Text of the provision
Art. 1769. In determining whether a partnership exists, these rules shall apply:
(1) Except as provided by article 1825, persons who are not partners as to each other are not partners as to third persons;
(2) Co-ownership or co-possession does not of itself establish a partnership, whether such-co-owners or co-possessors do or do not share any profits made by the use of the property;
(3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived;
(4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment: (a) As a debt by installments or otherwise; (b) As wages of an employee or rent to a landlord; (c) As an annuity to a widow or representative of a deceased partner; (d) As interest on a loan, though the amount of payment vary with the profits of the business; (e) As the consideration for the sale of a goodwill of a business or other property by installments or otherwise.
(n)
Civil Code of the Philippines, Republic Act No. 386, approved June 18, 1949, effective August 30, 1950. Reproduced in full; verified verbatim against the LawPhil and ChanRobles official-text renderings.
What this article means
This lists the tests for whether a partnership exists: co-ownership alone or sharing gross returns does not create one, but sharing net profits is prima facie evidence of partnership — unless the profits were received as a debt, wages, rent, annuity, loan interest, or price of goodwill.
Questions about this provision
Related provisions
- Article 1767 — Contract of Partnership Defined.
- Article 1770 — Lawful Object.
Cases citing this article
- Pedro D. Dusol and Maricel M. Dusol vs. Emmarck A. Laso, as owner of, G.R. No. 200555, January 20, 2021 — read the decision on LawPhil →
- Federico Jarantilla, Jr. vs. Antonieta Jarantilla, et al, G.R. No. 154486, December 1, 2010 — read the decision on LawPhil →
- Heirs of Jose Lim, represented by Elenito Lim vs. Juliet Villa Lim, G.R. No. 172690, March 3, 2010 — read the decision on LawPhil →
- Heirs of Tan Eng Kee vs. Court of Appeals, G.R. No. 126881, October 3, 2000 — read the decision on LawPhil →
Compiled automatically from Supreme Court decisions published on LawPhil that expressly cite this article, most frequently cited first. A listing means the decision cites the provision — it is not a statement that the case is the leading authority, and it does not show whether a ruling has since been modified or abandoned. Always read the decision itself.