Practice question
A partner receives a client's money within apparent authority. Instead of applying it as agreed, the partner misappropriates it before another partner learns of it. The firm argues that the innocent partners' lack of knowledge alone eliminates the firm's Article 1823 obligation. Which is correct?
- The partnership must make good the loss under the stipulated apparent-authority category; individual ignorance alone does not erase it.
- Every receipt is automatically private regardless of authority.
- The client must prove unanimous approval of theft.
- The money becomes the wrongdoer's capital automatically.
- No partnership can owe money unless all partners personally touch it.
Legal references
- Civil Code, Articles1786–1811 and1816–1824: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html
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