Q: In a firm name, can we use another name?

Q: Can the partners agree that one of them

A: Yes. e.g. sunshine co. ltd will not be liable at all?
but not in law partnerships, or professional
partnerships. you are mandated to use surnames. A: Yes. Unlike losses and profits, the partners
u can use name of deceased partner provided cannot exclude any of their partners from
there is indication that the partner is already sharing in the profits and losses, except for
deceased. the industrial partner. But insofar as liability
is concerned, in art 1817, the liabilities of the
when we refer to losses, the losses are computed partners arise after the excussion, if there is
on a yearly basis. so there are revenues, gross an agreement among the partners saying one
revenues derived by a firm in a year. of them will not be made liable, then that
if the expenses are more than the revenues, then agreement among them is valid but not
there will be losses. that's the concept of losses. insofar as third person is concerned.
gross income as against expenses = profits or
losses When you are given a problem on losses, apply
the rule on losses. When you are given a
when we are talking of liability, when the problem on liability, apply the rule on liability.
partnership entered into a contract for contract of --
construction. and the contract price is P5M then ART. 1818
the partnership has a liability to pay its liability
to a contract. then that is a liability on the part of 1. A partner is an agent of the partnership
partnership, but they're not losses. insofar as carrying the business of the
partnership. Those activities in the normal
when we talk of losses, normally, as a GR the course of the partnership. A partner is an agent
industrial partner is not liable for losses. XPN of the partnership.
when there is a stipulation among the partners
that the industrial partner is also liable for losses. 2. The act of every partner in the partnership
binds the partnership itself. The partnership
In liability, the extent of liability of the partners must abide by the contract entered into by the
including the industrial partners and the partner provided that it is done in carrying out
capitalist partner (general partner). Art 1816 the usual business of the partnership.
general partners.
Their liability is subsidiary. They are entitled to Q: What if the partner acted without any
the benefit of excussion before their personal authority?
assets can be taken. Here, their liability is pro
rata A partner who has not been appointed as
managing partner has no authority to transact or
Q: What is meant when you say pro rata? enter into contracts which are not in the usual
A: It means that it shall be divided equally course or business of the partnership. Since he
among the partners. The liability of the partners has no authority, it does not bind the
is subsidiary (they have the benefit of excussion, partnership.
and ultimately after exhausting the assets of the
partnership, the liability of the partners is pro Q: When will it be binding on the partnership
rata.) if that partner has no authority?
A: If the partners had the knowledge and they
-- did not have any objection on the act of that
insofar as the third person is considered, the partner.
liability of the partners is pro rata (equal or joint)
If the partner has no authority but the act that is
-- being performed is still in the normal course of
ART. 1817 the business of the partnership.
 A: No, unless in the case of corporation. You
In a trading business, there are three partners, only need three votes to sell the corporation.
one is appointed as a managing partner, and the You need the consent of the shareholders.
appointing is after, not in the articles of In partnership, when you're talking of acts of
partnership, but after the constitution of the strict dominion, these require unanimity, all the
articles of partnership. partners must agree or give their consent.

And it was not the managing partner that

transacted the retail in the buying or selling. --- ART. 1819
Said act is not in the normal business of
partnership. Thus, that partner who has dealt If the title of the real property is in the name of
with another person the said transaction with the partnership, and one of the partner acts for
the latter having no knowledge that said and behalf of the partnership in selling that
partner has no authority, does not bind the property. In that case, the title is conveyed. If
partnership. said partner has authority to do that, the buyer
will acquire naked title. If the partner was not
That partner who has no authority cannot bind authorized, the partners can recover it.
the partnership, even to third persons who are
innocent and who does not know about his lack If the title of the property is in the name of the
or absence of authority. partnership and the partner sells it in his own
name as partner of ABC Partnership. If he
A partner that has no authority who performs authorized to sell that but acted in his own name,
acts which are in the usual way of their business, then only equitable interest will be conveyed.
binds the partnership insofar as innocent persons The transferee or buyer will not be allowed to
are concerned. transfer the property in his own name. Only the
If he has no autority, and the transaction is equitable interest is conveyed. (Means
not in the normal course of business of the practicably the same except the naked title)
partnership, then that transaction is not
binding on the partnership even if the third If the title of the real property is in the name of
person is innocent. the partner, the partner in whose name is
registered may covney the title, the partnership
Q: What are those instances when all could recover it if the buyer acted in bad faith.
partners must give their consent to bind the
partnership? Q: Can the partners recover title over that
A: Art. 1818 enumeration property?
A: If he is a buyer in good faith, no more. If the
Q: Why must the partners agree? partner who sold that property in his own name
A: Because it is the property of the partnership and that the title is in his own name, and the
that is involved. Not only acts of administration. buyer knows it’s a partnership property, then the
These are acts of strict dominion. They are very partners could recover it. Because he was not a
burdensome for the partnership. These are not in buyer in good faith.
the ordinary course of the business of the
partnership. Q: If he the partner who sold it has no
authority and sells it to a third person, can
E.g. the law firm of Quirroz, Cabalfin & the partnership still recover it?
Embing. They have office premises. They want A: Yes, because it was a reconveyance of the
to sell their assets. They want to transfer their partnership not in the regular course of business
assets where they want to rent. Cant they sell of the partnership.
that?
Q: partnership funds were used in purchasing
real property. But the title of that real property is
in the name of all the partners. And conveyance Isuzu Manila claim that “your partner has
is made by all of them, then the naked title will acquired knowledge of that, hence the 20%
be conveyed to the buyer. The buyer could discount.”
register the title of the property in his own name. So knowledge of a partner acting on a
particular matter which he acquired while he
-- is a partner is considered as knowledge or
ART. 1820 notice to the partnership.

Admission after dissolution but concerns Knowledge which he was able to acquire
winding of partersnhip affairs, admissible. prior to him becoming a partner is notice to
But admission after dissolution but does not the partnership provided that that knowledge
concern winding of partnership affairs, not is still present on his mind. This is a matter of
admissible. evidence. This must be proven that such
knowledge is still present on such partner’s
* Admission must be about winding up of life.
partnership affairs to be admissible.
Knowledge of any other partner is considered
-- as notice to the partnership if that partner
ART. 1821 could reasonably communicate it to the
partner acting on that particular partner.
Q: When is that notice and when is that
knowledge binding to the partnership? --

A: It is binding when it is relating to any matter ARTS. 1822 & 1823

relating to the partnership. This is because of the
fiduciary relationship of the partnership. Solidary liability of a partner:
Q: What are these limited instance wherein the
Notice of any matter relating to partnership liability of the partners is solidary?
affairs is notice to the partnership. A: Torts.

Q: When a partner or a partner to be comes

across with a matter pertaining to a
partnership, what is the rule?

A: Knowledge of a partner acting on a partner

acquired while a partner is considered a notice to
the partnership. The qualifying word is the
partner must be acting on a particular
matter.

e.g. The partnership wants to buy a truck. One of

the partners goes to Isuzu and he learned that
there was a sale of trucks at Isuzu branch in
Manila. There is a 20% sale. But there is a catch
in the 20% sale. He knows that there is a sale of
a specific product there (Isuzu truck) because
there is a defect. Though to his mind, that isn’t
really material, and the partner is aware of such
defect. Still, the partner bought the truck from
Isuzu Manila. When it was delivered to the
partnership, the other partners objected. Can