Topic: Dissolution of Partnership, Joint Venture vs.

Partnership

A. X and Y are partners in a shop offering portrait painting. Y provided the capital and the marketing
while X was the portrait artist. They accepted the PS0,000.00 payment of Kyla to do her portrait but X
passed away without being able to do it. Can Kyla demand that Y deliver the portrait she had paid for
because she was dealing the with business establishment and not with the artist personally? Why or why
not? (3%)

B. In this jurisdiction, is a joint venture (i.e., a group of corporations contributing resources for a specific
project and sharing the profits therefrom) considered a partnership? (3%)

Topic: 1767 (Contract of Partnership), 1843 (Limited Partnership)

Q: Timothy executed a Memorandum of Agreement (MOA) with Kristopher setting up a business venture
covering three (3) fastfood stores known as "Hungry Toppings" that will be established at Mall Uno, Mall
Dos, and Mall Tres. The pertinent provisions of the MOA provides:

1. Timothy shall be considered a partner with thirty percent (30%) share in all of the stores to be set up
by Kristopher;

2. The proceeds of the business, after deducting expenses, shall be used to pay the principal amount of
P500,000.00 and the interest therein which is to be computed based on the bank rate, representing the
bank loan secured by Timothy;

3. The net profits, if any, after deducting the expenses and payments of the principal and interest shall be
divided as follows: seventy percent (70%) for Kristopher and thirty percent (30%) for Timothy;

4. Kristopher shall have a free hand in running the business without any interference from Timothy, his
agents, representatives, or assigns , and should such interference happen, Kristopher has the right to buy
back the share of Timothy less the amounts already paid on the principal and to dissolve the MOA; and

5. Kristopher shall submit his monthly sales report in connection with the business to Timothy.

What is the contractual relationship between Timothy and Kristopher?

Topic: Partnership liability, Remedies of Creditors to Partnership

Q: A, B and C entered into a partnership to operate a restaurant business. When the restaurant had gone
past break-even stage and started to gamer considerable profits, C died. A and B continued business
without dissolving the partnership. They in fact opened a branch of the restaurant, incurring obligation
in the process. Creditors started demanding for the payment of their obligations.

a.Who are liable for the settlement of the partnership’s obligations? Explain.

b.What are the creditors recourse/s? Explain

Q: TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the statement is false. Explain your
answer in not more than two (2) sentences.

(C). An oral partnership is valid. (1%)

TOPIC: OBLIGATIONS OF A PARTNER; INDUSTRIAL PARTNER

Q: Joe and Rudy formed a partnership to operate a car repair shop in Quezon City. Joe provided the
capital while Rudy contributed his labor and industry. On one side of their shop, Joe opened and
operated a coffee shop, while on the other side, Rudy put up a car accessories store. May they engage in
such separate businesses? Why? [5%]

Topic: Conveyance of a Partner’s Share Dissolution

Q: Dielle, Karlo and Una are general partners in a merchandising firm. Having contributed equal amounts
to the capital, they also agree on equal distribution of whatever net profit is realized per fiscal period.
After two years of operation, however,

Una conveys her whole interest in the partnership to Justine, without the knowledge and consent of
Dielle and Karlo.

1. Is the partnership dissolved?

2. What are the rights of Justine, if any, should she desire to participate in the management of the
partnership and in the distribution of a net profit of P360.000.00 which was realized after her purchase
of Una's interest?

Topic: Effect of Death of Partner

Q: Stating briefly the thesis to support your answer to each of the following cases, will the death - of a
partner terminate the partnership?

Topic: Dissolution of Partnership

Q: Pauline, Patricia and Priscilla formed a business partnership for the purpose of engaging in neon
advertising for a term of five (5) years. Pauline subsequently assigned to Philip her interest in the
partnership. When Patricia and Priscilla learned of the assignment, they decided to dissolve the
partnership before the expiration of its term as they had an unproductive business relationship with
Philip in the past. On the other hand, unaware of the move of Patricia and Priscilla but sensing their
negative reaction to his acquisition of Pauline's interest, Philip simultaneously petitioned for the
dissolution of the partnership.

