- Statute
- Civil Code
- Article
- Art. 1816
- Topic
- Obligations of the Partners
- Status
- In force
- Book
- BOOK IV Obligations and Contracts
- Title
- TITLE IX PARTNERSHIP
- Chapter
- CHAPTER 2 Obligations of the Partners
- Year
- 1949
- Cited by
- Multiple Supreme Court decisions
The provision
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)
Intellegal Wiki · In plain terms
For debts the partnership incurs through an authorized partner acting in the firm's name, all partners—including those who contributed only work (industrial partners)—are liable, but only after the partnership's own assets are used up first, and then each pays a pro rata (proportional) share out of personal property. A partner may separately promise to personally perform a partnership contract.
An editorially maintained plain-language explanation of this provision — not legal advice.
Cases applying this article
- Raymundo Meris Morales v. Nemesio Fontanos G.R. No. 43299
- Michael C. Guy v. Atty. Glenn C. Gacott G.R. No. 206147
- Remigia Hernandez v. Leoncio Barcelon G.R. No. 7323