PRELIM EXAM (PROBLEMS)

(50 points)

INSTRUCTIONS:

1. Read each Problem carefully;

2. This is a discussion exam designed to assess and test your understanding

of the provisions of the law. Hence, your answers should be in an essay
form;

3. In answering the problem, observe the following:

(a) First, answer the questions squarely (Yes or No);

(b) Then, explain your position; and
(c) Finally, cite the article where you based your answers;

4. Each answer (per Item/Question) must not be less than 30 words; but
not more than 100 words and no need to restate the Problems;

5. The template of your work shall be:

(a) Short bond paper (margin);

(b) Century Gothic 12 (font);
(c) Justified (margin);
(d) Single space;
(e) Observe proper margin and space between paragraphs;
(f) PDF (format);

TOPIC COVERAGE:

 WEEK 2 - General Provisions on Partnership;

 WEEK 3 - Obligations of Partners Among Themselves;

PROBLEMS:

1. Clark and Bruce formed a partnership to operate a car repair shop in the
City of Manila. Clark provided the capital while Bruce contributed his labor
and industry. On one side of their shop, Clark opened and operated a
coffee shop, while on the other side, Bruce put up a car accessories store.
 a. May Clark engage in his said separate businesses? Why of why
not? (2.5 points)
b. How about Bruce, may he engage in his separate businesses?
Why of why not? (2.5 points)

2. 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 and Z
contributed P20,000 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 by W and X, but was opposed by Y and Z.

The hiring of B was decided by W and Z, but was opposed by X and Y.

a. Should A be hired as Secretary? Why or why not? (5 points)

b. Should B be hired as Accountant? Why or why not? (5points)

 WEEK 4 - Obligations of Partners with Regard to Third Persons;

 WEEK 5 - Dissolution and Winding up;

PROBLEMS:

3. 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 P50,000 payment of Ina to do her portrait but X passed away without
being able to do it.

Can Ina demand that Y deliver the portrait she had paid for since she was
dealing the with business establishment and not with the artist personally?
Why or why not? Support your answer with an article. (5 points)

4. X, Y, and Z are partners in a partnership which was dissolved by the

withdrawal of X. Y, who was notified by Z of X’s withdrawal, entered into
new transaction with W in the name of the partnership.

a. Is the partnership liable to W? Why or why not? (2.5 points)

 b. Are X and Z liable to Y for their share of the liability? Why or why
not? (2.5 points)

5. Same partnership. The term of existence of the partnership expired. This

notwithstanding, X enters into a contract with W in the name of the
partnership.

a. Is the partnership liable to W? Why or why not? (2.5 points)

b. What right, if any, is given to Y and Z? Why or why not?
(2.5 points)

6. Same partnership. The partnership was dissolved. Assume the following

information:

 Partnership assets – P320,000;

 Advances by X to partnership – P20,000;
 Capital contribution of each partner – P30,000;
 Liability of partnership – to M – P150,000.

Compute the share of each partner in the profits. (5 points)

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

a. Is the dissolution done by Pat and Pris without the consent of

Pau or Phil valid? Explain. (2.5 points)
b. Does Phil have any right to petition for the dissolution of the
partnership before the expiration of its specified term? Explain.
(2.5 points)

8. 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.

Who among A and D is correct? (5 points)

9. Francis and Leo executed Articles of Partnership called Gold Bar Company
(GBC) with two of them as partners to engage into gold business. Their
sharing basis was in proportion to share and share alike. Francis managed
the business affairs while Leo acted as supervisor.

Later on, they availed the services of Norman as industrial partner, where
they executed their own Articles of Partnership under the same firm name
with virtually the same purpose. After a while, Francis and Leo bought the
interest of Norman, and the two returned to being the sole partners and
continued the partnership without any further written agreement or
reconstitution of the written Articles of Partnership.

Leo entered into a management contract with another gold enterprise –

KAPA. Then, Leo withdrew his equipment from GBC for use in KAPA, and
abandoned the partnership altogether.

Francis wrote Leo reminding him of his contributions and to perform his
duties as supervisor. In response, Leo told Francis that he will not be able to
comply with his contribution and he will no longer work as superintendent.
With this, Francis informed Leo that his (Leo) share will just be 20% of the net
profits. However, Leo took funds more than his contribution. Thus, Francis
notified Leo that he dissolved the partnership.

a. Was the first partnership (between Francis and Leo) dissolved

with the coming of Norman? Why or why not? (2.5 points)

b. Is Leo liable to damages? Why or why not? (2.5 points)

– END –