CHAPTER 2: OBLIGATIONS OF THE PARTNERS

SECTION 3. – OBLIGATIONS OF THE PARTNERS WITH REGARD TO THIRD

PERSON
Article 1815 – Right and Duty to operate under a firm name
A firm name is necessary to distinguish the partnership which has a distinct and separate judicial
personality from the individuals composing the partnership and from other partnerships, and
thus, helps to facilitate business transactions by the partnership.
- Dapat ang isang partnership ay may partnership name.
- In Article 1768, partnership has juridical personality separate and distinct from the
partners which comprise it.
- Dahil may separate personality ang partnership with the person who comprise it dapat
may paraan tayo to distinguish yung partner from the partnership. Kailangan din natin
madistinguish yung partnership from other partnership, partnership from corporation and
also partnership from sole proprietorship.
1816 & 1817 – Liability to 3rd Persons
1816 – Duty to be liable with their exclusive property
Each partner has a liability up to their exclusive property (General Partner)
A third person can sue the firm and the partners, including the industrial partner. Of course, the
partners will be personally liable, jointly or pro rata, only after the assets of the partnership have
been exhausted. Even if the industrial partner would have to pay, but of course he can recover
later on what he has paid from the capitalist partners, unless there is a contrary agreement.
- All the partners including the industrial ones are personally liable to third persons at yung
liability ay jointly or pro rata.
- Ang pro rata na sinasabi sa law sa ARTICLE 1816 ay JOINT AND EQUAL
- Example yung liability ng partnership sa kanyang creditor/3rd person ay 10,000 tapos 4
silang partner therefore each partner will have to pay 2,500 each since joint and equal ang
pagbabayad ng liability sa third person.
- It doesn’t matter if magkakaiba sila contribution or one of them is an industrial partner
basta pagdating sa third person ang liability is JOINT AND EQUAL.
- An industrial partner is excluded/exempted from losses in case of after payment of
liability, allowed sya i-recover from the capitalist partner whatever he has paid as liability
to the 3rd persons. BUT nde sya pwede maexclude sa pagbayad ng liability sa third
persons dahil nga JOINT AND EQUAL.
1817 – Stipulations against Liability
A stipulation among the partners contrary to the pro rata and subsidiary liability expressly
imposed by Art. 1816 is void and of no effect insofar as it affects the rights of 3rd persons. It is
valid and enforceable only as among partners.
- The parties can agree that one or more of them can be exempted from the liability. Pwede
mag-stipulate na exempted ang isang partner (this applies to both capitalist and industrial)
sa liability BUT THE RULE IS AS TO 3RD PERSONS, VOID ANG STIPULATION.
- Among the partners, valid and enforceable ang stipulation pero kapag kasama na dito ang
3rd persons void ito.
- For example, kapag siningil ng creditor/3rd person si A,B,C,D (partners) kailangan nila
magbayad ng JOINT AND EQUAL SHARES SA LIABILITY pero pag sila sila nalang
at may stipulation sila na exempted for example si A therefore kailangan i-reimburse nila
B,C,D si A.
1818 – Duty and right of a partner to act as agent
A partnership is a contract of mutual agency, each partner acting as principal in his own behalf,
and as an agent for his co-partners or for the firm.
- A partner acts as an agent of the partnership pwede siya pumasok sa mga kontrata with
3rd persons kasi hindi naman makakapasok ang partnership sa contracts with 3rd persons
dahil isa siyang juridical personality so kailangan niya magrrepresent sakanya. Sino to?
Yung mga natural persons which is yung mga partners so each partner is an agent for the
partnership.
Question: pagka pumasok ba ang isang partner sa isang transaction with a third person. Is it
binding on the partnership, liable ba ang partnership para sa transactions na pinasukan ng isang
partner?
- Liable ang partnership if the partner acting is EXPRESSLY/IMPLIEDLY
AUTHORIZED.
INSTANCES OF IMPLIED AUTHORIZATION
1. When the other partners do not object, although they have knowledge of the act.
INSTANCES OF IMPLIED
AUTHORIZATION
*In case of implied authorization, the act is
binding if:
1. When the other partners do not object,
although they have knowledge of the act.
Example:
