ACTIVITY 2

1.Trina, Casey, Brielle, and Sophia were partners. Trina assigned her interest in the
partnership to her daughter Lucia. Lucia now wanted to join the management of the
business. Casey, Brielle, and Sophia refused. Is the refusal valid? Why or why not?

Answer:
Under Article 1804, every partner may associate another person with him in his share, but
the associate shall not be admitted into the partnership without the consent of all the other
partners, even if the partner having an associate should be a manager. The refusal of
Casey, Brielle, and Sophia was valid because they are the existing partners of the
partnership. Even if Trina assigned her interest in her daughter Lucia, she will only be a sub-
partner and cannot manage the business unless all the partners agreed. Admitting new
partners should have the consent of all existing partners specially in managing the business
of partnership.

2. Jacob, John and Jim are capitalist partners, each contributed Php1,000,000.00 and
Jed, the industrial partner contributed his services. Suppose Carlo, a customer is the
creditor of the partnership for Php9,000,000.00. Can Carlo collect from the partnership
and all the partners?

Answer:
Under Article 1816, all partners including, industrial ones, shall be liable pro rata with all their
property and after all the partnership assets have been exhausted. Carlo, the creditor can
collect from the partnership and all the partners because the partners are the agents of the
partnership. Even though industrial partners are exempt for the losses of the partnership in
the absence of stipulation, they are still liable for the liabilities. The partners can use their
own properties to settle the liabilities.

3. Nikki and Jie are partners in buying and selling vehicles. Nikki, by the partner’s
agreement, was authorized to buy vehicles on a cash basis, and never on installment.
One day Nikki bought a vehicle from Abbie on installment. Abbie did not know of
Nikki’s lack of authority. Nikki’s purchase was made on behalf and in the name of the
partnership. Is the partnership bound?
ANSWER:
Based on Article 1818 of the civil code, the partnership may be bound by Nikki's
unauthorized purchase. This article states that any act done by any partner for apparently
carrying on the usual business of the partnership binds the partnership unless the partner
had no authority to act for the partnership and the person with whom they were dealing knew
or had reason to know about it.

In this case, although Nikki did not have the authority to buy vehicles on installment, he was
acting within the usual business of buying and selling vehicles when he made this purchase.
Additionally, Abbie was not aware of Nikki's lack of authority. Therefore, according to Article
1818, the partnership may be legally bound by this transaction.

However, Nikki and Jie need to address this issue internally as it goes against their agreed-
upon terms. They should discuss how such situations should be handled to avoid similar
problems in the future. Clear communication and adherence to their partnership agreement
will help maintain trust and confidence that prevent any potential conflicts within their
business relationship.

BUSINESS LAWS AND REGULATIONS

GROUP MEMBERS :

Aday, Joey
Bolivar, Erika Shaine
Elfa, Rovie Rose
Sur, Angel Lyn
Tabas, Jon Ronier