II. A. Obligations of Partners to the Partnership Flashcards
What are the obligations of the partners to the partnership?
- To contribute; Warrant (see Art. 1786, 1787, 1788, 1790, 1791, 1795);
- To apply sums collected pro rata;
- To compensate Art. 1794;
- To be loyal; Fiduciary duty Art. 1807
How is a partner considered a debtor to the partnership?
Under Art. 1786, par. 1. Every partner is a debtor of the partnership for whatever he may have promised to contribute thereto.
Is the partner bound to warrant the property he contributed to the partnership?
Yes. Under Art. 1786 par. 2. “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.”
How are the goods contributed by the partners appraised?
Art. 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:
(1) it shall be made by experts chosen by the partners, and
(2) according to current prices, the subsequent changes thereof being for the account of the partnership.
What are the repercussions upon the partner who fails to contribute a sum of money which he has undertaken to do so?
Art. 1788. par. 1. 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.
What is the remedy of the partnership in case a partner applies to himself money taken from the partnership coffers?
Art. 1788. par. 2. The same rule applies of 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.
Remedy: Partner who appropriates partnership funds to himself will:
become a debtor for the interest and damages;
from the time he converted the amount to his own use
What is the proportion of the partners’ contribution to the shares of the partnership capital?
Art. 1790. Unless there is a stipulation to the contrary, the partners shall contribute equal shares to the capital of the partnership.
What is the remedy of the partnership in case a partner refuses to contribute additional share to the capital in order to avert imminent loss?
Art. 1791. If there is no agreement to the contrary, in case of an imminent loss of the business of the partnership, any additional share to the capital, except an industrial partner, to save the venture, shall be obliged to sell his interest to the other partners.
This provision applies when:
There is no agreement to the contrary;
There is an imminent loss of the business of the partnership;
A partner refuses to contribute additional share to the capital to save the venture
Legal effect: Said partner will be obliged to sell his interest to the other partners
Exception: Industrial partners
Exception to the exception: Unless stipulated *because Art. 1791 states “if there is no agreement to the contrary*
This provision also implies the obligation of the capitalist partner to contribute additional share to the partnership in case of imminent loss or danger to the business of the partnership.
When will a partner bear the risk for the contribution of specific and determinate things?
When it is not fungible and only the use and fruits are for the common benefit of the partners (partnership)
Art. 1795 par. 1. 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.
This provision applies when:
- The thing contributed is specific and determinate, and not fungible;
- The partner only contributed the extent of use and right to the fruits (usufruct) of the property.
When will the partnership bear the risk for the thing contributed by the partners?
The partnership will bear the risk of things contributed if:
(1) The thing contributed is not specific and determinate (exclusio unius est exclusio alterius);
(2) The thing contributed is fungible (see Art. 1795 par. 2)
(3) The thing contributed cannot be kept without deteriorating (see Art. 1795 par. 2)
(4) All the things brought into the partnership and appraised in the inventory. Liability shall, however, be limited to the value at which they were appraised. (see Art. 1795 par. 2)
What is the obligation of the managing partner with regard to sums he collected for himself?
Apply it pro rata to his account and the partnership’s account. Where a person is separately indebted to the partnership and to the managing partner at the same time, any sum received by the managing partner shall be applied to the two (2) credits in proportion to their amounts, except where he received it for the account of the partnership, in which case the whole sum shall be applied to the partnership credit only. (see Art. 1792)
Requisites:
- There exists at least two (2) debts- one to the partnership; the other to the managing partner;
- Both debts are demandable;
- The partner who collects is authorized to manage and actually manages the partnership.
What shall be the obligation of the partner in case he or she is responsible for damages suffered by the partnership?
The partner shall be liable for the damages due to his fault. The partner cannot compensate them with the profits and benefits which he may have earned fro the partnership by his industry. However, the courts may equitable lessen this responsibility if through the partner’s extraordinary efforts in other activities of the partnership, unusual profits have been realized. (see Art. 1794).