Si A bumili ng videoke machine, linagay sa
establishment, nakita ng ibang partners and
they do not object.
*If intended for partnership use and also
ginamit din ng parnetship, this is binding on
the partnership. (Alam na nila B and C,
nakita na nila, they do not object even if this
ite hass nothing to do with the partnership
business) (A is impliedly authorized
because the partners did not object to his
transaction)
*Partnership has to pay to seller of videoke
machine who is a third person.
2. When the act is for “apparently carrying
on in the usual way the business of the
partnership.” This is binding on the firm
even if the partner was not really authorized,
provided that the third party is in good faith.
*An act which is usual to the business.
In the previous example, ano ang usual in
the business? Pagbili ng videoke or pagbili
ng water bottle?
Answer: Pagbili ng water bottle is usual in
the partnership which is engaged in the
business of purifying water.
*If usual ang transaction, it is binding in the
partnership.
What if hindi naman talaga authorized si A
to buy water bottles then bumili siya, is it
binding in the partnership?
Answer: Yes it is, even if it’s not authorized
because it is usual in the business and third
party is in good faith.
*The seller of the water bottles must be
unaware that A is actually unauthorized by
the partnership.
B. When the acts in behalf and in the name
of the partnership in the ordinary course of
business. (almost the same as no. 2 in A)
*An act is usual = it is binding on
partnership.
WHEN THE ACT OF THE PARTNER
DOES NOT BIND THE PARTNERSHIP
(Article 1818)
- These transactions do not bind the
partnership
A. When, although for “apparently on in the
usual way the business of the partnership”,
still the partner has in fact no authority and
the third knows that the partner has no
authority. This is in order to penalize a client
who is in bad faith.
Example:
Bumili si A ng water bottles (transaction is
usual in the business), but he is actually not
authorized and si seller (third party) alam
niya na hindi authorized si A.
In this case, the act is not binding on the
partnership.
Act is usual = act is unauthorized = third
person is bad faith = NOT BINDING
B. When the act is NOT for “apparently
carrying on in the usual way the business of
the partnership” and the partner has no
authority. Whether or not the party knows of
the lack of authority is not important. As
long as there was no authority, the firm is
not bound.
Act is not usual = Act is not authorized =
NOT BINDING AND THIRD PARTY’S
AUTHORIZATION IS IMMATERIAL
ACTS NOT FOR “APPRENTLY
CARRYING ON IN THE USUAL
BUSINESS OF THE PARTNERSHIP”
(GO-CESAR) (ARTICLE 1818)
1. Assign the partnership property in trust
for creditors or on the assignee’s promise to
pay the debts of the partnership.
*Hindi usual sa business ang i-assign ang
property kasi binibigay mo na sa mga
creditors.
*Act not usual = NOT BINDING until
there is unanimous consent of all of the
partners.
2. Dispose of the good-will of the business.
*One of the partners, ibebenta niya pangalan
ng business (not a usual method of carrying
on the business)
3. Do any other act which would make it
impossible to carry on the ordinary
business of partnership.
Example:
A partner sells the purifying machine so it
would make it impossible to carry on in
ordinary business of the partnership. (Wala
na gagamitin to purify a water)
Act not usual = NOT BINDING until all the
partners gave consent in the partnership.
4. Confess a judgement.
*Admission of liability = NOT BINDING
until there is unanimous consent of all of
the partners.
5. Enter into a compromise concerning a
partnership claim or liability.
6. Submit a partnership claim or liability to
arbitration.
Arbitration – “Arbiter” (parang judge) =
decide on the merits of the claims of the
partnership
- If liable partnership or kung pwede
makuha yung claim, siya
magd’decide
7. Renounce a claim of the partnership.
*Renunciation – winiwave ng partnership
yung kanyang right dun sa claim na yon
CONVEYANCE OF REAL PROPERTY
(1819)
*Read SEC Memorandum Circular No.
13 Series of 2019 (Discussion about
choosing a name for a partnership and
corporations)
Real Property – immovable properties
- Land, house, condominium,
buildings, and etc.
- These real properties belong to the
partnership
Conveyance – sold to the buyer
RULES IN CONVEYANCE OF REAL
PROPERTY BY A PARTNER
(ARTICLE 1819)

