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OBLIGATIONS OF THE PARTNERS - Coggle Diagram

- - - - EQUAL SHARES, UNLESS STIPULATION(1790)
        Unless there is a stipulation to the contrary, the partners shall contribute equal shares to the capital of the partnership.
        
        IF CONTRIBUTION IS IN GOODS = APPRAISAL (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.
        
        IN THE ABSENCE OF STIPULATION = EXPERTS CHOSEN AND CURRENT PRICES
        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 account of the partnership.
        
        IF CONTRIBUTION IS IN MONEY (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.
        
        AMOUNT TAKEN FROM COFFERS
        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.
    - - INDUSTRIAL PARTNERS ARE NOT LIABLE FOR NOT SAVING VENTURE
      - UNLESS STIPULATED OTHERWISE
    - - TO COMPENSATE
        
        TO BE LOYAL; FIDUCIARY DUTY
        
        ACCOUNT AND TRUST(1807)
        
        ACCOUNT - Every partner must account to the partnership for any benefit, and
        
        TRUST - hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership OR from any use by him of its property.
        
        EACH PARTNER IS LIABLE FOR DAMAGES THROUGH HIS FAULT(1794)
        Every partner is responsible to the partnership for damages suffered by it through his fault.
        
        CANNOT COMPENSATE WITH PROFITS/BENEFITS HE MAY HAVE EARNED BY HIS INDUSTRY
        He cannot compensate them with the profits and benefits which he may have earned for the partnership by his industry.
        
        COURTS CAN LESSEN RESPONSIBILITY =
        IF EXTRAORDINARY EFFORTS IN
        OTHER ACTIVITIES +
        UNUSUAL PROFITS
        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)
        
        MENTOR'S NOTE: RENDERING OPINIONS FOR YOUR FIRM (1822)
        Sir: If you are not asked to advocate a particular side yet, render your opinions conservatively. If your opinion is too strong, you can be held to be at fault. Be conservative as much as possible.
      - APPOINTED MANAGER'S OBLIGATION (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.
        The provisions of this article are understood to be without prejudice to the right granted to the other debtor by article 1252, but only if the personal credit of the partner should be more onerous to him.
    - - LIABLE FOR FRUITS
        He shall also be liable for the fruits thereof from the time they should have been delivered, without the need of any demand.
    - - IF FUNGIBLE
        If the things contribute[d] are fungible, or cannot be kept without deteriorating, or if they were contributed to be sold, the risk shall be borne by the partnership.
      - IF APPRAISED & WITHOUT STIPULATION
        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)
  - - - TO HAVE HIS PARTNERSHIP INTEREST CHARGED FOR PERSONAL DEBTS
        (PRIMARY)
        
        TO BE LIABLE PRO-RATA FOR PARTNERSHIP DEBTS
        (SUBSIDIARY & JOINT)
        
        TORT LIABILITY; BREACH OF TRUST LIABILITY (PRIMARY & SOLIDARY)
        
        LIABILITY IN CASE OF ESTOPPEL
        
        LIABILITY OF NEW PARTNERS
        
        RETROACTIVE OBLIGATIONS (1826)
        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, except that this liability shall be satisfied only out of partnership property, unless there is a stipulation to the contrary. (n)
        
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        MAY BE IN PAIS OR BY DEED(1825)
        When a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to anyone, as a partner in an existing partnership or with one or more persons not actual partners,
        he is liable to any such persons to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership,
        
        EFFECT OF REPESENTATION:
        REPRESENTOR BECOMES AGENT (1825)
        When a person has been thus represented to be a partner in an existing partnership, or with one or more persons not actual partners, he is an agent of the persons consenting to such representation to bind them to the same extent and in the same manner as though he were a partner in fact, with respect to persons who rely upon the representation.
        
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        EFFECT OF PUBLIC REPRESENTATION = LIABLE, REGARDLESS OF ACTUAL COMMUNICATION TO ONE GIVING CREDIT
        and if he has made such representation OR consented to its being made in a public manner, he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by OR with the knowledge of the apparent partner making the representation or consenting to its being made:
        
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        EFFECT OF REPRESENTATION
        AS TO LIABILITY (1825)
        
        PARTNERSHIP LIABILITY - When a partnership liability results, he is liable as though he were an actual member of the partnership;
        
        NO PARTNERSHIP LIABILITY - When no partnership liability results, he is liable pro rata with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.
        