1. Is the dissolution done by Patricia and Priscilla without the consent of Pauline or Philip valid? Explain.

2. Does Philip have any right to petition for the dissolution of the partnership before the expiration of its
specified term? Explain

Topic: Dissolution of Partnership; Termination

Q: A, B and C formed a partnership for the purpose of contracting with the Government in the
construction of one of its bridges. On June 30, 1992, after completion of the project, the bridge was
turned over by the partners to the Government. On August 30, 1992, D, a supplier of materials used in
the project sued A for collection of the indebtedness to him. A moved to dismiss the complaint against
him on the ground that it was the ABC partnership that is liable for the debt. D replied that ABC
partnership was dissolved upon completion of the project for which purpose the partnership was
formed. Will you dismiss the complaint against A if you were the Judge?

Topic: Obligations of a Partner

Q: W, X, Y and Z organized a general partnership with W and X as industrial partners and Y and Z as
capitalist partners. Y contributed P50,000.00 and Z contribute P20,000.00 to the common fund. By a
unanimous vote of the partners, W and X were appointed managing partners, without any specification
of their respective powers and duties.

A applied for the position of Secretary and B applied for the position of Accountant of the partnership.

The hiring of A was decided upon by W and X, but was opposed by Y and Z. The hiring of B was decided
upon by W and Z, but was opposed by X and Y. Who of the applicants should be hired by the
partnership? Explain and give your reasons.

Topic: Partnership

Q: X used his savings from his salaries amounting to a little more than P2,000.00 as capital in establishing
a restaurant. Y gave the amount of P4,000.00 to X as financial assistance with the understanding that Y
would be entitled to 22% of the annual profits derived from the operation of the restaurant. After the
lapse of 22 years, Y filed a case demanding his share in the said profits. X denied that there was a
partnership and raised the issue of prescription as Y did not assert his rights at anytime within ten (10)
years from the start of the operation of the restaurant. Is Y a partner of X in the business? Why? What is
the nature of the right to demand one’s share in the profits of a partnership? Does this right prescribe?
Topic: Distinguishment of co-ownership from partnership

Q: Distinguish co-ownership from partnership.

Topic: Liability under partnership

Q: Tomas, Rene and Jose entered into a partnership under the firm name “Manila Lumber”.
Subsequently, upon mutual agreement, Tomas withdrew from the partnership and the partnership was
dissolved. However, the remaining partners, Rene and Jose, did not terminate the business of “Manila
Lumber” apparently without objection from Tomas. The withdrawal of Tomas from the partnership was
not published in the newspapers. Could Tomas be held liable for any obligation or indebtedness Rene
and Jose might incur while doing business in the name of “Manila Lumber” after his withdrawal from
one partnership? Explain.

Topic: Appointment of Manager, Liability of partner, distribution of profits and stipulations excluding a
partner from profits or losses under Articles 1800, 1816, 1797,1799.

Q: “A”, “B” and “C” formed a partnership under the following terms and conditions:

(a)Participation: “A” – 40%; “B” – 40%

“C” – 20%.

(b)“A” and “B” would supply the entire capital. “C” would contribute his management expertise and be
manager for the first five years without compensation.

(c)“C” shall not be liable for losses.

The partnership became bankrup

1.Could “A” alone, opposed by “B” and “C”, have “C” removed as manager? Explain.

2.Could “C” be personally held liable for debts of the partnership not satisfied with the assets of the
partnership. Amplify.
AGENCY

Topic: Special Power of Attorney

Q: An agent, authorized by a special power of attorney to sell a land belonging to the principal
succeeded in selling the same to a buyer according to the instructions given the agent. The agent
executed the deed of absolute sale on behalf of his principal two days after the principal died, an event
that neither the agent nor the buyer knew at the time of the sale. What is the standing of the sale?

