OLD SPANISH CIVIL CODE

TITLE VIII
On partnerships
CHAPTER ONE
General provisions
Article 1,665. A partnership is a contract whereby two or more persons undertake to put in common
money, property or industry, with the intention of dividing any gains between them.
Article 1,666. The partnership must have a lawful purpose and be established for the common interest of
the partners. In the event of dissolution of an unlawful partnership, any gains obtained shall be destined
to charitable institutions of the partnership’s domicile and, in the absence thereof, those of the province.
Article 1,667. A civil partnership may be incorporated in any form, unless immovable properties or
rights in rem should be contributed thereto, in which case a public deed shall be required.
Article 1,668. The partnership contract shall be null and void whenever immovable properties
are contributed thereto, unless an inventory thereof is drafted and signed by the parties, which must be
attached to the relevant public deed.
Article 1,669. Partnerships whose covenants are kept secret between the partners and those wherein
each partner contracts in his own name with third parties shall have no legal personality. These kinds of
partnerships shall be governed by the provisions regulating joint ownership.
Article 1,670. Civil partnerships may hold all forms recognised by the Commercial Code depending on
their corporate purpose. In such case, the provisions thereof shall apply to the extent that they do not
oppose the provisions of the present Code.
Article 1,671. A partnership is either universal or specific.
Article 1,672. A universal partnership may affect all existing property or all gains.
Article 1,673. A partnership affecting all existing property is the one whereby the parties put in
common all property currently belonging to them, with the intention of dividing it between them, and all
gains acquired as a result thereof.
Article 1,674. In a universal partnership of all existing property, any property which used to belong to
each partner and all gains acquired as a result thereof shall become the common property of them
all. The partners may also agree to share reciprocally any other gains; but the partnership may not
comprise property which the partners may subsequently acquire pursuant to inheritance, legacy or gift,
but may include the fruits thereof.
Article 1,675. The universal partnership of gains comprises everything which the partners may acquire
as a result of their industry or work during the term of the partnership. Movable or immovable property
held by each partner at the time of execution of the contract shall continue to be the private property of
each of them, and the partnership shall only acquire the usufruct thereof.
Article 1,676. A universal partnership contract entered into without specification of the kind of partnership
shall only create a universal partnership of gains.
Article 1,677. Persons to whom it is forbidden to reciprocally grant each other any gift or advantage may
not create a universal partnership between them.
Article 1,678. The purpose of a specific partnership is only specific things, the use thereof or their fruits,
or a specific undertaking, or the exercise of a profession or Article
CHAPTER 2º
On the obligations of the partners
SECTION ONE
On the obligations of the partners toward each other
Article 1,679. The partnership shall begin from the very moment of entering into the contract, unless
otherwise agreed.
Article 1,680. The partnership shall last the agreed term; in the absence of an agreement, for the term of
the business serving as exclusive purpose of the partnership, if the former should have a limited duration
as a result of its nature; in any other case, for the whole life of the partners, save for the power reserved
in article 1,700 and for the provisions of 1,704.
Article 1,681. Each partner shall owe the partnership what he has undertaken to contribute to it. He shall
also be liable for dispossession of any certain and specific things contributed to the partnership in
the same cases and in the same manner as the seller vis-à-vis the purchaser.
Article 1,682. The partner who has undertaken to contribute a sum of money and has failed to provide it
shall owe by operation of law the interest thereon from the date on which he ought to have provided it,
without prejudice to his liability for any damages caused. The same shall apply in respect of any sums
taken from the partnership’s account, and interest shall be payable from the date on which he took them
for his personal benefit.
Article 1,683. The industrial partner shall owe the partnership any gains obtained in the branch of
industry constituting the purpose thereof.
Article 1,684. Where a partner authorised to administer the partnership should collect an amount due
and payable to him on his own behalf, from a person who also owed the partnership another amount
which was also due and payable, the amount collected must be attributed to both credits in proportion to
their respective amounts, even if he should have issued a receipt only on account of his own assets;
however, if he should have issued a receipt on account of the partnership’s assets, the whole amount
thereof shall be attributed thereto. The provisions of this article shall be understood without prejudice to
the debtor’s right to exercise the power granted pursuant to article 1,172, in the sole event that the
partner’s personal credit should be more burdensome to him.
