TITLE IX

Partnership CHAPTER 1 General Provisions

ARTICLE 1767. By the contract of partnership two or more persons bind
themselves to contribute money, property, or industry to a common
fund, with the intention of dividing the profits among themselves. Two
or more persons may also form a partnership for the exercise of a
profession. (1665a)
ARTICLE 1768. The partnership has a juridical personality separate and
distinct from that of each of the partners, even in case of failure to
comply with the requirements of article 1772, first paragraph.
ARTICLE 1769. In determining whether a partnership exists, these rules
shall apply: (1) Except as provided by article 1825, persons who are not
partners as to each other are not partners as to third persons; (2) Co-
ownership or co-possession does not of itself establish a partnership,
whether such co-owners or co-possessors do or do not share any profits
made by the use of the property; (3) The sharing of gross returns does
not of itself establish a partnership, whether or not the persons sharing
them have a joint or common right or interest in any property from
which the returns are derived; (4) The receipt by a person of a share of
the profits of a business is prima facie evidence that he is a partner in
the business, but no such inference shall be drawn if such profits were
received in payment: (a) As a debt by installments or otherwise; (b) As
wages of an employee or rent to a landlord; (c) As an annuity to a widow
or representative of a deceased partner; (d) As interest on a loan,
though the amount of payment vary with the profits of the business; (e)
As the consideration for the sale of a goodwill of a business or other
property by installments or otherwise.
ARTICLE 1770. A partnership must have a lawful object or purpose, and
must be established for the common benefit or interest of the partners.
When an unlawful partnership is dissolved by a judicial decree, the
profits shall be confiscated in favor of the State, without prejudice to the
provisions of the Penal Code governing the confiscation of the
instruments and effects of a crime. (1666a)
ARTICLE 1771. A partnership may be constituted in any form, except
where immovable property or real rights are contributed thereto, in
which case a public instrument shall be necessary. (1667a)
ARTICLE 1772. Every contract of partnership having a capital of three
thousand pesos or more, in money or property, shall appear in a public
instrument, which must be recorded in the Office of the Securities and
Exchange Commission. Failure to comply with the requirements of the
preceding paragraph shall not affect the liability of the partnership and
the members thereof to third persons.
ARTICLE 1773. A contract of partnership is void, whenever immovable
property is contributed thereto, if an inventory of said property is not
made, signed by the parties, and attached to the public instrument.
(1668a)
ARTICLE 1774. Any immovable property or an interest therein may be
acquired in the partnership name. Title so acquired can be conveyed
only in the partnership name.
ARTICLE 1775. Associations and societies, whose articles are kept secret
among the members, and wherein any one of the members may
contract in his own name with third persons, shall have no juridical
personality, and shall be governed by the provisions relating to co-
ownership. (1669)
ARTICLE 1776. As to its object, a partnership is either universal or
particular. As regards the liability of the partners, a partnership may be
general or limited. (1671a)
ARTICLE 1777. A universal partnership may refer to all the present
property or to all the profits. (1672)
ARTICLE 1778. A partnership of all present property is that in which the
partners contribute all the property which actually belongs to them to a
common fund, with the intention of dividing the same among
themselves, as well as all the profits which they may acquire therewith.
(1673)
ARTICLE 1779. In a universal partnership of all present property, the
property which belonged to each of the partners at the time of the
constitution of the partnership, becomes the common property of all the
partners, as well as all the profits which they may acquire therewith.
A stipulation for the common enjoyment of any other profits may also
be made; but the property which the partners may acquire subsequently
by inheritance, legacy, or donation cannot be included in such
stipulation, except the fruits thereof. (1674a)
ARTICLE 1780. A universal partnership of profits comprises all that the
partners may acquire by their industry or work during the existence of
the partnership. Movable or immovable property which each of the
partners may possess at the time of the celebration of the contract shall
continue to pertain exclusively to each, only the usufruct passing to the
partnership. (1675)
ARTICLE 1781. Articles of universal partnership, entered into without
specification of its nature, only constitute a universal partnership of
profits. (1676)
ARTICLE 1782. Persons who are prohibited from giving each other any
donation or advantage cannot enter into universal partnership. (1677)
ARTICLE 1783. A particular partnership has for its object determinate
things, their use or fruits, or a specific undertaking, or the exercise of a
profession or vocation. (1678)

CHAPTER 2
Obligations of the Partners SECTION 1 Obligations of the Partners Among
Themselves
ARTICLE 1784. A partnership begins from the moment of the execution
of the contract, unless it is otherwise stipulated. (1679)
ARTICLE 1785. When a partnership for a fixed term or particular
undertaking is continued after the termination of such term or particular
undertaking without any express agreement, the rights and duties of the
partners remain the same as they were at such termination, so far as is
consistent with a partnership at will. A continuation of the business by
the partners or such of them as habitually acted therein during the term,
without any settlement or liquidation of the partnership affairs, is prima
facie evidence of a continuation of the partnership.
ARTICLE 1786. Every partner is a debtor of the partnership for whatever
he may have promised to contribute thereto. He shall also be bound for
warranty in case of eviction with regard to specific and determinate
things which he may have contributed to the partnership, in the same
cases and in the same manner as the vendor is bound with respect to
the vendee. He shall also be liable for the fruits thereof from the time
they should have been delivered, without the need of any demand.
(1681a)
ARTICLE 1787. When the capital or a part thereof which a partner is
bound to contribute consists of goods, their appraisal must be made in
the manner prescribed in the contract of partnership, and in the absence
of stipulation, it shall be made by experts chosen by the partners, and
according to current prices, the subsequent changes thereof being for
the account of the partnership.
ARTICLE 1788. A partner who has undertaken to contribute a sum of
money and fails to do so becomes a debtor for the interest and damages
from the time he should have complied with his obligation. The same
rule applies to any amount he may have taken from the partnership
coffers, and his liability shall begin from the time he converted the
amount to his own use. (1682)
ARTICLE 1789. An industrial partner cannot engage in business for
himself, unless the partnership expressly permits him to do so; and if he
should do so, the capitalist partners may either exclude him from the
firm or avail themselves of the benefits which he may have obtained in
violation of this provision, with a right to damages in either case.
ARTICLE 1790. Unless there is a stipulation to the contrary, the partners
shall contribute equal shares to the capital of the partnership.