Torres is indebted for P5,000.

00 to MACE Trading Company, a partnership

managed by Mendoza to whom Torres also owes P10,000.00. The two debts which
are both demandable are unsecured. Torres remits P4,500.00 to Mendoza in
payment of his debt to him. Accordingly, Mendoza issues a receipt for his own
credit. To which credit should the payment be applied?t!

To both the partnership credit and Mendoza's credit

proportionately at P1,500.00 and P3,000.00 respectively.

To Mendoza's credit because the payment made by Torres is intended for his debt to
Mendoza who issues his own receipt.

To Mendoza's credit because its amount is greater than that of the partnership credit.

To the partnership credit because the managing partner

should not prefer his own interest to that of partnership.

In the partnership of A, B and C, A was appointed in the Article of Co-partnership

as managing partner. As such manager and acting in good faith: (Phil CPA, 90-
2)orrect!

He may execute all acts of administration despite the opposition of B and C.

His power is revocable even without his consent.

He can be removed for valid cause without the vote of the partners owning the
controlling interest.

His power can be revocable at any time even without just cause provided that it is
approved by the partners owning the controlling interest.