Short answer. No, not as against the creditors. Under Article 1817, any stipulation against the liability partners bear for partnership debts is void — except as among the partners themselves. So an agreement that one partner will not be liable binds only the partners internally; a firm creditor can still pursue him, and he must then seek reimbursement from the others.
What the law says
Any stipulation against the liability laid down in the preceding article shall be void, except as among the partners.
Civil Code, Article 1817 — Void Stipulation Against Liability. Read the full provision →
The liability cannot be waived against creditors
Article 1817 stops partners from contracting away, as against outsiders, the personal liability they bear for the firm's debts. This article provides that any stipulation against the liability laid down in the preceding article shall be void, except as among the partners. So a clause in the partnership agreement saying a particular partner will not be liable for the firm's debts has no effect on the people the firm owes. They did not agree to it and are not bound by it; the partner remains fully liable to them despite whatever the partners arranged among themselves.
'Except as among the partners' — it works internally
The exception is important and often misunderstood. The stipulation is void only as against third persons; except as among the partners, it is valid. So the agreement does real work between the partners themselves: it allocates who ultimately bears a debt. If the partners agree that one of them will not carry a particular liability, and a creditor nonetheless collects from him, he can turn to the others to be made whole under that internal agreement. What the law forbids is using the arrangement to deny an outside creditor his remedy; what it allows is using it to settle, among the partners, where the loss finally lands.
Why the law refuses to let creditors be bound
The rule protects people who extend credit to a partnership. When outsiders deal with a firm, they rely on the pooled responsibility of the partners — the knowledge that the partners stand behind the firm's obligations with their own assets. If partners could privately excuse one of their number and have that bind creditors, they could hollow out that reliance at will, deciding among themselves that the wealthiest partner is not answerable just as a creditor comes calling. That would make a partnership's promises worth only what its internal arrangements allowed on any given day.
What to put in the agreement instead
For founders, the takeaway is to be realistic about what a partnership agreement can and cannot do. You cannot promise an outside creditor away — a clause purporting to exempt a partner from firm debts will not stop that creditor from suing him. What you can do, and should do clearly, is agree among yourselves how liabilities are shared and who reimburses whom, so that if a creditor collects from one partner, the internal settling-up is already spelled out. If a partner truly wants limited exposure to outsiders, the answer is not a stipulation in a general partnership but a different structure — a limited partnership or a corporation — where the law itself limits liability.
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.
- Aniceto G. Saludo, Jr. vs. Philippine National Bank, G.R. No. 193138, August 20, 2018 — read the decision on LawPhil →