A. Voidable.

B. Valid.

C. Void.

D. Unenforceable.

TOPIC: AGENCY; GUARANTEE COMMISSION

Q: As an agent, AL was given a guarantee commission, in addition to his regular commission, after he
sold 20 units of refrigerators to a customer, HT Hotel. The customer, however, failed to pay for the units
sold. AL’s principal, DRBI, demanded from AL payment for the customer’s accountability. AL objected, on
the ground that his job was only to sell and not to collect payment for units bought by the customer. Is
AL’s objection valid? Can DRBI collect from him or not? Reason. (5%)

Q: CX executed a special power of attorney authorizing DY to secure a loan from any bank and to
mortgage his property covered by the owner’s certificate of title. In securing a loan from MBank, DY did
not specify that he was acting for CX in the transaction with said bank. Is CX liable for the bank loan?
Why or why not? Justify your answer. (5%)

TOPIC: AGENCY

Q: Jo-Ann asked her close friend, Aissa, to buy some groceries for her in the supermarket. Was there a
nominate contract entered into between Jo-Ann and Aissa? In the affirmative, what was it? Explain. (5%)

TOPIC: AGENCY; COUPLED WITH AN INTEREST

Q: Richard sold a large parcel of land in Cebu to Leo for P100 million payable in annual

installments over a period of ten years, but title will remain with Richard until the purchase price is fully
paid. To enable Leo to pay the price, Richard gave him a power-of-attorney authorizing him to subdivide
the land, sell the individual lots, and deliver the proceeds to Richard, to be applied to the purchase price.
Five years later, Richard revoked the power of attorney and took

over the sale of the subdivision lots himself. Is the revocation valid or not? Why? (5%)

TOPIC: AGENCY vs. SALE

Q: A foreign manufacturer of computers and a Philippine distributor entered into a contract whereby the
distributor agreed to order 1,000 units of the manufacturer's computers every month and to resell them
in the Philippines at the manufacturer's suggested prices plus 10%. All unsold units at the end of the year
shall be bought back by the manufacturer at the same price they were ordered. The manufacturer shall
hold the distributor free and harmless from any claim for defects in the units. Is the agreement one for
sale or agency? (5%)

Topic: Appointment of Sub-Agent

Q: X appoints Y as his agent to sell his products in Cebu City. Can Y appoint a subagent and if he does,
what are the effects of such appointment?

Topic: Termination; Effect of Death of Agent

Q: Stating briefly the thesis to support your answer to each of the following cases, will the death - (c) of
an agent end an agency?

Topic: Powers of the Agent

Q: Prime Realty Corporation appointed Nestor the exclusive agent in the sale of lots of its newly
developed subdivision. Prime Realty told Nestor that he could not collect or receive payments from the
buyers. Nestor was able to sell ten lots to Jesus and to collect the down payments for said lots. He did
not turn over the collections to Prime Realty.

Who shall bear the loss for Nestor’s defalcation, Prime Realty or Jesus
Topic: General Agency vs. Special Agency

Q: A as principal appointed B as his agent granting him general and unlimited management over A’s
properties, stating that A withholds no power from B and that the agent may execute such acts as he
may consider appropriate.

Accordingly, B leased A’s parcel of land in Manila to C for four (4) years at P60,000.00 per year, payable
annually in advance.

B leased another parcel of land of A in Caloocan City to D without a fixed term at P3,000.00 per month
payable monthly.

B sold to E a third parcel of land belonging to A located in Quezon City for three (3) times the price that
was listed in the inventory by A to B.

All those contracts were executed by B while A was confined due to illness in the Makati Medical Center.

Rule on the validity and binding effect of each of the above contracts upon A the principal. Explain your
answers.

Topic: Duty of Agent to Account under Article 1891.

Q: “A”, an official of a mining company, was appointed by the company as its buying agent for the
acquisition of mining rights in a designated area for operation by the company. “A” proceeded to enter
into contracts with the claim owners. Claim owner “B”, an illiterate, was helped by “A” in locating and
perfecting his rights and for which “A”, by contract, obtained a

participation in the royalty paid by the company to the claim owner.

a.) The mining company goes to you for advice as to whether it is entitled to the royalty obtained by “A”
from “B”. What would your advice be and why?

b.) May “B” the claim owner, question the royalty obtained by “A”? On what grounds? Explain.