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Article 1792 To 1997

The document discusses several articles related to partnership law in the Philippines. It addresses rules for: [1] applying payments made by debtors who owe both partnership and individual debts; [2] partners' obligations if a debtor becomes insolvent after the partner receives their share of a partnership credit; and [3] distribution of profits and losses according to partnership agreements or capital contributions.

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Sukh Gill
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2K views

Article 1792 To 1997

The document discusses several articles related to partnership law in the Philippines. It addresses rules for: [1] applying payments made by debtors who owe both partnership and individual debts; [2] partners' obligations if a debtor becomes insolvent after the partner receives their share of a partnership credit; and [3] distribution of profits and losses according to partnership agreements or capital contributions.

Uploaded by

Sukh Gill
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ARTICLE 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.

Rules for application of payment of partnership debtors

ARTICLE 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)

Obligation or partners who receive share of partnership credit when debtor becomes insolvent

ARTICLE 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)

Partners are liable for damages if at fault; no off-setting rule

ARTICLE 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 of things contributed res peruit domino meaning The thing is lost to the owner. This phrase is used to express that when a thing is lost or destroyed, it is lost to the person who was the owner of it at the time. For example, an article is sold; if the seller have perfected the title of the buyer so that it is his, and it be destroyed, it is the buyer's loss; but if, on the contrary, something remains to be done before the title becomes vested in the buyer, then the loss falls on the seller

ARTICLE 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)

Obligation of partnership to its partners as its agent; to refund; to answer for obligations contracted in good faith; to answer for risks by reason of management

ARTICLE 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 on distribution of loss and profits PROFITS A. According to agreement B. If there is no agreement: - in proportion to capital contribution - give reasonable share (quantum meruit/merit) of industrial partner; then divide what is reasonably due to remaining partners LOSSES

A. According to agreement B. If there is no agreement: - The same as profit-sharing scheme except for industrialist - in proportion to capital contribution

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