Short answer. No. Once three months have passed from the time you learned of the third person's designation of profit and loss shares, you can no longer complain about it, and the same bar applies if you already began carrying out that decision, so waiting past that window forfeits the challenge even if the split looks manifestly inequitable.
What the law says
In no case may a partner who has begun to execute the decision of the third person, or who has not impugned the same within a period of three months from the time he had knowledge thereof, complain of such decision.
Civil Code, Article 1798 — Designation by a Third Person. Read the full provision →
Partners can delegate the profit split to a third person
Partners are allowed to agree that a third person, rather than the partnership agreement itself, will designate each partner's share in the profits and losses. That designation is not open to challenge for just any reason — it may be impugned only when it is manifestly inequitable, meaning the unfairness has to be obvious and substantial, not a matter of one partner simply preferring a different split. This keeps the third person's designation meaningful rather than something every dissatisfied partner can reopen at will. Manifestly inequitable is also the only ground the article names, so a challenge has to be framed in those terms from the start.
The three-month window to object
Even a manifestly inequitable designation cannot be complained about forever. A partner who has not impugned the decision within three months from the time he had knowledge of it loses the right to complain about it afterward. The clock starts running from actual knowledge of the designation, not from some later formal notice, so a partner who learns of the split and simply lets three months pass without objecting is barred from raising the unfairness later, however clear that unfairness might be. The two bars operate independently: letting three months pass forfeits the challenge even if you never lifted a finger to implement the split, just as implementing it forfeits the challenge even inside the three months.
Starting to carry out the decision also forfeits the challenge
There is a second, independent bar: a partner who has already begun to execute the third person's decision cannot complain about it either, regardless of how much time has passed. Acting on the designation — treating it as the operative split and conducting partnership affairs accordingly — is itself treated as accepting it. One more limit rounds out the provision: the designation of profits and losses cannot be entrusted to one of the partners themselves, since that would let a partner set their own share rather than leave it to a genuinely third, disinterested party.
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 →