*Is the sale of the partner to the buyer, a

valid sale? = main question in Article 1819

A. Title is in the partnership name and

conveyed by a partner in the name of the
partnership (SELLING ON BEHALF OF
THE PARTNERSHIP)

GENERAL RULE: Title passes to the third

person to whom the property was conveyed
but the partnership may recover the property
in the following instances mentioned below.
 CHAPTER 2 OBLIGATIONS OF THE PARTNERS
SECTION 3. – OBLIGATIONS OF THE PARTNERS WITH REGARD TO THIRD
PERSONS
Start 20:51
CONVEYANCE OF REAL PROPERTY RULES IN CONVEYANCE OF REAL PROPERTY
BY A PARTNER (Article 1819)
A. TITLE IS IN THE PARTNERSHIP NAME AND CONVEYED BY A PARTNER IN
THE NAME OF THE PARTNERSHIP

– GENERAL RULE: Title passes to the third person to whom the property was conveyed
but the partnership may recover the property in the following instances mentioned below.

– EXCEPTIONS: When partnership may recover the property:

1. When such act is not in the ordinary business of the partnership unless all the partners
consent.
- EX real estate partnership, ordinary course ng business niyo to sell land, but if
your parnersghip is water purifying station? Obviously hindi ordinary sa kanila
yung pagbebenta ng lupa. The partnership here can recover.

2. When the buyer has knowledge of the fact that the partner-seller had no authority to
sell even though it is in the usual course of business
- The third person(buyer) is in bad faith
- This talks about your real estate partnership, it is usual to sell land. If the buyer is
aware na hindi dapat benta yung lupa, the partnership can recover.
- EX partnership ABC maraming lupa na binibenta, sabi ng partners kay C na I sell
yung mga lupo except yung nasa san vicente, tho usual na course yung pagbenta
ng lupa and sa dami ng pwedeng ibenta na lupa, yung binenta ni C ay yung lupa
na hindi allowed. But C has no authority to sell and the buyer is also aware
nabawal ibenta yung lupa, the partnership can recover yung lupa.

B. TITLE IS IN THE PARTNERSHIP NAME AND CONVEYED BY A PARTNER IN

HIS OWN NAME
Here una palang may defect na dahil ang nagbebenta ay yung hindi owner.

– GENERAL RULE: Equitable title is transferred to the buyer provided the partner is
acting within the scope of his authority and such transfer is in the usual course of
business.

According to law, NO legal title, but equitable title is transferred

- Equitable title – imperfect and unenforceable right. But it is recognized under the
principles of equality and It is convertible to legal right
 Convertible to legal right – (Article 1357) If the sale is already enforceable, may simple
defect lang, the buyer can compel the seller to execute yung proper document or form so
that the sale will be registrable
The same thing applies here, in case of equitable title the buyer can compel the partner to
execute yung proper document or form so that the equitable title will ripen into legal title.
EX title is in the name of the partnership but it is conveyed by the partner in his own
name. Here the buyer can ask all of the partners to execute yung tamang deed of sale so
that kanyang equitable title will ripen into a legal one. Sa panaglawang deed of sale, the
partnership is already represented property.
Magkakaroon lang din ng equitable titile if the transfer is authorized and usual in the
course of the business of the partnership.

– EXCEPTIONS: When the buyer is not entitled to equitable interest:

1. If the partnership is not engaged in buying and selling of land or the sale is not in the
usual course of business.

If yung pagbenta nung lupa ng water refilling station natin, hindi magkakaroon ng
equitabl interest yung buyer.

2. If the buyer had knowledge of the partner-seller’s lack of authority although the sale
was made in the usual course of business.

