ARTICLE
1768. The partnership has a juridical personality separate and distinct from
that of each of the partners, even in case of failure to comply with the
requirements of article 1772, first paragraph. (n)
ARTICLE
1772. Every contract of partnership having a capital of three thousand pesos or
more, in money or property, shall appear in a public instrument, which must be
recorded in the Office of the Securities and Exchange Commission.
Failure
to comply with the requirements of the preceding paragraph shall not affect the
liability of the partnership and the members thereof to third persons. (n)
Interpretation
Partnership
has an artificial personality separate and different from its actual
partners. Partnership is treated as if it has its own personality. Whenever a
partner is entering any agreements on behalf of the partnership, those
agreements will be treated as if it is the partnership, not the partner, which
enters to agreements. Each partner can act as an agent of the partnership. All
partners’ deals on behalf of the partnership will make the latter liable or
benefactor depending what those deals are.
A
sale by a partner on behalf of the partnership is a sale of the partnership.
The partners are mere agents of their partnership. An expense by a partner on behalf of the
partnership is likewise an expense of the partnership.
This
is true even if the partnership does not comply yet with Article 1772 of the
Philippine Civil Code. Article 1772
requires that all partnership with P3,000 or more worth of capital must be
registered with Security and Exchange Commission (SEC). At the amount of at
least P3,000, it is virtually required that all partnerships must be registered
with SEC. But non-compliance with the requirement will not stop the partnership
from having its own personality. Its liabilities may not be binding but it
still has its own personality.
To
conclude, all partners are agents of the partnership, and therefore, also bind
other partners. Such partnership feature is called Mutual Agency. Partnership
is a Mutual Agency, whether registered or not with SEC.