amount should be fully in case of an imminent loss of the business of the received by the partnership alone. partnership, any partner who refuses to contribute an additional share to the capital, except an This only applies when, industrial partner, to save the venture, shall be 1. Two existing debts obliged to sell his interest to the other partners. 2. Both debts must be demandable Explanation: In case of imminent loss of the partnership between the capitalist and industrial, 3. The one who collected the debt is a partner who the industrial partner is not required to contribute is authorized to manage and is actually managing additional share to the capital since their industry is the partnership. their 100% share in the partnership. But capitalist Paragraph 2 states that the demandable sum in has a natural obligation to contribute additional whole or in part can be credited to the partner if and share to save the venture unless otherwise the only the demandable sum of the partner is onerous capitalist is insolvent or there is a stipulation. In any (larger sum for example/or larger interest) case that the solvent Capitalist refuses to contribute, then they may sell his/her interest to Art. 1793. A partner who has received, in whole or other willing partners. in part, his share of a partnership credit, when the other partners have not collected theirs, shall be Art. 1792. If a partner authorized to manage obliged, if the debtor should thereafter become collects a demandable sum, which was owed to insolvent, to bring to the partnership capital what he him in his own name, from a person who owned the received even though he may have given receipt partnership another sum also demandable, the sum for his share only. thus collected shall be applied to the two credits in proportion to their amounts, even though he may Explanation: Article 1793 state that in case the have given a receipt for his own credit only; but debtor to both the partnership and partners should he have given it for the account of the becomes insolvent and one of the partners already partnership credit, the amount shall be fully applied received his/her share from a partnership credit and to the latter. the other partner has still a demandable sum to the debtor. The partner who already received in whole or in part of his/her share, is obliged to bring back to partnership what he received even if the share is for him/her only. This is to protect the other partners from bad debt/loss in partnership that they should all bear equally 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. Explanation: 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 risk 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.