Usual course of sale, but the buyer is aware na hindi authorized to sell yung property

C. TITLE IS IN THE NAME OF ONE OR MORE BUT NOT ALL THE PARTNERS AND
THE RECORD DOES NOT DISCLOSE THE RIGHT OF THE PARTNERSHIP AND
CONVEYANCE IS IN THE NAME OF THE PARTNER OR PARTNERS IN WHOSE
NAME THE TITLE STANDS

– GENERAL RULE: Title passes to the third person to whom the property was conveyed
but the partnership may recover the property in the following instances mentioned below.

Yung magbebenta is yung nakapanagalan sa title, here yung seller yung owner, title
passes to buyer but subject to recovery if :

– EXCEPTIONS: When partnership may recover the property:

1. When the act done is not in the ordinary course of business of the partnership except
when all the other partners consent.
2. When the buyer has knowledge of the fact that the partner-seller had no authority to
sell even though it is in the usual course of business.
 The same rule sa letter A, magka partner sila

D. TITLE IS IN THE NAME OF ONE OR MORE OR ALL PARTNERS OR IN A THIRD

PERSON IN TRUST FOR THE PARTNERSHIP AND CONVEYED BY A PARTNER
IN HIS OWN NAME OR IN THE NAME OF THE PARTNERSHIP

It is actually the partnership who owns the land pero titled to different person. The defect
is maaari yung nagbenta is hindi yung may ari nung property. Here only equitable title is
transferred to buyer, pero dapat usual and authorized, but if the sale is not usual, even
equitable title is wala sa buyer.

– GENERAL RULE: Equitable title is transferred to the buyer provided the partner is
acting within the scope of his authority and such transfer is in the usual course of
business.

– EXCEPTIONS: When the buyer is not entitled to equitable interest:

1. If the partnership is not engaged in buying and selling of land or the sale is not in the
usual course of business.

No equitable title if the sale is not usual.

2. If the buyer had knowledge of the partner-seller’s lack of authority although the sale
was made in the usual course of business.

Buyer is in bad faith he is aware of the lack of authority of the partner seller even if it
is usual in the course of the business. It is similar to letter B, sila yung magpartner.

E. TITLE IS IN THE NAME OF ALL PARTNERS AND A CONVEYANCE IS

EXECUTED BY ALL
– All the rights of the partners in the property passes.

It can happen also teat the title is in the name of all the partners, lahat sila pumirma sa
deed of sale. Here there is no recovery

ADMISSIONS

DUTY TO BE BOUND BY ADMISSIONS OR REPRESENTATIONS MADE BY A

PARTNER (Article 1820)
Pag may representation ang isang partner, it binds the partnership.

– An admission by a partner is generally an admission against the partnership.

So if a partner admits liability of the partnership, this is an admission against the

partnership.

– An admission or representation made by any partner concerning partnership affairs

within the scope of his authority is evidence against the partnership.

Admission against the partnership, evidence against the partnership.

CONDITIONS

A. The one making the admission or representation is a partner in an existing partnership.

B. The admission must concern partnership affairs.

C. The admission made must be within the scope of the authority of the one making the
same.

So authorized siya to make such admission

End- 33:27
 ADMISSIONS

RULES REGARDING ADMISSIONS

A. Admissions by a party as testified to by a third person are admissible in evidence against him
in litigation.
- Here, a partner will make an admission and a third person will testify na narinig niya
itong admission, etc. That is evidence against the partner who made the admission in case
there is a case filed in court.
B. Admissions by another are received against a party if the former is acting in the capacity of
agent of the latter. Thus under Article 1820, the admission of a partner made during the existence
of the partnership are binding against the partnership and the partners when such admissions
refer to a matter concerning partnership affairs and made within the scope of his authority.
- Admissions by another are received against a party if the former is acting in the capacity
of agent of the latter. Here, any admission made during the existence of the partnership is
binding against the partnership and also the partners if it concerns partnership affairs and
it is authorized.
C. When a partner makes admissions for himself only without purporting to act for the
partnership, he alone shall be chargeable with his admissions.
- Here ang admissions lang na ginawa ng partner does not relate to the affairs of the
partnership. So para sa kaniya yon personal niya, obviously, the partnership will not be
charged for such admissions.

