Text of the provision
Art. 1818. Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority. An act of a partner which is not apparently for the carrying on of business of the partnership in the usual way does not bind the partnership unless authorized by the other partners. Except when authorized by the other partners or unless they have abandoned the business, one or more but less than all the partners have no authority to:
(1) Assign the partnership property in trust for creditors or on the assignee's promise to pay the debts of the partnership;
(2) Dispose of the good-will of the business;
(3) Do any other act which would make it impossible to carry on the ordinary business of a partnership;
(4) Confess a judgment;
(5) Enter into a compromise concerning a partnership claim or liability;
(6) Submit a partnership claim or liability to arbitration;
(7) Renounce a claim of the partnership. No act of a partner in contravention of a restriction on authority shall bind the partnership to persons having knowledge of the restriction.
(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
Every partner is an agent of the partnership, and his act apparently carrying on the usual business binds the partnership — unless he had no authority and the third person knew it. Acts not apparently in the usual course (assigning property in trust, disposing of goodwill, confessing judgment, compromising, arbitrating, renouncing claims) need authority from all.
Related provisions
- Article 1817 — Void Stipulation Against Liability.
- Article 1819 — Conveyance of Partnership Realty.
Cases citing this article
- Villamor & Victolero Construction Company, et al. vs. Sogo Realty and Development Corporation/Sogo Realty, G.R. No. 218771 / G.R. No. 220689, June 3, 2019 — 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.