Article 1,685. The partner who has received his share in a credit held against the partnership without the
other partners having received their share shall be obliged to contribute the amount received to the
partnership’s assets if the debtor should later become insolvent, even if he should have issued a receipt
only for his share of the credit.
Article 1,686. Any partner shall be liable to the partnership for any damages suffered by the latter by his
fault, and may not set off such damages against any benefits obtained from his industry.
Article 1,687. The risk of specific and determined non-fungible things contributed to the partnership
whereby only the use and fruits thereof are to be common property shall be borne by the partner who is
their owner. If the things contributed should be fungible, or if they cannot be stored without impairment
thereof, or if they should have been contributed in order to be sold, the risk shall be borne by the
partnership. The risk of any things contributed including an appraisal thereof in the relevant inventory
shall also be borne by the partnership, and in this case any claim shall be limited to their appraisal price.
Article 1,688. The partnership shall be liable to any partner for any amounts disbursed by the latter
on behalf of the former plus applicable interest; it shall also be liable for any obligations undertaken in
good faith by the partner on corporate business, and for the risks which are inseparable from the
management of the partnership.
Article 1,689. Gains and losses shall be distributed as agreed. If only the share of each partner in any
gains should have been agreed, the same share shall apply for losses.
In the absence of an agreement, the part of each partner in gains and losses must be proportional to
his contribution. The share of the partner who only contributes his industry shall be equal to that of the
partner who has contributed the least. If, as well as his industry, he should also have contributed some
capital, he shall also receive the proportional share corresponding thereto.
Article 1,690. If the partners should have agreed to entrust to a third party the designation of the
share corresponding to each partner in any gains and losses, such designation may only be challenged in
the event that it should be manifestly inequitable. In no event may such decision be challenged by a
partner who has begun to enforce the third party’s decision, or who has failed to challenge it within three
months counting from the time he became aware of it.Designation of gains and losses may not be
entrusted to one of the partners.
Article 1,691. An agreement excluding one or more partners from any share in gains or losses shall be
null and void. Only the industrial partner may be released from liability for any losses.
Article 1,692. The partner appointed as director in the partnership contract may perform all acts
of administration in spite of his partners’ opposition, unless he should act in bad faith; his powers shall
be irrevocable unless there are legitimate grounds for it. A power of attorney granted after execution of
the contract, where such contract should not include an agreement to confer it, may be revoked at any
time.
Article 1,693. Where two or more partners should have been entrusted with the management of
the partnership without determination of their duties, or without having expressed that the ones may not
act without the others’ consent, each of them may exercise all acts of administration separately; but any
of them may object to the transactions performed by another before they are legally effective.
Article 1,694. In the event of stipulation that the managing partners cannot act without the others’
consent, the consent of all of them shall be required for the validity of any acts, without the possibility of
alleging absence or impossibility of any of them, save in the event of imminent danger of serious or
irreparable harm to the partnership.
Article 1,695. In the absence of stipulations relating to the manner of administration, the following rules
shall be observed:
1. All partners shall be deemed to be attorneys, and whatever each of them performs by himself shall be
binding on the partnership, but any of them may object to the transactions performed by the others
before they become legally effective.
2. Each partner may avail himself of the things which comprise the partnership’s funds according to local
custom, as long as he does not do so against the interests of the partnership, or in such a way that it
prevents the use thereof to which his partners are entitled.
3. Any partner may make the rest bear with him any expenses necessary for the conservation of
common property.
4. No partner may undertake any development of the partnership’s immovable properties, even if he
should allege that it is useful for the partnership.
Article 1,696. Each partner may by himself associate with a third party as regards his share; but the
associate shall not become a member of the partnership without the partners’ unanimous consent, even if
the former should be a director.
SECTION 2ª
On the partners’ obligations to third parties
Article 1,697. The following shall be required to bind the partnership vis-à-vis a third party as a result of
the acts of one of the partners:
1. For the partner to have acted as such, on behalf of the partnership.
 2. For the partner to have the power to bind the partnership pursuant to an express or implied
mandate.
