PRELIMS

1. Valderama and Co., a general merchandise partnership has become insolvent for
maladministration of the business and entered into an agreement with its creditors to the
effect that business should be continued for the time being under the direction and
management of an experienced businessman appointed by the creditors, an arrangement to
be carried out until the claims of the creditors are fully satisfied. Can you consider the
creditors who are parties to the agreement partners? Explain.

2. Tobes, an industrial partner, was authorized to manage, operate, and direct the affairs,
business and activities of the partnership and to make, sign, seal, execute and deliver
contracts—upon terms and conditions acceptable to him duly approved in writing by the
capitalist partner. The firm was engaged in the buying and selling merchandise of all kinds.
One day, Tobes purchased on credit certain goods regularly purchased by the company, but
without first securing the authority of the capitalist partners. Is the partnership bound?
Explain.

3. A and B were partners. A was indebted to X. On A’s death, B voluntarily assumed A’s debt, so
that X would not sue A’s estate anymore. But B did not pay later on. Therefore, X sued the
partnership. Is the firm liable? Explain.

4. Faustino Lichauco was the managing partner of a firm for the carrying of a rice cleaning
business. Because the enterprise was unprofitable, same was discontinued and the rice
machinery was dismantled. When sued for an accounting, he refused on the ground that
under the term of the partnership contract, dissolution could be done only by a vote of 2/3 of
the members, and such vote had not yet taken place. Is his contention correct? Explain.
5. Quiroga granted Parsons (in Visayas) exclusive right to sell Quiroga bed in the Visayas.
Quiroga was to furnish beds to Parsons, and would demand the price sixty days from
shipment, minus a commission or deduction of 25%. Parsons agreed not to sell any other kind
of bed, and to pay the price agreed upon. Is this a contract of agency to sell or a contract of
sale? Explain.

6. German and Co. authorized its agent Kommerzel to direct and administer its commercial
business and among others, to collect sums of money and exact their payment by legal mean.
With this authority, can the agent in the principal’s name bring a court action for collection?
Explain.

7. An agent with general power for administration, desirous of improving the financial
condition of his principal’s business, sold a piece of land belonging to his principal for double
the price that appeared in an inventory prepared by the principal before leaving the office.
Do you think the agent exceeded his power? Why?

8. Dielle, Karlo, Fiona, and Una are general partners in a merchandising firm. Having
contributed equal amounts to the capital, the agree the distribution of profit according to the
following proportion, 40%, 30%, 20% and 10% respectively without any provision for the
loss. In 2011, they generated the income amounting to P1,000,000, while in 2012 they
sustained a loss amounting to P2,000,000. Realizing that the venture will not be successful,
Una conveys her whole interest in the partnership to Justine without the knowledge and
consent of Dielle, Karlo, and Fiona.
a. Distribute the income in 2011 and loss in 2012. Explain.
b. Assuming there was no provision on the share of profit and loss, how will the income
in 2011 and the loss in 2012 be distributed? Explain.
c. Is the partnership dissolved? Explain.
 MIDTERMS
1. Jinggoy and Philip formed a partnership to operate a car repair shop in Quezon City. Jinggoy
provided the capital while Philip contributed his labor and industry. On one side of their shop,
Jinggoy opened and operated a coffee shop, while on the side, Philip put up a car accessories
store. May they engage in such separate businesses? Why?

2. X and Y are partners in certain business, X being the managing partner. Z owes X P5,000 and
the Partnership P10,000, and both credits are due and demandable. Z pays X P3,000 and the
latter issues a receipt in his name. Should X collect the entire amount? Would the result be
the same if the receipt is in the name of the partnership? Explain.

3. A, B, and C formed a general partnership with the following contributions to the common
fund: A, P2,000; B, P4,000; C, P6,000. There was no agreement on the division of profits or
apportionment of losses. After some years of business operations, the assets of the
partnership dwindled to P3,000; so the partners agreed to stop their business. The
partnership is indebted to Corpuz for a loan of P12,000. Under the circumstances, from whom
can Corpuz demand satisfaction of his credit, and to what extent? Explain.

4. 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 the manager for the first five years without compensation;
c. “C” shall not be liable for losses. The partnership became bankrupt.
i. Could A alone oppose B and C to have C removed as manager?
ii. Could C be personally held liable for the debts of the partnership not satisfied
with the assets of the partnership? Amplify.

5. (a) What is meant by a partner by estoppel?

(b) When is an existing or actual partnership bound by the representation by or in behalf of
a person that he is a member of the partnership?
(c) What is the character of the liability of a partner by estoppel to a person who, relying on
the representation that the former is a partner in an actual or apparent partnership, had given
credit to such partnership?

6. Kris asked her close friend, Korina, to buy some groceries for her in the supermarket. Was
there a nominate contract entered into between Kris and Korina? In the affirmative, what was
it? Explain.

7. Jose appoints Augusto, a minor 18 years of age, his agent to sell his car. Augusto sells the car
to Maria. Soon thereafter, the price of cars went up with the floating rate of the peso, and Jose
promptly sought to disaffirm the sale and brought an action to recover the car on the ground
that Augusto’s act was void since a minor cannot be an agent. May Jose avoid the contact
entered into by Augusto in favor of Maria on the ground of his agent’s incapacity? Explain.
 FINALS
1. A property was subject to co-ownership. There was a “Kasulatan ng Bilihan Tuluyan” but it
erroneously included an area of 1,000sq.m. which was allegedly excessive. The title was
issued under the name of the buyer. Thereafter, seller filed a complaint to remove the excess
which is denominated as an action for annulment or cancellation of title with damages. The
buyer contends that the action has already prescribed as it was based on implied trust which
prescribes in 10 years. The complaint was filed 19 years from the registration of the land. Is
the contention correct? Why?

2. On January 1, 1980, Redentor and Remedies entered into an agreement by virtue of which
the former was to register a parcel of land in the name of Remedies under the explicit
covenant to reconvey the land to Remigio, son of Redentor, upon the son’s graduation from
college. In 1981, the land was registered in the name of Remedies. Redentor died a year later
in 1982. In March 1983, Remigio graduated from college. In February 1992, Remigio
accidentally found a copy of the document constituting Remedies as the trustee of the land.
In May 1994, Remigio filed a case against Remedies for reconveyance of the land to allege
that the action has prescribed. How should the matter be decided? Discuss.

3. Richard sold a parcel of land in Cebu to Leo for 100 million payable in annual installments
over a period of 10 years, but the 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 sale of the subdivision lots himself. Is the revocation valid or not?
Why?

4. 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 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 the units bought by the customer. Is Al’s objection valid? Can DRBI collect from
him or not? Reason.

5. 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 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 and why?

6. 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 specification of their respective powers and duties. A applied for the position of
Secretary and B 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.

7. Dielle, Karlo, Fiona, and Una are general partners in a merchandising firm. Having
contributed equal amounts to the capital, the agree the distribution of profit according to the
following proportion, 40%, 30%, 20% and 10% respectively without any provision for the
loss. In 2011, they generated the income amounting to P1,000,000, while in 2012 they
sustained a loss amounting to P2,000,000. Realizing that the venture will not be successful,
Una conveys her whole interest in the partnership to Justine without the knowledge and
consent of Dielle, Karlo, and Fiona.
a. Distribute the income in 2011 and loss in 2012. Explain.
b. Assuming there was no provision on the share of profit and loss, how will the income
in 2011 and the loss in 2012 be distributed? Explain.
c. Is the partnership dissolved? Explain.

BEST OF LUCK AND MAY THE FORCE BE WITH YOU!