NOTICE/KNOWLEDGE

EFFECT OF NOTICE TO, OR KNOWLEDGE OF A PARTNER (Article 1821)

- Here, a partnership has a duty to give effect to notice. So, kapag binigyan mo ng notice
ang isang partner, it is notice to the partnership and also the knowledge of one partner is
the knowledge as a general rule of the partnership.
- Please take note of the definition of knowledge as well as notice, if you read your book
the definition is found in different provision (1833).

A. In general, notice to or knowledge of any partner of any matter relating to partnership

affairs is notice to or knowledge of the partnership, that is, a partnership cannot claim
ignorance if a partner was notified or knew. However, this rule has restrictions and
qualifications.
- Ang knowledge ng isang partner if it relates to partnership affair is knowledge of
the partnership.

B. Notice to a partner, given while already partner, is a notice to the partnership, provided it
relates to partnership affairs.
- It is the same thing, kapag may notice may knowledge it related to partnership
affairs, it is notice to the partnership, knowledge of the partnership.

THREE CASES OF KNOWLEDGE

A. Knowledge of a partner who is acting in the particular matter involved acquired while a
partner.
- Here, the acting partner acquires knowledge of a particular thing while he is involved don
sa matter na yon and that this is knowledge by knowledge of the partnership.

B. Knowledge of a partner who is acting in the particular matter involved, or even prior to that
time provided he still remembers the same, that is, “present to his mind.”
- There is also knowledge of a partner who is acting in a particular matter involved or
pwede ring prior to the time that he is involved in the partnership provided that this
information is present to his mind or he remembers the same.
- Example: A acting for the partnership bumili siya ng isang parcel of land from D, so this
is a purchase by the partnership, before the sale prior to this sale or purchase from D nung
parcel of land by the partnership, A is already aware that there is a possible controversy
regarding yung parcel of land na binili from D because let us say like in the example, he
is claiming the parcel of land so itong si A alam na niya na may issue doon sa lupa ni D
but in representation of the partnership binili pa rin niya yung particular parcel of land.
So anyway to cut the story short, you can read the example in the book, he was able to
claim the parcel of land so nawala yung parcel of land from the partnership. Here, the
knowledge of A in who is the acting partner is also knowledge of the partnership so here
D is not liable so alam naman ng partnership na may rish yung pagbili ng lupa, so D is
not liable for usually warranties.
- Also, in the same example it can happen that A obtains the knowledge before he becomes
a partner in the partnership again this is minding on the partnership if yung particular
matter is— itong knwledge na ito is present to the mind of A or A still remembers the
information.
C. Knowledge may have been acquired by a partner not acting in the particular matter involved.
However, here it is essential that the “particular partner having ‘knowledge’ had reason to
believe that the fact related to a matter which had some possibility of being the subject of the
partnership business, and then only if he was so situated that he could communicate it to the
partner acting in the particular matter before such partner gives binding effect to his act. The
words ‘who reasonably could and should have communicated it to the acting partner’ accomplish
this result.” Here the knowledge must have been obtained while already a partner.
- Here, the knowledge is acquired by a non-acting partner so he is the partner who is acting
in a particular transactions so the partner with knowledge is different from the acting
partner. The question is binding ba yung knowledge ng isang non-acting partner
especially if the matter involves a transaction with the third person na pinapasukan nung
isang acting partner. So here, that it is binding only on the partnership if yung partner
with knowledge had reason to believe that the fact related to a matter which has some
possibility of being subject of partnership business and number two if he was situated that
he could communicate tot he acting partner the particular matter before such acting
partner gives binding effect to his act. If it is reasonably possible for the partner with
knowledge to communicate to the acting partner yung information na meron siya this is
knowledge of the partnership.
- Again there is a example in your book, please take a look at it.