3. For the partner to have acted within the limits provided in his power of attorney or mandate.
Article 1,698. The partners shall not be joint and severally bound by the debts of the partnership; and no
partner may bind the rest as a result of an act undertaken by him personally unless they have conferred a
power of attorney on him for such purpose. The partnership shall not be bound in respect of a third party
for acts performed by a partner in his own name or without the partnership’s power of attorney; but it shall
be bound vis-à-vis the partner to the extent that such acts have inured to its benefit. The provisions of this
article shall be understood without prejudice to the provisions of rule 1 of article 1,695.
Article 1,699. The creditors of the partnership shall be preferred over the each partner’s creditors in
respect of the property of the partnership. Without prejudice to this right, each partner’s particular
creditors may request the attachment and auctioning of the latter’s share in the assets of the partnership.
CHAPTER 3º
On the ways in which partnerships are extinguished
Article 1,700. A partnership shall be extinguished:
1. Upon expiration of the term for which it was created.
2. Upon loss of the thing or termination of the business constituting its purpose.
3. As a result of the death, insolvency, incapacitation or declaration of prodigality of any of the partners,
and in the event provided in article 1,699.
4. By the will of any of the partners, subject to the provisions of articles 1,705 and 1,707. Partnerships
mentioned in article 1,670 shall be excepted from the provisions of numbers 3 and 4 of this article in
the cases where they are to survive in accordance with the Commercial Code.
Article 1,701. Where the specific thing which a partner should have promised to contribute to the
partnership should perish prior to delivery thereof, its loss shall trigger the dissolution of the
partnership. The partnership shall also be dissolved in any event as a result of the loss of such thing
where, the partner contributing it having reserved the ownership thereof, he should only have transferred
the use or enjoyment thereof. However, the partnership shall not be dissolved as a result of the loss of
the thing where such loss should take place after the partnership has acquired ownership thereof.
Article 1,702. A partnership created for a specific period may be extended with the consent of all
partners. Such consent may be express or implied, and shall be evidenced by ordinary means.
Article 1,703. If the partnership should be extended after expiration of its term, a new partnership shall be
deemed to have been created. If it should be extended prior to expiration of the term the
original partnership shall continue.
Article 1,704. The agreement that, in the event of death of one of the partners the partnership shall
continue between the surviving partners is valid. In such case, the deceased partner’s heir shall only be
entitled to have the partition performed, as of the date of the deceased’s death; and he shall not
participate in any subsequent rights and obligations save to the extent that they are a necessary result of
acts undertaken prior to such date. If the agreement provides that the partnership is to continue with the
heir, it shall be enforced,, without prejudice to the provisions of number 4 article 1,700.
Article 1,705. Dissolution of the partnership at the will or pursuant to the resignation of one of the
partners shall only take place where no term of the partnership should have been set or no term should
result from the nature of the business. For the resignation to be effective it must be given in good faith at
the proper time; likewise it must be communicated to the other partners.
Article 1,706. A resignation shall be in bad faith where the resigning partner intends to appropriate for
himself the profit which should have been common to all. In this case the resigning partner shall not be
released vis-àvis his partners, and the latter shall be entitled to exclude him from the partnership.
Resignation shall be deemed not to have been given in proper time where, things not being in order, the
partnership should be interested in delaying its dissolution. In this case the partnership shall continue until
the conclusion of any outstanding business.
Article 1,707. A partner cannot claim dissolution of a partnership which has been created for a specific
term either pursuant to the provisions of the contract or to the nature of the business, unless he has just
cause to do so, such as the breach by one of his partners of his obligations, or his becoming disqualified
to conduct the business of the partnership or other similar grounds in the opinion of the Courts.
Article 1,708. Partition between the partners is governed by the rules applicable to estates, both as
regards its form and the resulting obligations. The industrial partner cannot be adjudicated any share in
the property provided, but only its fruits or profits, in accordance with the provisions of article 1,689,
unless otherwise expressly agreed.