Short answer. Yes. The partnership is bound to make good the loss where a partner, acting within the scope of his apparent authority, receives money or property of a third person and misapplies it — the partnership's liability does not depend on whether it actually benefited from what the partner took.
What the law says
The partnership is bound to make good the loss: (1) Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it;
Civil Code, Article 1823 — Partnership Liability for Misapplied Property. Read the full provision →
Apparent authority is enough to trigger partnership liability
The first ground the statute lists fits your situation directly: where a partner, acting within the scope of his apparent authority, receives money or property of a third person and misapplies it, the partnership is bound to make good the loss. The key phrase is apparent authority — it does not require the partner to have had actual internal authorization for that specific transaction, only that the partner appeared, from the third person's reasonable perspective, to be acting within the authority a partner in that position would normally have.
The partnership's own benefit is not the test
Nothing in the statute conditions the partnership's liability on the partnership itself having profited from the misapplied funds. The rule is framed around the partner's apparent authority and the misapplication of a third person's property, not around whether the partnership ended up better off. This means the partnership can be liable to make the third person whole even though it received no benefit at all from the partner's wrongdoing.
A second, related ground exists for property in the partnership's own custody
The article also covers a second, separate scenario: where the partnership itself, in the course of its business, receives a third person's money or property, and that property is later misapplied by any partner while it remains in the partnership's custody. That ground differs from the first by focusing on custody by the partnership rather than apparent authority of the individual partner, but both grounds lead to the same outcome — the partnership must make good the loss.
What this does not resolve
This provision establishes the partnership's obligation to the wronged third person; it does not itself address how the loss is then allocated among the partners internally, or what recourse the partnership or the other partners have against the partner who actually committed the misapplication. Those are separate questions about internal partnership accounting and liability, governed by other rules, once the third person has been made whole under this article.
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 →
- Ma. Julieta B. Bendecio and Merlyn Mascariñas vs. Virginia B. Bautista, G.R. No. 242087, December 7, 2021 — read the decision on LawPhil →