Short answer. Yes. Article 1831 of the Civil Code lets a court decree dissolution on application by or for a partner when a partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business. Misbehavior that damages the enterprise is a recognized ground for judicial dissolution.
What the law says
A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business
Civil Code, Article 1831 — Judicial Dissolution. Read the full provision →
Prejudicial conduct is a ground the court can act on
A partner who is dragging the business down through his own behavior is not something the others simply have to endure. The law lets a court decree a dissolution where a partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business. The focus is on the effect: conduct that harms the enterprise itself, such as damaging its reputation, driving away customers or suppliers, or acting in ways that make the venture unworkable. It is not aimed at petty friction or personal dislike, but at behavior that genuinely undermines the partnership's ability to operate.
The remedy is granted by a court, not self-declared
This is a judicial dissolution, which means it comes on application by or for a partner and is decreed by the court, not simply announced by an aggrieved partner. That distinction matters. A partner cannot unilaterally pronounce the partnership dissolved on this ground and walk away clean; he asks the court, which weighs the evidence of the conduct and its prejudicial effect. Because the court is deciding, the partner seeking dissolution must be ready to prove both the misconduct and how it harmed the business, rather than resting on general complaints about a difficult co-partner.
How this differs from a nearby ground
This ground overlaps in practice with another the same article recognizes, where a partner so conducts himself in partnership matters that it is not reasonably practicable to carry on the business with him. The distinction is one of angle. One looks at conduct that prejudices the business; the other at conduct that makes continued partnership with that person impractical. In a real dispute both may be argued together. Identifying which ground the facts fit best helps frame the application, since the court will want the conduct tied clearly to the harm the law is concerned with.
Practical steps before applying
If a co-partner's behavior is hurting the business, start documenting it: the specific acts, when they happened, and the concrete damage they caused, whether lost accounts, harmed goodwill, or disrupted operations. Check the partnership agreement too, since it may set out its own procedures for disputes or expulsion that are worth using first. Dissolution is a serious step that unwinds the whole venture and triggers winding up and accounting, so it is worth weighing against less drastic options. But where the conduct is real and prejudicial, the law plainly makes it a ground on which a court may dissolve.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- In the Matter of Urgent Petition for the Release of Prisoners on Humanitarian Grounds, G.R. No. 252117, July 28, 2020 — read the decision on LawPhil →
- Josefina P. Realubit vs. Prosencio D. Jaso and Eden G. Jaso, G.R. No. 178782, September 21, 2011 — read the decision on LawPhil →
- Luzviminda J. Villareal, et al. vs. Donaldo Efren C. Ramirez, et al, G.R. No. 144214, July 14, 2003 — read the decision on LawPhil →