Short answer. Generally yes. Article 1821 provides that notice to any partner of a matter relating to partnership affairs operates as notice to the partnership itself. The firm is treated as knowing what one partner was told, so it cannot later claim ignorance — with one exception, where that partner committed or consented to a fraud on the partnership.
What the law says
Notice to any partner of any matter relating to partnership affairs, and the knowledge of the partner acting in the particular matter, acquired while a partner or then present to his mind, and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner, operate as notice to or knowledge of the partnership, except in the case of fraud on the partnership, committed by or with the consent of that partner.
Civil Code, Article 1821 — Notice to a Partner. Read the full provision →
Notice to one partner is notice to the firm
A partnership acts through its partners, so the law treats what a partner learns as something the partnership learns. Article 1821 says that notice to any partner of any matter relating to partnership affairs operates as notice to the partnership. This means a person dealing with the firm does not have to track down every partner; delivering notice about a partnership matter to one of them binds the whole partnership. The firm cannot escape the consequences of that notice merely because the particular partner failed to pass the information along to the others.
Knowledge counts, not just formal notice
The article reaches beyond delivered notices to actual knowledge. It covers the knowledge of the partner acting in the particular matter, acquired while a partner or then present to his mind, and even the knowledge of any other partner who reasonably could and should have communicated it to the acting partner. So if the partner handling a transaction already knows a relevant fact, or if another partner knows something he ought to have relayed, that knowledge is attributed to the partnership. The rule prevents a firm from claiming it was in the dark when one of its own members held the very information at issue.
The fraud exception
There is a deliberate limit. The imputation of notice and knowledge does not apply in the case of fraud on the partnership, committed by or with the consent of that partner. The reason is fairness: a partner who is defrauding his own firm cannot be presumed to have shared what he knew, because his interest lies in concealing it. Charging the partnership with the guilty partner's knowledge in that situation would reward the wrongdoer and punish the innocent partners. So where the partner who held the information was acting in fraud of the partnership, his knowledge is not treated as the firm's knowledge.
Why this matters in practice
For anyone dealing with a partnership, Article 1821 is reassuring: proper notice to one partner about a partnership matter generally reaches the firm, and the firm cannot later disown it by pointing to internal communication failures. For the partners themselves, it is a warning. Because the knowledge of one can bind all, partners need reliable internal channels to share what they learn, and they should be careful about what a co-partner is told, since it may commit the whole firm. The exception aside, the safe assumption is that what one partner knows about partnership affairs, the partnership knows too.
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.
- Michael C. Guy vs. Atty. Glenn C. Gacott, G.R. No. 206147, January 13, 2016 — read the decision on LawPhil →