Understanding partnership (Conclusion)
(Conclusion)
In one case, the Supreme Court held that if several partners engaged in the business of buying and selling real estate cannot bind the firm by purchases or sales thereof made in the regular course of business, then they are incapable of exercising the essential rights and powers of general partners. Their association is not really a partnership, but a several agency.
Thus, title to real property is under the partnership’s name, any partner may convey title to such property by a conveyance executed in the partnership name. Nevertheless, the partnership may recover this property, unless: (a) in conveying it, the partner apparently carried on in the usual way of the business of the partnership, in which case his conveyance binds the partnership; or (b) the grantee or a person claiming through such grantee conveyed the property to a holder for value without knowledge that the partner, in making the conveyance, has exceeded his authority.
The conveyance of this property by the partner, in his own name, passes the equitable interest of the partnership, provided the partner was apparently carrying on in the usual way of the business of the partnership. The person acquiring equitable interest or ownership over the property is entitled to the performance of certain duties and the exercise of certain powers by the partnership, as may be necessary.
Meanwhile, where title to real property is in the name of one or more but not all the partners, and the record does not disclose the right of the partnership the partners in whose name the title stands may convey title to such property. Nevertheless, the partnership may recover such property if the partners’ act does not bind the partnership, as when they are not authorized to act for the partnership, and the person they are dealing with knows of the lack of authority.
Moreover, where title to the real property is in the name of one or more but not all the partners, or in a third person in trust for the partnership, a conveyance executed by a partner in the partnership name, or in his own name, passes the equitable interest of the partnership, provided that the act is one within the partner’s authority.
A conveyance executed by all partners over real property under their names passes all their rights therein.
Where, by any wrongful act or omission of any partner acting in the ordinary course of business of the partnership or with the authority of his co-partners, loss or injury is caused to any third person or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act.
The partnership is likewise bound to make good the loss: (a) where on partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and (b) where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.
A person shall be liable for misrepresenting himself or consenting to another representing himself to anyone as a partner in an existing partnership or with one or more persons not actual partners. His liability shall extend to those persons to whom such representation is made and who has, on the faith of such representation, given credit to the actual or apparent partnership.
In this regard, when a partnership liability results, he is liable as though he was an actual member of the partnership. Meanwhile, when no partnership liability results, he is liable pro rata with other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.
A person admitted as a partner into an existing partnership is liable for all obligations of the partnership arising before his admission as though he had been a partner when they were incurred. His liability, however, shall be satisfied only out of partnership property, unless there is a stipulation to the contrary.
The creditors of the partnership shall be preferred to those of each partner insofar as partnership property is concerned. Without prejudice to this right, the private creditors of each partner may ask the attachment and public sale of the share of the latter in the partnership assets.
