ART. 1786.
Every partner is a debtor of the partnership for whatever he may Article 1838, however, allows rescission or annulment of a partnership contract
have promised to contribute thereto.
He shall also be bound for warranty in case of eviction with regard to specific and
determinate things which he may have contributed to the partnership, in the same
cases and in the same manner as the vendor is bound with respect to the vendee.
He shall also be liable for the fruits thereof from the time they should have been
delivered, without the need of any demand.
Q: What does Article 1786 deal with?
A: Article 1786 deals with the obligations of the partners among themselves and
to the partnership with respect to contribution of property. They are as follows:
1. To contribute at the beginning of the partnership or at the stipulated
time the money, property, or industry which he may have promised to
contribute;
2. To answer for eviction in case the partnership is deprived of the
determinate property contributed; and
3. To answer to the partnership for the fruits of the property the
contribution of which he delayed, from the date they should have been
contributed up to the time of actual delivery.
In addition, the partner has the obligation:
4. To preserve said property with the diligence of a good father of a family
pending delivery to the partnership (see: Art. 1163); and
5. To indemnify the partnership for any damage caused to it by the
retention of the same or by the delay in its contribution (see: Arts.
1788, 1170).
The money or property contributed by a partner becomes he property of the
partnership. It necessarily follows that the same cannot be withdrawn or
disposed of by the contributing partner without the consent or approval of the
partnership or of the other partners. (see: Lozana vs. Depakakibo, 107 Phil. 728;
1960)
Q: State the effect of failure to contribute property promised.
A: The remedy of the other partner or the partnership is not rescission but an
action for specific performance (to collect what is owing) with damages and
interest from the defaulting partner from the time he should have complied
with his obligation (see: Art. 1788). Article 1191, which refers to resolution of
reciprocal obligations in general, is not applicable. Articles 1786 and 1788
specifically refer to the contract of partnership in particular; and it is a well-
known principle that special provisions prevail over general provisions.
on the ground of fraud or misrepresentation committed by one of the parties
thereto.
Q: What is the liability of a partner in case of eviction?
A: The partner is bound in the same cases and in the same manner as the
vendor is bound with respect to the vendee with regard to specific and
determinate things which he may have contributed to the partnership. Under
the law on sales, eviction shall take place whenever by a final judgment based
on a right prior to the sale or an act imputable to the vendor, the vendee is
deprived of the whole or a part of the thing purchased This obligation of
warranty in case of eviction is in consequence of the character of the contract of
partnership which is an onerous contract (see: Art. 1767).
Q: What is the liability of a partner for fruits of property in case of delay?
A: No demand is necessary to put the partner in default. From the mere fact that
the property which a partner ought to deliver does not pass to the common
fund on time, the partnership fails to receive the fruits or benefi ts which the
said contribution produced as well as those it ought to produce, thus
prejudicing the common purpose of obtaining from them the greatest possible
profi ts through some means of speculation or investment. The injury, therefore,
to the partnership is constant.
Q: Is a partner who fails to perform the personal services which he has
stipulated to render to the partnership, liable to the other partners for the
value of the services?
A: Unless there is a special agreement to that effect, the partners are not entitled
to charge each other, or the partnership of which they are members, for their
services in the firm business. The doctrine seems to be that every partner is
bound to work to the extent of his ability for the benefit of the whole, without
regard to the services of his copartners, however unequal in value or amount,
and to require a partner to account for the value of his services would be, in
effect, allowing compensation to the other members of the partnership for the
services they rendered.
The exceptions to this general rule are:
1. If a partner neglects or refuses, without reasonable cause, to render the
service which he agreed to perform by reason of which the partnership
suffered loss, no good reason can be suggested why the erring partner
should not be just as responsible for the breach of his agreement to
render personal service to the partnership as for the breach of any
other stipulation in the partnership contract.
2. If the partner is compelled to make good the loss, each member of the fi
rm, including himself, will receive his proportion of the amount in the
distribution of the partnership assets, and in no just sense can this be
regarded as compensation for the services individually rendered. The
 proper measure of damages in such case is the value of the services
wrongfully withheld.
3. If under the circumstances of the case the proper measure of the
damages or loss (which may include unrealized profits) is the value of
the services wrongfully withheld, then the defendant should be charged
this value. If the defendant had made profit by engaging in other
business in violation of the contract, he is liable to account for the same.

ART. 1790. Unless there is a stipulation to the contrary, the partners shall
contribute equal shares to the capital of the partnership.

Q: Explain the extent of contribution to partnership capital.

A: The partners can stipulate the contribution of unequal shares to the common
fund, but in the absence of such stipulation, the presumption is that their
contribution shall be in equal shares. This principle is just and reasonable and is
consistent with the rule that partners are deemed to have equal rights and
obligations (see: Art. 1770, par. 1). This rule is not applicable to an industrial
partner unless, besides his services, he has contributed capital pursuant to an
agreement to that effect (see: Art. 1797, par. 2).