        WRONGFUL ACT/OMISSION =
        SOLIDARY LIABILITY (1822)
        Article 1822. Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co-partners, loss or injury is caused to any person, not being a partner in the partnership, OR any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act. (n)
        
        MISAPPLIED FUNDS
        Article 1823. The partnership is bound to make good the loss:
        
        APPARENT AUTHORITY - Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and
        
        COURSE OF ITS BUSINESS + CUSTODY - 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. (n)
        
        SOLIDARY LIABILITY FOR 1822 & 1823
        Article 1824. All partners are liable solidarily with the partnership for everything chargeable to the partnership under articles 1822 and 1823. (n)
        
        APPLICABILITY
        
        Wrongful Act or Omission by Partner.
        
        Act was in the ordinary course of Business OR with Authority of Partners
        
        Loss or Injury was caused to a non-partner OR Penalty was incurred
        
        QUASI-EXCUSSION;
        PARTNERSHIP ASSETS FIRST FOR
        CONTRACTS W/ITH CREDITORS (1816)
        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.
        
        STIPULATION TO CONTRARY, VOID TO THIRD PERSONS (1817)
        Article 1817. Any stipulation against the liability laid down in the preceding article shall be void, except as among the partners. (n)
        
        EFFECT OF DISSOLUTION(1835)
        Article 1835. The dissolution of the partnership does not of itself discharge the existing liability of any partner.
        
        EXCEPT BY EXPRESS OR IMPLIED AGREEMENT (1835)
        A partner is discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between himself, the partnership creditor and the person or partnership continuing the business; and such agreement may be inferred from the course of dealing between the creditor having knowledge of the dissolution and the person or partnership continuing the business.
        
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        A NOTICE OF DISSOLUTION DOES NOT AUTOMATICALLY END THE PARTNERSHIP
        
        PARTNERSHIP ENDS ONLY AFTER THE WINDING UP
        
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        ONLY VOID IN RELATION TO
        THIRD PARTIES
        But among the partners, the partners may exempt a partner from such liability.
        (Jasmine did a good deed; thus, the partners may agree that she is exempt from liability)
        
        How does the payment apply? The creditors receive the same amount of money because they shall receive if all the partners contribute an
        
        PARTNER MAY ENTER INTO SEPARATE OBLIGATION IN HIS OWN NAME (1816)
        However, any partner may enter into a separate obligation to perform a partnership contract. (n)
        
        INDUSTRIAL PARTNERS LIABLE TO THIRD PERSONS/CREDITORS TOO
        
        DEFICIENCY JUDGMENT; COURT MAY CHARGE INTEREST AND APPOINT RECEIVER(1814)
        Without prejudice to the PREFERRED RIGHTS of partnership creditors under article 1827,
        ON DUE APPLICATION TO A COMPETENT COURT by any judgment creditor of a partner, the court which entered the judgment, or any other court,
        
        CHARGING ORDER - may charge the interest of the debtor partner with payment of the unsatisfied amount of such judgment debt with interest thereon;
        
        APPOINT RECEIVER - and may then or later appoint a receiver of his share of the profits, and of any other money due or to fall due to him in respect of the partnership, and make all other orders, directions, accounts and inquiries which the debtor partner might have made, or which the circumstances of the case may require.
        
        CREDITORS PREFERRED OVER PARTNERS(1827)
        The creditors of the partnership shall be preferred to those of each partner as regards the partnership property. Without prejudice to this right, the private creditors of each partner may ask the attachment and public sale of the share of the latter in the partnership assets. (n)
        
        PRIVATE CREDITORS FIRST
        Please remember this. This is very important to remember in winding up.
        
        INTEREST MAY BE REDEEMED (1814)
        The interest charged may be redeemed at any time before foreclosure, OR in case of a sale being directed by the court, may be purchased without thereby causing a dissolution:
        
        SEPARATE PROPERTY - With separate property, by any one or more of the partners;
        OR
        
        PARTNERSHIP PROEPRTY WITH CONSENT - With partnership property, by any one or more of the partners with the consent of all the partners whose interests are not so charged or sold.
        
        Nothing in this Title shall be held to deprive a partner of his right, if any, under the exemption laws, as regards his interest in the partnership. (n)
        
        Receivers are appointed usually when the interest is too big to manage.
        The Receiver has "sweldo" and this may fall on the applicant.