OTHER LIABILITIES
DUTY TO BE LIABLE FOR A WRONGFUL ACT OR OMISSION OF A PARTNER
(Article 1822)
- The innocent partners are civilly personally liable, without prejudice of course to their
right to recover from the guilty partner. The partners are liable in solidum. (Article 1824)
- So, here one of the partners commits a wrongful act or omission but it is not only the
partner na guilty ang magiging civilly liable but also the innocent partners but subject to
reimbursement from the guilty partner. Here, the liability of the partners are in solidum or
solidary in accordance with 1824
- Example: A, B, and C partners in ABC partnership. Itong si A while driving the vehicle
belonging to the partnership negligent sya and he caused damages to the fence or the
residents of Y so may bakuran si Y nabangga ni A yung fence ng bakuran ni Y and nung
nangyare ito he is using yung partnership vehicle and he is in the pursuit of the
partnership business. Here, if Y asks for damages in court, the partnership is liable the
partners are liable, all of them, and the liability is solidary kasi nga it occurs while in the
performance of the partnership business and also it involves property of the partnership.
So what you have to remember here is that the innocent partners B and C they were not
the negligent ones they did not drive negligently, it was only A, the innocent partners can
recover from the guilty partner who is A in this case.

DUTY TO MAKE GOOD THE LOSS DUE TO

MISAPPLICATION/MISAPPROPRIATION OF MONEY OR PROPERTY OF A THIRD
PERSON (Article 1823)
- The partnership is liable for any losses suffered by a third person whose money or
property is misappropriated by a partner who received it within the scope of his authority
or by any other partner after it was received by the partnership in the ordinary course of
business while in its custody.
- All the partners are solidarily liable for any loss. (Article 1824)

“So it comprises of two parts”

MANNER OF MISAPPLICATION/MISAPPROPRIATION (Article 1823)

1. The partnership is bound to make good the loss where one partner acting within the scope of
his apparent authority receives money or property of a third person and misapplies it.
- Here, the collecting partner who is authorized to collect obviously receives money and
then misapplies the money.
2. The partnership is bound to make good the loss where the partnership in the course of its
business receives money or property of a third person and the money or property so received is
misapplied by any partner while it is in the custody of the partnership.
- Anyone of the partners misappropriates yung money so nasa partnership fund na tapos isa
sa mga partners minisappropriate niya. In this 2 cases the rules are the same if we go
back—- partnership is liable and again all the partners are liable solidarily for any loss.
- So ang pinagkaiba lang ng 1 and 2 is that in no. 1 it is the collecting partner who
misappropriates, in no. 2 it is any partner who misappropriates but here in both cases that
 the money or the property belongs to a third person and there is misappropriation,
partnership is liable.
DUTY TO BE SOLIDARILY LIABLE (Article 1824)
- All partners are liable solidarily with the partnership for everything chargeable to the
partnership under Articles 1822 and 1823.
- Note that it is not only the partners that are liable in solidum; it is also the partnership.
- It is not only the partners but also the partnership who is liable solidarily.

ESTOPPEL

PARTNER BY ESTOPPEL (Article 1825)

