Every partners is responsible to the partnership for damages suffered by its through his fault, and he cannot compensate them with the profits and benefits which he may have earned for the partnership by his industry. However, the courts may equitably lessen this responsibility if through the partner’s extraordinary efforts in other activities of the partnership, unusual profits have been realized. (1686a)
Obligation of partner for damages to partnership.
This article follows the general rule applicable to all contracts that any person guilty or negligence or fault in the fulfillment of his obligation, shall be liable for damages. (Art. 1170.)
The partner’s fault, however, must be determined in accordance with the nature of the obligation and the circumstances of the person, the time, and the place. (Art. 1173)
Compensation of damages with profits earned for partnership by guilty partner.
- Damages not generally subject to set-off. – As a general rule, the damages caused by a partner to the partnership cannot be compensated or offset by the profits or benefits which he may have earned for the partnership by his industry.
a. The partner has the obligation to secure benefits for the partnership. Hence, the profits which he may have earned pertain as a matter of law or right to the partnership.
b. He has also the obligation to exercise diligence in the performance of his obligation as a partner. Consequently, in as much as partner is a debtor to the partnership for his industr, and at the same time is obliged to repair the injury which he might have occasioned through his fault, there can not be any compensation. Compensation requires that the negligent partner be both a creditor and a debtor of the partnership. ( Art. 1278; 11 Manresa 356-357.
2. Exception – If unsual profits are realized through the extraordinary efforts of the partner at fault, the courts are authorized by the law to equitably mitigate or lessen his liability for damages. This rule rests on equity. Note that eveven in this case the partner at fault is not allowed to compensate the damages suffered by the profits earned.
[ Ang bawat kasosyo ay may pananagutan sa pakikipagsosyo para sa mga pinsala na dinanas ng kanyang kasalanan at hindi niya maaring mabayaran ang mga ito sa mga kita at benepisyo na maaaring makuha niya para sa pakikipagtulungan sa kanyang industriya, gayunpaman ang mga korte ay maaaring kapansing- pansing bawasan ang responsibilidad na ito kung sa pamamagitan ng mga kasosyo ng pambihirang pagsusumikap sa iba pang mga aktibidad ng pakikipagtulungan ang hindi pangkaraniwang kita ay natanto.]
Case Sample:
A partnership between Riz And Anne is engaged in an autoshop business. A customer bought a car to be painted yellow but Riz bought red paint instead and the car is painted red. Damages are suffered by the partnership for 30,000.00 due to the repainting.
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