A. When a person through words, written or verbal, or through acts, directly represents
himself as a partner in an existing partnership without consent of the partnership
concerned or in a non-existing partnership with one or more persons not actual partners.
- There is a partner by estoppel, if a person through words, written or verbal, or
through acts, directly represents himself as a partner in an existing partnerships
and yung existing partnership na yun they did not consent or pwede naman itong
taong to directly represent themselves as a partners in a non-existing partner.
Example:
1. Partner ako sa XYZ pero si XYZ walang kaalam-alam na ako ay isang
partner ako sa XYZ. In short, nagpapanggap lang ako na partner sa XYZ; I
am called a partner by estoppel because I directly misrepresented myself.
2. What about if I misrepresented myself to be a partner in 123 partnership
and wala naman talagang 123 partnership tapos sinama ko pa yung dalawa
kong barkada, “Kunyare 123 partnership tayo”. Here, we are not actually
partners, there is no actual partnership, but we are partners by estoppel
because we directly misrepresented ourselves as partners in a non-existent
partnership.
B. When a person through words, written or verbal, or through acts, indirectly represents
himself by consenting to another person representing him as partner in an existing
partnership without consent of the partnership concerned or in a non-existing partnership
with one or more persons not actual partners.
- I allowed myself to be represented as a partner in an existing partnership without the
consent of the partners or I allowed myself to be indirectly represented as a partner in a
non-existing partnership with other people who are not really partners.
- Example: Imbes na ako yung magsabi na ako ay partner, hindi, hinayaan ko yung
barkada ko na laging lasing. Sabi ng barkada kong laging lasing, “Oh, itong si
Atty partner yan sa ABC”, eh hindi naman ako partner sa ABC pero ako naman
hinayaan ko lang. I consented to the misrepresentation of my friend and here I am
liable as a partner by estoppel.
- Also again my friend na laging lasing, sinabi niya “Ay alam mo ba si Atty,
partner yan sa 123”, eh wala naman partnership na 123 tapos sinabi niya pa ulit,
“Doon sa 123 partnership kasama ni Atty. no ‘B’ at ‘C’”. Again wala kaming
partnership: Ako, si ‘B’, and ‘C’ we have no partnership but we can be
considered as partners by estoppel because remember the partnership is non-
existent.
 - So what is the liability in case of partners by estoppel:
- Remember, partners by estoppel are liable as general partners, they are liable for
all obligations as if they are partners but they are not entitled to the rights of
partners. Yung mga nagpanggap na partners and also, yung mga kasama niya are
liable as partners pero they do not have the rights of partners.

PARTNERSHIP BY ESTOPPEL (Article 1825)

- When a party through words, written or verbal, or through acts, either represents himself
or consents to being represented as a partner in an existing partnership with the consent
of the partnership. The partnership is primarily liable with its assets and if the same be
insufficient, the exclusive property of the partners and the person who misrepresents
himself shall be liable.
- In partnership by estoppel, may isang existing partnership and itong existing
partnership na ito they consent that another person who is not part of the
partnership be misrepresented as a partner. Let us say, ABC and partnership hindi
ako kasama tapos sinabi ako sa ABC partnership at pumayag yung mga partners.
SO with respect to me, I am, there is, we have a relationship. Ano yon meron
kaming partnership by estoppel/ Here, importante sa partnership by estoppel is
existing partnership consents to the misrepresentation made by a third person.
Pwede rin indirect ito basta ang importante dito is pumayag yung partnership.
Indirect in such a way that I do not indirectly represent myself as a partner in
ABC tapos pumayag sila but I allow somebody else to represent me pero
pumayag pa rin ang partnership. Yun ang importante sa partnership by estoppel,
papayag yung patnership. Here, the partnership is primarily liable with his assets
if it is insufficient liable yung mga partners and also the person who misrepresents
himself as a partner will be liable.

INCOMING PARTNERS
DUTY TO BE LIABLE TO THIRD PERSONS UPON ENTERING A PARTNERSHIP
(Article 1826)
- A person admitted as a partner into an existing partnership is liable for all the obligations
of the partnership arising before his admission as though he had been a partner when
such obligations were incurred. The liability is limited to his share in partnership property
for existing obligations but extends to his separate property for subsequent obligations.
- Duty ng incoming partners: liable for all obligation of the partnership even if the
obligation did arise before he became a partner in the partnership. Remember his liability
is limited to his share in the partnership property. Kung ano lang kinontribute niya
hanggang doon lang yung liabilty niya. For obligations incurred before he is a partner but
for obligations incurred subsequently. Remember, that he is liable even up to his separate
property.

PREFERENCE OF CREDITORS
PREFERENCE OF PARTNERSHIP CREDITORS IN PARTNERSHIP PROPERTY (Article
1827)
- With respect to partnership assets, the partnership creditors are entitled to priority in
payment being a separate entity from the partner and having its own creditors.
- Partnership creditors are preferred as to partnership assets and personal creditors
are preferred as to personal assets. Kung naniningil ang partnership creditors
tapos may partnerships assets, unahin muna bayaran yung partnership creditors
kugn may natira doon pa lang babayaran yung personal creditors ng bawat isang
partners.